In April, the Russian market of high-density polyethylene (LDPE) was faced with a serious shortage and large price increases. Since May, the situation on the market to level off by the end of the month there was a significant pullback in prices, according to a price review ICIS-MRC.
The lack of high-density polyethylene in the Russian market began to be felt in the second half of March. In April, the deficit reached a peak, also reached new record values LDPE prices. In May, the polymer demand has dropped, including at the expense of the long May holidays and in the second half of the month, the market recorded a significant decline in prices.
The traditional April’s deficit of LDPE in the Russian market due to the seasonal increase in demand and a planned stop on the prevention of the second-largest producer – KOS. In the current year it has increased the lack of raw materials on the market next stop on the prevention of the modernization of production Tomskneftekhim (limited company in April sales of LDPE in the domestic market to generate sufficient reserves in the period of inactivity).
By mid-April the price of LDPE in the market beat the historical record in 2015, with the price spread was very large. Transactions were concluded on the supply of LDPE in the range of 114 000-125 000 rubles. per ton, including VAT, CPT Moscow. Transactions on the supply of polyethylene (PE) for the production of shrink films reached the level of 127 thousand. Rub. per ton, including VAT, CPT Moscow.
In the second half of April, the boom in the sleep market. Partly this was due to a record level of prices. It is also a major contribution to reducing demand have limitations on trucking in most regions, which led to a significant increase in logistics cost. As a consequence of the processors has suspended its purchases of LDPE prior to the opening of roads.
By mid-May, buying activity in the market has increased CVP, were lifted all restrictions on road transport and processors back to the polymer procurement. PE Offer on the market in the second half of May was still limited by several manufacturers (Tomskneftekhim and Kazanorgsintez), but this factor was not able to prevent the rollback of prices.
By the end of May, LDPE prices have fallen to a level of 108 000-115 500 rubles. per ton, including VAT, CPT Moscow. PE for the production of shrink films fell to 112 000-116 500 rubles. per ton, including VAT, CPT Moscow.
At the same time, the current lull in the market can not last long. In early June on preventive maintenance stops of the capacity of LDPE Ufaorgsintez. In the second half of June will embark on monthly prevention Tomskneftekhim and “Gazprom Neftekhim Salavat”.