Seasonal increase in demand back in June led to an price rise for Russian pipe HDPE of Rb2,000-3,000/tonne. 

This trend continued in July. In general, HDPE prices are expected to rise in the next few months because of a further increase rise in feedstock prices and tight supply. 

 

Producers of PE pipes in their turn said they could hardly to adapt to an ongoing rise in feedstock price. Price offers for July delivery of Russian natural PE100 reached Rb82,000/tonne, including VAT and delivery. Price offers for Russian black PE100 reached Rb83,000/tonne, including VAT and delivery. Asian black PE100 price was heard on average at Rb85,000/tonne FCA, including VAT. 

 

Supply of pipe PE has tightened in the Russian market in July significantly on the back of technical problems on Kazanorgsintez and reduction in production at Nizhnekamskneftekhim. Situation is expected to only get worse in the next few months. 

 

A key supplier of natural PE100 in the Russian market - Gazprom neftekhim Salavat will shut its HDPE capacities for a month long turnaround. Kazanorgsintez plans to shut its black PE 100 capacities on a month long maintenances from 18, September. 

 

This series of scheduled maintenance has the primary threat to the Russian producers of PE pipes, as there is no much alternatives available in the foreign markets. On the other hand, many producers complained that they did not manage to respond to higher feedstock prices so quickly. At the moment, the difference in the cost of feedstock and the finished tube often does not cover the costs of production, not to mention profits.

 

Taking into account reduced investment in the construction sector rising cost of polyethylene pipe has negative impact on demand.