Indon's Peni plans to restart at least one PE line in April

18 March 2005 05:22  [Source: ICIS news]

SINGAPORE (CNI)--Indonesia’s Petrokimia Nusantara Interindo (Peni) plans to restart at least one production line at its 450,000 tonne/year linear low-density PE (lldPE)/high-density PE (hdPE) swing plant at Merak, West Java by early-April after securing a second shipment of cheap ethylene feedstock, CNI was told on Friday.  

 

The non-integrated polyethylene (PE) producer restarted its 125,000 tonne/year No 1 line in February after securing 3,000 tonne of ethylene from a Southeast Asian producer at a low price, an industry source said.

 

The No 1 line was in operation for only 10 days while the company’s 125,000 tonne/year No 2 line remained shut due to the limited feedstock supply. Peni’s 200,000 tonne/year No 3 line has been shut since June 2004.

 

Asian ethylene price rose to $1,300/tonne FOB Southeast Asia in September from $1,070/tonne FOB Southeast Asia in the previous month, forcing Peni to shut its No 1 and No 2 lines in October 2004 to avoid losses.  

 

The source declined to say how long the plant will be in operation in April.

 

Another source told CNI earlier that the negative price spread between ethylene and PE in October was pegged at $70/tonne.

 

He added that although margins climbed up to $30/tonne in February, a minimum spread of $100/tonne is necessary for PE producers to break even.

 

The price of ethylene is currently pegged at $1,150/tonne CFR Southeast Asia, while PE price is $1,120-1,130/tonne CFR Southeast Asia.

By: Caroline Sin
+65 6780 4359

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