MOSCOW (MRC) -- Prices of of low density polyethylene (LDPE) in the Russian market increased by Rb1,000-3,000/tonne in January, compared to the December level. The price increase was expected, and to a greater extent resulted from to the rouble devaluation. This factor in the future can lead to a further price increases, according to ICIS-MRC Price Report.

 

Beginning of the year in the Russian market LDPE was traditionally quiet. Buying activity in the market was low, a lot of converters in December built up additional inventories of feedstock and plan to return to the procurement of polyethylene only in February. Some companies because of finance problems had to temporarily refrain from the purchasing. In general, at the end of the last week PE prices in the market increased by Rb3,000/tonne, from the December level. 

 

Negotiations on January LDPE contracts began in mid-December, and last week was finished. In most cases, converters have reported a rise in prices from Rb1,000/tonne to Rb3,000/tonne, compared with the December level.

 

Spot prices increased proportionally to the price rise in the contract market. Buying activity last week was weak. Some market participants have reported a temporary problems with shipments from some producers. But in general, the supply of polyethylene in the market was more than sufficient. Price range in the spot market was quite big. Price offers for 158 LDPE were heard in the range of Rb77,500-81,000/tonne CPT Moscow, including VAT. 

 

The ongoing weakening of the rouble against the dollar continues to contribute to the further price increases of LDPE prices in the domestic market because falling prices of polyethylene in foreign markets is less dynamic than the fall of the rouble. At the same time, given the current oil prices, the bottom for LDPE prices has not been reached, and as a result, companies in foreign markets limit their current purchases.