19 January 2006 10:08 [Source: ICIS news]
LONDON (ICIS news)--Sabic has put a stop on all new low density polyethylene (ldPE) orders for January delivery, a company source said on Thursday.
“We are unable to handle new requests at the moment,” said the source. “We have reached 110% of budget and have had to close our order books.”
Linear low density (lldPE) sales were also strong and the company was also considering a stop to orders for this grade.
Polyethylene (PE) spot prices rose at the end of December as it became clear that prices would not go down in line with ethylene. Naphtha prices increased sharply, ethylene fell by only Euro40/tonne and Asian markets picked up, leading to stronger sentiment in Europe.
Inventories with converters were low and buyers came back to the market in January in an attempt to avoid hikes in February.
Producers have already made it clear that they will target hikes of at least Euro100/tonne for February PE business. Dow said earlier this week it would be seeking plus Euro120/tonne for February and Sabic was expected to announce a formal hike on Monday.
“We expect ldPE prices to cross the Euro1,100/tonne FD NWE line by the end of January,” the Sabic source said.
End December ldPE gross prices were established at Euro1,060-1,080/tonne free delivered (FD) Northwest Europe (NWE), down significantly from October levels of Euro1,290/tonne FD NWE.
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