Supply of polypropylene (PP) grew significantly in the Russian PP market in October, whereas prices dropped this month. Many market participants expect the downward price trend to continue in November, according to ICIS-MRC Price report.

 

July and August were quite difficult months for Russian PP consumers. A series of scheduled outages of the key producers led to a record growth in prices and a major shortage. The scheduled turnarounds were over in September and PP supply increased, but deferred demand still created a sense of tight supply in the market. The market situation  improved considerably in October. Stavrolen resumed its PP production, and excessive supply of PP started to put serious pressure on prices in the second half of the month.

 

Buying activity was low in the Russian market in the last week of October, many market participants were slow to do deals for November PP shipments. Companies were trying to get lower offer prices from suppliers, hoping for increased competition in the market among producers. Issues with working capital of converters and refinancing also affected demand.

 

Demand is the weakest in November, and this factor might also push prices down. But a significant weakening of the rouble against the dollar in the last two weeks made PP exports more attractive for Russian producers. Some manufacturers expressed the desire to increase their export sales, thus intending to balance PP supply in the domestic market. At the same time, to export material is not that easy, as prices continued to go down in foreign markets, following lower oil prices.

 

This week"s offer prices of propylene homopolymer (homopolymer PP) of raffia grade in the spot market remained in the range of Rb71,500-73,000/tonne FCA, including VAT, in the south, whereas in the Povolozhsky region deals were done at an average of Rb72,000/tonne FCA Ufa, including VAT. Offer prices of raffia remained in the range of Rb73,000-74,000/tonne CPT Moscow, including VAT, in the central part of Russia.

 

Demand also subsided greatly in the injection moulding homopolymer PP market. Offer prices in the central part of  Russia have dropped to Rb74,000-75,500/tonne, including VAT and delivery to the central region, by late October.

 

The copolymers of propylene market was no exception. Here, many market participants also reported price cuts at the end of the month. This week"s offer prices were in the range of Rb80,000-82,000/tonne FCA, including VAT.