The Union of Plastics Processors (SPP) asks the Russian government to develop measures to curb the rise in polymer prices, similar to those that apply to prices for fuel and other socially important goods, Interfax reports.

 

The union invites the government to create a working group to develop “a regulatory and regulatory framework that will reduce the volatility of plastics prices and eliminate dependence on foreign market conditions, similar to the laws regulating the selling prices of fuels and socially important goods.” It is assumed that it should include representatives of the government, the Ministry of Energy, the Ministry of Industry and Trade, petrochemical companies and SPP.

 

Drawing attention to the scale of the problem, SPP cites data from the Federal Tax Service, according to which 13 thousand small and medium-sized enterprises with a total number of about 500 thousand employees and an annual revenue of about 1.3 trillion rubles are engaged in polymer processing in the Russian Federation.

 

The letter also says that the total consumption of plastics in Russia in 2020 amounted to about 6 million tons, of which about 95% falls on the so-called basic (large-tonnage) plastics: polyolefins (polyethylene, polypropylene), polyvinyl chloride (PVC), polystyrene and polyethylene terephthalate (PET) produced at the enterprises of five holdings: SIBUR, TAIF, Rosneft, Lukoil and Gazprom.

 

A separate appeal to the Ministry of Industry and Trade was sent by the largest manufacturer of composite materials NPP Polyplastic LLC. The company also proposes to create a working group with the participation of departments, petrochemical companies and enterprises that process polypropylene into composite raw materials, to search for measures to stabilize prices for this product. According to NPP Polyplastic, prices for polypropylene in February in relation to the middle of last year for many nomenclature items increased by more than 50%.

 

Polyplastic is almost 100% dependent on Russian raw materials, the total demand for polypropylene for the production of polymer compounds for engineering and technical purposes is more than 50 thousand tons per year, it is supplied by SIBUR, TAIF and Lukoil, “the letter says.

 

The Ministry of Energy deals with the production of primary polymers, including polypropylene, and the Federal Antimonopoly Service deals with the issues of price regulation. “If a working group is created to develop measures to stabilize prices for primary polymers, including polypropylene, by the above departments, the Department of the Chemical-Technological Complex and Bioengineering Technologies of the Ministry of Industry and Trade announces its readiness to join the working group,” the ministry said.

 

The press service of the FAS reported earlier that they are carefully studying the situation with changes in prices in the plastics market. “The service has already sent inquiries to the manufacturers of the relevant products, and if it detects signs of violation of the antimonopoly legislation, the service will take measures of antimonopoly response,” the service representative said. This week, the FAS did not respond to Interfax’s request. The press service of the Ministry of Energy of the Russian Federation told Interfax that they are ready to consider appeals about the situation with prices “upon receipt of information from the FAS Russia in accordance with the established procedure.”

 

In SIBUR, the growth of quotations for polymers is associated, among other things, with the recovery in demand from refiners in the third quarter of 2020 after the peak of the pandemic at the beginning of the same year. In addition, prices for the main raw materials – liquefied petroleum gases (LPG) and naphtha – increased, and there was a shortage of products on the world market due to the stoppages of a number of processors in the EU and the USA.

 

At the same time, Russian prices in dollar terms demonstrate “significantly lower growth compared to the world,” the company emphasizes. Selling polymer products, SIBUR is guided by quotations “which reflect the balance of supply and demand on the polymer market, not only in Russia, but also in the world.” At the same time, the company notes that they provide customers with the opportunity to factoring and defer payments, and also support the obligations of customers in tenders with fixed prices.

Kazanorgsintez draws attention to the fact that the share of Russian manufacturers in the world market is relatively small in order to actively influence the situation with prices. “The Russian polymer market is a part of the global market and obeys global trends. Prices for polymers are formed under the influence of a number of macroeconomic factors. Kazanorgsintez also assures that it is fulfilling its obligations under previously concluded long-term contracts in full.

 

Both SIBUR and Kazanorgsintez emphasize that most of their products are sent to the domestic market. “Today, having a significant shortage of raw materials, we purposefully minimized export shipments in an attempt to saturate the domestic market with polymers. These volumes were sold through an electronic trading platform, where prices are formed on the basis of supply and demand in the polymer market,” said a representative of Kazanorgsintez.