MOSCOW (MRC) -- A shortage in the Russian low density polyethylene (LDPE) market has been increasing with each passing day. LDPE prices broke another historical record, according to ICIS-MRC Price report.
The deficit started to be felft in the Russian LDPE market already in the second half of March. The first days of April brought a further deterioration in the market situation, and virtually the complete absence of polyethylene (PE) in the spot market continued to boost prices. Another price record was registered this week.
The deterioration in the LDPE market in April was caused by the suspension of sales by virtually all Russian producers. Thus, the plant's customers said Ufaorgsintez suspended all its sales from 1 April, the resumption of sales is expected any day now. Angarsk Polymer Plant already suspended its sales of PE becuase of the last week's shutdown.
Kazanorgsintez plans to shut down some of its production for a four-week turnaround from 15 Apri, leading to scarce April shipments of 158 and 153 grade LDPE to the spot market. And, according to unofficial information, PE sales will be conducted through electronic trades.
Sales of Gazprom neftekhim Salavat's LDPE were also almost completely absent in the spot market, which was partly due to the introduction of restrictions on freight transportation movement on federal roads. Therefore, PE was shipped by rail to regional warehouses.
Polymir, the Belarusian producer, suspended its LDPE shipments to the Russian market this week because of an unscheduled outage. The plant's customers said LDPE shipments to Russia are planned to be resumed only next week.
The price situation was ambiguous in the spot LDPE market. PE deals were mostly one-off, and the price spread was wide enough. LDPE offer prices exceeded Rb92,000/tonne FCA, including VAT, but in most cases converters refused to purchase PE at higher prices than Rb90,000/tonne.