MOSCOW (MRC) -- Higher prices of low density polyethylene (LDPE) in foreign markets and tight supply in the domestic market led to a price rise in Ukraine. The situation in the LDPE market might deteriorate in the near future, according to ICIS-MRC Price report.
In March, many Ukrainian companies faced tight supply of LDPE from the major suppliers - Russian and Belarusian producers. The absence of a seasonal surge in demand and large carryover stocks of LDPE from February purchasing allowed to avoid a shortage in the market this month, but prices still increased at the end of March. Further cuts in export quoats are expected by major suppliers in April, which will trigger a further rise in prices.
In early March, deals for Russian and Belarusian LDPE were concluded in the range of UAH38,500-40,000/tonne CPT Kiev, including VAT, in the Ukrainian market. Prices of some suppliers have grown to UAH44 000/tonne CPT Kiev, including VAT, by the end of the month. Both tight supply and a major price rise in Belarus led to higher prices.
Some market participants expressed concerns about April because Russian producers do not plan to ship LDPE to Ukraine due to the upcoming shutdowns for maintenance. The Belarusian producer is also more focused on the Russian market and is unlikely to fully compensate for the lack of supplies from Russia.
European LDPE can be considered alternatively. However, its prices are significantly higher, and European producers are unlikely to significantly increase shipments to Ukraine. At the same time, LDPE prices are expected to rise in Europe by EUR50-80/tonne in April.
MRC