The Russian polyethylene market demonstrates record growth rates

According to the data of Market Report, the overall estimated polyethylene consumption in Russia increased by 29% during the first half of 2007, comparing with the same period last year. The main result of the first six months is that in spite of the positive dynamics of the domestic production (+14%), the import of HDPE and LDPE is growing even faster (+ 59%).

During the six months of the year, the overall supply of HDPE increased by 40%, whereas the LDPE market is less dynamic (+ 15%). The LLDPE market has slowed down its growth rates (+37%); however, according to the results of the last seven years, it remains the fastest growing market among all other polymers in Russia (thus, during 2000-2006, average annual consumption growth rates constituted 74%). Today, four big Russian LLDPE processors already have capacities allowing processing of 75 kt per year. One of the leaders of the domestic LLDPE processing, Regent-Stretch (Moscow), plans to launch one more 20 kty cast-line at the end of 2007.

The decrease in the domestic supply of Russian HDPE is accompanied by the growing HDPE import from South Korea, Uzbekistan, Ukraine and Belgium. According to the results of the first six months, the HDPE import increased by 65%! Today, more than one third of imported HDPE belongs to pipe brands; at the same time, one fifth of that volume belongs to Korea Petrochemical of South Korea. The supply of pipe PE100 of Basell Polyolefins increased almost three times; that of Daelim increased almost five times (the leading brand is TR-480BL). Insufficient output of Russian injection molding and EBM HDPE brands during the first half of the year was compensated by the increasing supply from Uzbekistan. During April-May, some processors even tried to switch fully to EBM and injection molding HDPE brands of Shurtaqnskiy Gas-Chemical Plant.

In view of the increasing seasonal demand for LDPE, domestic producers reduce their export (minus 28%). Thus, export shipments to China from Tomsk and Angarsk decreased by almost 67% during the first half of the year. At the same time, there is still a lack of Russian LDPE in the market, which is confirmed by the record LDPE import growth rates (+ 60%). At the same time, there is an increasing supply of expensive foreign brands: thus, Borealis’ sales during the six months increased by 59%, comparing with the same period last year; Dow’s sales (mainly due to Dowlex 2388 brand in the sector of big-diameter pipe coating extrusion) increased six times.