Despite the anticipations of many market participants, prices for high density polyethylene (HDPE) did not increase in October in the Russian market. Scheduled maintenance works at Kazanorgsintez had no impact on the market, and sluggish demand resulted in a decline in prices in some sectors of consumption, according to ICIS-MRC Price Report.

 

Despite nearly two weeks shutdown of the Russia’s largest HDPE producer Kazanorgsintez in October, prices did not increase. On the contrary, sluggish demand has led to the weakening of prices for film and pipe PE in the end of the month. Supply of blow moulding and injection moulding HDPE continued to be tight, but this factor did not have a serious impact on the market.

 

Demand for pipe HDPE was quite strong in September. Scheduled works of Kazanorgsintez and Nizhnekamskneftekhim made many converters to build up their stock inventories. Market activity has weakened in the pipe PE in October, as many companies did not buy PE, having large carryovers from September.

 

Supply of PE was more than enough this month, in particular natural PE100. As a result, prices for natural PE100 dropped to Rb80,000-81,500/tonne FCA, including VAT in the late October. Prices for black PE100 remained at the level of September.

 

There were practically no offers for film HDPE from Kazanorgsintez because of maintenance works, but this factor was offset by a large supplies from Nizhnekamskneftekhim and a seasonal decrease in demand. Many market participants reported a decline in prices in the late October, deals for Russian PE were heard in the range of Rb81,500-82,000/tonne FCA Nizhnekamsk, including VAT.

 

Prices for Middle Eastern film HDPE were on average at Rb83,000-85,000/tonne FCA, including VAT. Supply of Russian blow moulding HDPE was not resumed in the market this month. Kazanorgsintez because of the technical problems postponed the time of blow moulding PE shipments to the domestic market to the beginning of November, before that the first shipments expected to be done in the second decade of October.

 

Nevertheless, the low demand in this sector offset the absence of Russian HDPE in the market. Price offers for Middle Eastern PE were in the range of Rb84,000-87,000/tonne FCA St Petersburg, including VAT and Rb83,000-84,000/tonne FCA Astrakhan, including VAT.

 

The situation in the market of injection moulding HDPE was unusual. Supply of Russian injection moulding HDPE was tight in October, materials on the market for months was negligible, and was reduced to the PE with melt flow index (MFI) = 2 by production of Gazprom neftekhim Salavat. Imported material was sold in the first days of the month.

 

Situation is expected to be improved in the second half of November, when two Russian producers resume production of injection moulding HDPE -  Gazprom neftekhim Salavat and Kazanorgsintez.