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After the country’s only petrochemical producer Petkim appealed to the Ministry of Trade, the authorities decided to launch an antidumping investigation into year-to-date LDPE import from Saudi Arabia. Upon its completion, which is unlikely any time soon, an antidumping duty may be imposed.
‘This is a political move, which is meant to be an answer to the Saudi Arabian boycott of the Turkish imports late last week but a very weak one,’ a Turkish trader has told PMW. The authorities’ determination will depend on the reaction of the Saudi Arabian government.
2020 has been a tough year for Russian PVC pipes market players. Feedstock appreciation, spring lockdown measures and stronger competition from producers of PP pipes, apart from that between manufacturers of PVC pipes themselves, have been the main reasons for this.
Spring quarantine suspended construction works. As trading companies restocked ahead of the construction season and end-users slashed purchases, converters’ production activity was minimal then.
The gradual resumption of building works since June improved demand for the commodity. Some producers reached record highs in their shipments in July and managed to equalize their Q3 2020 output to the Q3 2019 one or even outdo it by 2%. However, the initial plan to ramp up production by 10—20% fell through mainly because of the feedstock market situation. It was an uptick in prices rather than the material undersupply there that affected the value of the finished product.
Competition between producers of PVC sewer pipes with the diameter of 110—120 mm and those of PP ones has reportedly stiffened due to several factors. On the one hand, PVC resin has appreciated by 15—17% and made the final product costlier. Manufacturers of PVC pipes have raised their prices several times and plan to do it again by 5—15% depending on the grade.
Apart from that, some producers increased the content of chalk and secondary raw materials in PP pipes to make them cheaper, disregarding their worse quality. However, in wholesale distribution, these goods are more preferable than PVC ones. PP converters can sell a pipe at cost and thereby reduce the gap between PP and PVC pipes selling prices. It is sales of fittings rather than pipes that brings them higher profits. Thus, a further appreciation of PVC resin may make PVC pipes uncompetitive in this segment.
Another segment where PVC pipes are used is well casing. Sales have grown there, according to some players. However, there still can appear a fierce competition with PE pipes if the value of PVC resin exceeds that of PE.
Pressure pipes remain the most beneficial market segment for converters, as they expect an upturn in consumption there. Thus, Chemkor has started making pressure pipes with the diameter of 90 and 110 mm this year.
Converters are avoiding optimistic forecasts for the industry as demand is weakening seasonally and some producers are selling their stocks now while keeping their equipment idle. Only the most popular goods are currently in production.
The market for PVC pipes is closely linked to the construction industry. Hence, only government programmes, especially those aimed at expanding private housing construction, can ramp up consumption there.
Synthomer, a London-headquartered speciality chemical company and one of the world’s leading suppliers of waterborne polymers, announced its intentions to begin consultations with employees in Oulu, Finland, concerning the future of their site and with employee representative bodies in Marl, Germany, to consider future capacity requirements for the paper and carpet markets. In the H1 2020 statement released in August, the company said it expected to reveal the outcome of these consultations in the next few months. Synthomer initially announced strategic review of its styrene-butadiene latex business in Europe in Q4 2019 in view of lower plant utilisation rates caused by slower business activity and persistently low demand for coated graphic paper.
Meanwhile, Synthomer, encouraged by increased demand for nitrile gloves as a result of the COVID-19 pandemic, launched a feasibility study into nitrile butadiene latex capacity expansion at its existing facilities in Europe at about the report time. The company stated that ‘[in H1 2020] our nitrile latex business continued to benefit from the additional 90 kilotonnes of capacity introduced in Q4 2018 at our Pasir Gudang site [in Malaysia]. In addition, we saw further strengthening of demand due to COVID-19 leading to higher nitrile latex volumes and full utilisation of our assets.’ The company also plans to continue the expansion of the Pasir Gudang site and add 60,000 tpy to its nitrile butadiene latex capacity in H2 2021.
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