After a long period of price decline, low-density polyethylene (HDPE) in Russia began to rise in price at the end of June. In the second half of July, the dynamics of price growth increased against the background of a serious reduction in supply, according to the ICIS-MRC Price Review.

The long period of surplus and decline in HDPE prices in Russia ended in the second half of June. The weakening of the ruble and high prices of polyethylene in foreign markets forced some producers in July to increase export volumes, and imports also decreased. And these factors, in the context of seasonal growth in demand, led to a lack of HDPE supply in the market, followed by a dynamic rise in prices. At the same time, some of the sellers have actually suspended all their polyethylene sales in the last two weeks.

The rise in world prices of HDPE and the devaluation of the ruble against the dollar already in June began to put pressure on imports, in the next month external supplies decreased even more. At the same time, in some segments, even in conditions of high prices, there are serious restrictions on sales from external suppliers, in particular, black pipe PE100.

Serious price imbalance in the Russian market and in the markets in Asia, Turkey and Europe forced some domestic producers to increase their export volumes. Export sales of extrusion grades of polyethylene increased.

Since June, demand for low-density polyethylene began to gradually recover on the Russian market after falling in April-May. And the growth in exports and the reduction in imports amid growing demand led to a serious reduction in supply. Some sellers have begun to limit their sales since mid-July; in isolated cases, it was reported that sales were completely suspended due to lack of resources.

The situation with the balance of demand and supply of HDPE on the market was significantly worsened by the unplanned shutdown of part of Stavrolen’s capacities at the end of last week. The greatest lack of supply remains in the black PE100 segment. More or less balanced market in the injection molded HDPE segment.

This week, negotiations began on August supplies of low-density polyethylene. Many sellers have announced serious price increases. Deals for the supply of HDPE film are being discussed from the level of 73,000 rubles / ton, including VAT, CPT Moscow. In some cases, offers for the supply of blown polyethylene are announced by sellers at the level of 79,500 rubles / ton, including VAT, CPT Moscow. At the same time, not all sellers began to discuss the August deliveries.

It should also be understood that Kazanorgsintez and Stavrolen intend to shut down their capacities in September-October for scheduled preventive maintenance.