Uz-Kor’s Scheduled Turnaround of PP and HDPE Plants Curtails Supplies, Prices to Shoot Up

Uzbekistan’s Uz-Kor Gas Chemical declared a temporary shutdown of its High Density Polyethene (HDPE) and Polypropylene (PP) facilities on September 6. The shutdown planned for maintenance purposes will stretch for three weeks. The facilities exhibit the production capacities of 386 KTPA and 80 KTPA for HDPE and PP, respectively.

Uz-Kor is a USD 4 billion valued collaborative venture between National Holding Company Uzbekneftegaz and the consortium of Korean companies - Kogaz, Lotte Group and STX Energy, dedicated to the manufacturing and supply of HDPE and PP.

Polypropylene is a thermoplastic polymer that has wide applications in the packaging, construction, electronics and automotive sectors. HDPE is also a form of thermoplastic polymer (composed of ethylene monomeric units) produced from petroleum through the cracking process. HDPE is typically translucent, UV-resistant, and easily processable that warrants its extensive applications in making plastic bottles, toys, chemical containers, pipes. Its end-user industries constitute packaging, electronics, transportation, construction, machinery, and agriculture. The global HDPE market size in 2020 stood at 45 million tonnes. Despite a hit to its demand in the COVID19 period, its market is expected to grow at a healthy CAGR of over 5% by 2026. 

As per ChemAnalyst, a three-week plant shutdown by UZ-Kor can result in a major supply crunch of HDPE and Polypropylene in the petrochemical sector. One of the direct effects will be mounting pressure of end-user sectors on HDPE imports, while a decline in the Polypropylene exports may also take place to fulfil the local demand. The tight supplies may also lead to a surge in HDPE and Polypropylene prices for a few weeks in the country.