Polyethylene stretches the price tag – Kommersant

Large-tonnage polymers on the domestic market began to actively rise in price in March-April, responding to growing demand against the backdrop of the start of the construction season, as well as the weakening of the ruble. Producers and experts call the increase in prices a “logical correction” after a long fall last year. Polymer processors expect that the stock exchange will be able to contain the rise in price.

Prices for the main brands of base polymers (polyethylene of various grades and polypropylene) in the Russian market accelerated growth at the beginning of the second quarter, industry participants told Kommersant. Thus, by mid-April, the cost of some types of base plastics increased by 10-15% compared to the beginning of the year.

This information is confirmed by Plastinfo statistics. They note that in March the demand for base polymers perked up against the background of the closing of quarterly purchases and in anticipation of transport restrictions during the spring floods. “The reason was also the decision of manufacturers to significantly increase prices from April 1,” Plastinfo says.

Prices for large-tonnage plastics began to gradually recover since the beginning of the year after stagnation in the fourth quarter, and in March, growth accelerated. It turned out to be the most significant in the high-density polyethylene segment (growth in March amounted to an average of 4.5% compared to February).

HDPE pipe grades went up the most — by 10 rubles. per 1 kg (up to about 130 thousand rubles per ton) against the backdrop of a shortage. According to Khimkurier, since the beginning of the year, the cost of polyethylene for pipes has increased by an average of 8%, to 125-144 thousand rubles. In April, experts expect a further increase in prices by 5-10 rubles. per 1 kg.

The cost of linear low-density polyethylene also grew (by an average of 2.3%). Despite sufficient supply, polypropylene also rose in price – by an average of 3.8% against the backdrop of increased purchasing activity. An exception among the base polymers was low-density polyethylene, which fell in price amid weak demand.

In general, according to Plastinfo, in March, the weighted average price index of seven basic polymers increased by 2.3%, to almost 130 thousand rubles. At the same time, on an annualized basis, plastic prices show a significant drop, since last year they rose sharply in April (by more than a third on average).

The largest producer of base polymers, SIBUR, told Kommersant that the company, despite the volatility of the external environment, the dynamics of the ruble exchange rate and raw material prices, has been reducing prices for Russian customers since June 2022 (by 21-31% at the end of the year). In January, the company says, prices also remained without movement, despite changes in the commodity and currency markets. SIBUR explained that in anticipation of the traditional seasonal increase in prices for finished products, the company will “step by step reduce the cost delta accumulated due to the company’s voluntary refusal to adjust for the industrial inflation factor in 2022 and early 2023.”

Dmitry Akishin, Managing Director of Implement, notes that there were no significant fluctuations in prices for the main polymers in foreign markets in 2023, however, the depreciation of the ruble by 15% since the beginning of the year predetermined an increase in export netback in rubles, so some price growth in the domestic market looks logical .

Pyotr Bazunov, the head of the Union of Plastics Processors, links last year’s decline in prices for polymers in the Russian Federation with the strengthening of the ruble, as “otherwise, the domestic market would have been flooded with imported plastics.” However, he is sure that in any case a market indicator is needed in the polymer market. For its formation, there must be two prices for the same product: contract and exchange. The Union has long advocated for the introduction of polyolefins on the stock exchange, but the idea is still being discussed in the government.

Dmitry Semyagin from Rupec recalls that the peak of prices in the spring of 2022 was the logical conclusion to their long fall against the backdrop of covid restrictions. The average decline in polymer prices from April 2022 to February 2023 was 34%, so the current momentum is essentially recovery. He also recalls that if until April 2022 the prices of raw materials and final polymer products were usually correlated, then the movement became multidirectional: basic polymers became cheaper, and products made from them, including pipes, non-woven materials, bags and bags made of polymers, rose in price. by 5–12%.

Olga Mordyushenko