MOSCOW (MRC) -- Russian companies have been actively purchasing polyethylene (PE) in Uzbekistan for the last two weeks. Stronger demand was caused by a long outage at Stavrolen, Russia's second largest PE producer, according to ICIS-MRC Price report.
Russian companies started purchasing actively high density polyethylene (HDPE) in Uzbekistan since last Friday, when preliminary dates of the shutdown at Stavrolen became known and the Russian market faced a major rise in HDPE prices. The purchasing also continued this week.
Expectedly, Russian companies have been actively buying blow moulding and injection moulding HDPE. Deals in the Uzbek Republican Commodity Exchange were done in the range of USD1,400-1,405/tonne FCA Kengsoy. There were also reports about purchasing of butene linear low density polyethylene (LLDPE), however, purchasing quantities were significantly lower. Deals for LLDPE were done in the range of USD1,450-1,505/tonne FCA Kengsoy.
Contracts were also concluded by Kazakh companies, but their purchasing quantities were not comparable with the Russian ones. It should be noted that Kazanorgsintez, the key HDPE supplier to Kazakhstan, announced major cuts in export programs last week. As a consequence, Kazakh companies began to seek alternatives to Russian PE.
PE of Shurtan Gas Chemical Complex (Uzbekistan) is well known in the Russian market. Its prices were comparable to those in Asia and the Middle East (excluding delivery). However, the Uzbek material had a significant advantage over other materials because of the absence of import duty (9.1% for HDPE).