Petrotahlil - Demand for some grades of low density polyethylene (LDPE) increased significantly in the Russian market in June, partially because of seasonal factors, with selected prices rising in the second half of the month as supply became scarce, according to ICIS-MRC Price report.
Quarantine restrictions due to the coronavirus pandemic in April-May led to a major reduction in demand for LDPE. The situation changed in June as PE demand began to recover while supply of some grades fell due to upcoming maintenance shutdowns at several plants.
As a result, 108 grade PE had become scarce by end-June, and some sellers’ prices rose by Russian roubles (Rb) 13,000/tonne ($184/tonne).
Demand was affected by converters’ desire to build up additional LDPE inventories before the shutdowns.
Angarsk Polymers Plant shut its production capacities for a 30-day turnaround on 22 June. A similar shutdown for a scheduled maintenance is expected at Gazprom Neftekhim Salavat’s LDPE production capacities from 1 July. Tomskneftekhim will take off-stream its production for a two-week turnaround in the second half of July.
Supply of 108 grade LDPE began to decrease, with some sellers clearing allocations by the second half of June. As supply of PE subsided, prices went up.
Tight supply and stronger demand led to price records last week. Deals for July shipments of Kazanorgsintez’s 108 grade LDPE exceeded Rb72,000/tonne FCA (free carrier) Kzan, including VAT, in the electronic trades.
The situation was different for 158 grade and 153 grades during the month, with no shortage of PE in the market, despite restrictions on shipments from Kazanorgsintez and the upcoming shutdowns at the plants in Salavat and Tomsk. Prices for some sellers rose, but the price increase was not as significant as in the 108 grade LDPE segment.
($1 = Rb70.80)
Source : ICIS