Since the beginning of the year, the Russian market for low-pressure polyethylene (HDPE) has experienced a constant decline in prices, but in July the situation on the market has changed radically. In some segments this month even there was a rise in prices, according to the ICIS-MRC Price Review.

Since the beginning of the year, the excessive supply of HDPE on the Russian market in conditions of low demand has put serious pressure on prices, while the most dynamically cheap polyethylene (PE) from April to June. In July, due to a planned stop for the long-term prophylaxis of Gazprom Neftekhim Salavat and the reorientation of Nizhnekamskneftekhim to the production of linear polyethylene (LDPE), it was possible to stabilize the price situation in the HDPE market. And even more, in the market of pipe PE there was a lack of supply and an increase in the prices of natural PE100.

From the first of July, for almost a month’s prevention, the production of LPG Gazprom neftekhim Salavat stopped, which in recent years is a key supplier of natural pipe PE100. The resumption of production at the Salavat enterprise after the prevention is scheduled for the 5th August. Annual production capacity is 120 thousand tons.

Nizhnekamskneftekhim since the end of June has reoriented to the production of LDL and, according to the clients of the enterprise, intends to produce this polyethylene until September. The annual production capacity of the Nizhnekamsk plant is 210 thousand tons.

The fact that there was no production of HDPE from two manufacturers allowed balancing supply and demand in the Russian market in July in most sectors of consumption. And on the market of pipe PE, on the contrary, since the beginning of the month there was a lack of supply of natural PE100, and by the middle of the month the prices for individual positions had grown significantly and reached the level of 89 000-92 500 rubles. Per ton, including VAT, FCA. At the same time, there was no serious surge in demand for black PE100 for a month.

Shortage of natural PE100 led to increased demand for universal HDPE brand 273-83. By the end of the month some trading companies began to limit sales of this polyethylene due to the limited reserves and problems with operating time at the facilities of Kazanorgsintez. In the last week of July, supply proposals for this PE reached the level of 87 thousand rubles. Per ton, including VAT, FCA Kazan.

In the film HDPE market, in the second half of July, there was also a slight increase in prices. The demand for this material has increased significantly in the onlinecontract electronic trading platform. Some companies have seriously increased the volume of purchases of this IPA in foreign markets in connection with the forthcoming stops in September for the prevention of two major producers: Stavrolen and Kazanorgsintez.

In the market of injection molded HDPE in July, the price situation was stable. Sufficient stockpiles of injection molding PE can meet all market needs even in the absence of the production of this material by local producers.

In August, there is a high probability of further low-pressure polyethylene prices in the Russian market due to the forthcoming stops of two key producers. So, Stavrolen intends from the 1st of September to stop the production of HDPE for long-term prophylaxis and modernization of part of the facilities. Simple production will last about 2 months. Annual production capacity is 300 thousand tons.

The largest Russian producer of HDPE, Kazanorgsintez, traditionally stops its capacity for prevention in the second half of September for several weeks of preventive maintenance. The annual production capacity is 540 thousand tons.