Moscow (MRC) - Temporary problems in the production of high density polyethylene (HDPE) have led to a price rise in the Russian spot market last week, as per ICIS-MRC Price Report.
The Russian market HDPE have been waiting for the resumption of the production at Stavrolen all March. Many market participants thought that the growth in production volumes and increased competition between local producers would lead to price cuts.
However, Stavrolen has not resumed its work yet , and the technical problems at Kazanorgsintez, which that led to a decrease in capacity utilisation and temporarily suspension of HDPE shipments into the domestic market last week, caused a stir in the market. By the end of the week PE prices increased in the spot market.
Kazanorgsintez is the largest producer of HDPE in Russia and given the shutdown of Stavrolen problems at the Kazan company have a major impact on the spot market. Amid low stocks of HDPE at the traders' warehouses and the oncoming restrictions on trucks movement of federal roads, the spot market was quite nervous reacted at the suspension of HDPE shipments from Kazanorgsintez.
The most critical situation was in the market blow moulding HDPE, where Kazanorgsintez is single supplier in the Russian market so far. Spot prices for blow moulding HDPE last week started from Rb86,000/tonne FCA Kazan, including VAT, but by Friday, some companies have raised prices up to Rb92,000/tonne FCA Kazan, including VAT.
Market of film HDPW was more quite because of the availability of the offers from other producers, in particular, from Nizhnekamskneftekhim. Prices fro film HDPE in the late week grew to Rb87,500/tonne FCA, including VAT.
Prices for injection moulding HDPE was not affected by the situation with Kazanorgsintez. Traders have sufficient stocks, besides Gazprom neftekhim Salavat is expected to resume injection moulding HDPE supply in the second decade of April.
MRC