Mikhail Katsevman: “Marketplace trading could smooth volatility of prices for base polymers”

Chairman of the Russian Association of Plastics Processors (RAPP) and Head of R&D of R&P POLYPLASTIC commented on the position of the Central Bank on sale of 10 – 15% of large tonnage polymers through Commodity Exchanges. Mr. Katsevman also provided a list of conditions aimed at cutting costs of primary raw materials.

Since this Spring the Russian Association of Plastics Processors has been strongly encouraging the Ministry of Industry and Trade, Ministry of Energy and Federal Antimonopoly Service to allow marketplace trading of large tonnage polymers. The Russian Central Bank has already expressed its positive decision on the matter.

“It is important that the Ministry of Industry and Trade, Ministry of Energy and Federal Antimonopoly Service issue a binging directive for large producers to carry out sales through Commodity Exchanges and define project timelines,” says Mikhail Katsevman.

Chairman of RAPP noted: even though stock trading would not be able to stabilize or reduce polymer prices they will definitely contribute to achieving transparency on the market. Access of plastics processors to raw materials on standard terms shall neutralize negative and discriminatory developments in the industry. It will be possible to estimate the costs of materials in the conditions of increased demand on the national market.   

It is crucial to have a normative framework and a positive response from plastics processors to successfully implement the mechanism. Marketplace trading requires a certain amount of discipline including registration and following regulatory procedures.

Currently prices for polymer materials in Russia are under strong influence of the global situation   creating troubles for national plastics processors. “Fluctuation of prices and their unintentional growth in spring endangered the operational stability of the whole industry. However, if large players like R&P POLYPLASTIC have the necessary resources to overcome difficult times without substantial losses smaller-sized players are at the verge of bankruptcy. This situation gave momentum to the RAPP efforts to decrease pricing volatility of base polymers”, Mikhail Katsevman comments.