The shortage of polypropylene (PP) on the world market increased in February, prices reached record levels over the past few years. A similar situation is observed in the Russian market, PP prices have reached record levels, according to the ICIS-MRC Price Review.

In previous years, in January-February, polypropylene on the Russian market was getting cheaper under the pressure of low demand and excess supply. This year the situation has changed dramatically. The high level of prices in foreign markets is putting serious pressure on prices in Russia. The rise in prices for propylene homopolymer (PP-homo) began in January, but in February the dynamics of price growth accelerated. Since the beginning of the year, prices have risen by more than 17%.

The shortage of PP in the world in the second half of February was exacerbated by unplanned shutdowns due to frost of several manufacturers in the United States. PP shortages in Europe pushed prices up 15% in February, while in Turkey last week PP-homo raffia prices exceeded USD1,800 per tonne, CFR.

Such a rapid rise in PP prices in a number of regions of the world since the beginning of the year pushes the largest producers to constantly increase prices in the Russian market. Export prices of Russian producers in a number of areas have been higher than domestic prices for a long time.

The imports of cheap polypropylene from Turkmenistan decreased, and at the latest export auctions, prices rose to USD1,515 per ton, FCA / FOB, while back in early December, export prices averaged USD1,050 per ton, FCA / FOB.

PP supply in the Russian market during February was limited; some converters could not fully cover their polymer needs even in the face of record high prices. In March, the situation with the availability of propylene polymers on the market is unlikely to improve.

By the end of February, spot offers for deliveries of PP-homo raffia from individual sellers exceeded the level of 130 thousand rubles. per ton, including VAT, CPT Moscow, whereas at the beginning of January the cost of this PP did not exceed 104.5 thousand rubles. per ton, including VAT, CPT Moscow.