Ufaorgsintez announced an increase in its contract PP prices from 1 August this week. SIBUR (the company manages assets of Tobolsk-Polymer, Neftekhimia, Tomskneftekhim and Poliom) and Nizhnekamskneftekhim have been discussing an issue of increases in their contract prices. Stronger demand for PP because of seasonal factors and scheduled shutdowns for maintenance are the main cause of higher prices.

 

Most converters began negotiations over August PP shipments this week. Many companies have significantly increased their enquiries for PP this month, anticipating a further deterioration in the availability of material in the market and further price rises. Producers, in their turn, said they were in no positon to fully meet all the current orders.

 

Supply of PP was virtually completely absent in the spot market. And some market participants said PP supply to the spot market by somel producers will be minimized because of the scheduled outages for maintenance. Because of higher prices in foreign markets, imports are unlikely to grow significantly, raffia from Turkmenistan being the only exception (according to preliminary estimates, over 3,000 tonnes of PP will be delivered in August).

 

Most market participants said the situation with PP availability in the market will be difficult until September. Tobolsk-Polymer resumed its production last week after after a scheduled turnaround. But it is worth noting that  Tomskneftekhim is still idle (the start-up is to take place in mid-August), and Ufaorgsintez and Poliom will shut down their production in the midddle of the month.