MOSCOW (ICIS-MRC) - A tighten supply of low density polyethylene (LDPE) in the Russian market and the oncoming stops for scheduled turnaround continue to push the prices up. Next week the prices are expected to rise further, according to a ICIS-MRC Price report.
In mid-March Russian producers announced an increase in contract prices of LDPE in the domestic market under pressure from rising oil prices. This week the spot prices of low-density polyethylene in Russia increased on the back of growth in demand, scheduled stops on turnaround, and traffic difficulties as a result of spring floods.
Kazanorgsintez, Russia's largest producer, plans to stop its capacity of LDPE on a scheduled turnaround for a month on April 14. As a result, the company substantially limited the quotas for the supply of polyethylene to the domestic market in April. Ufaorgsintez plans to stop the capacities on scheduled turnaround in early May. At the same time in March, because of a lack of ethylene, the capacities of high-pressure polyethylene in Ufa are loaded on average by 80%. There are disruptions in the supply of PE to the domestic market.
From the mid-April the traffic of freight transport will be limited, which affects the cost of delivery of polyethylene and can cause disruptions in the supply.
This week all these factors influence the spot market of polyethylene in Russia. The price quotations of 158-LDPE reached Rb59,000-61,500/tonne, including VAT, CPT Moscow. The material for the production of shrinkable film is offerred on average for Rb60,000-63,000/tonne, including VAT, CPT Moscow. The price spread is fairly big in the market. The market is in anticipation of April, the new prices from producers and trafic difficulties.