Contrary to the experience of the past, there was no serious deficit in the Russian high-pressure polyethylene (LDPE) market in April this year. On the contrary, in the first days of May, one of the manufacturers announced a significant reduction in prices, according to the ICIS-MRC Price Review.

In past years, the main reason for the spring growth in LDPE prices on the Russian market was the seasonal increase in demand for film products and a planned stop for the long-term prevention of the second largest producer, Kazanorgsintez, which is traditionally in mid-April and early May. In 2016, the effect of lack of LDPE on the market forced the simple Angarsk PP due to a breakdown in the production of ethylene. The current year has become atypical over the past few years, and as a result, there was no tangible price increase in April, and in the first days of May, on the contrary, prices went down.

As individual market participants reported, there was no seasonal surge in film production as a result of bad weather conditions, partly due to the growth in imports of finished goods (serious strengthening of the ruble against the dollar made imports more affordable for consumers). Also from the beginning of the year there has been a decline in demand in some sectors of the economy, in particular, in the construction sector.

Some processors, on the contrary, in March (on the threshold of imposing restrictions on freight road haulage and planned shutdown of capacities in Kazan) made additional stocks of polyethylene (PE), thereby minimizing their risks in April.

Partially low demand for LDPE during the spring period is due to the lower price of linear polyethylene (LLDPE). The difference in the price of LDPE and some types of LDL reaches 10 thousand rubles. Per ton and above, and, as a consequence, processors have increased the share of linear polyethylene in their procurement portfolio.

A serious increase in LDP prices on the Russian market in April did not happen. Moreover, in fact during the whole month prices were relatively stable, only Kazan LDPE grew due to the limited supply. And in the second half of April, the market began a small decline in prices of 108th LDPE, and by the end of the month offers for this type of PE from trading companies reached the level of 94 500-95 500 rubles. Per ton, including VAT, FCA.

And already in the first days of May, Tomskneftekhim announced a reduction in the price of LDPE by 7 thousand rubles. Per ton in comparison with the April level. Other manufacturers have not yet agreed on their prices for the current month.