LME Plastics: March LLDPE down $10/tonne

01 February 2007 13:53  [Source: ICIS news]

LONDON (ICIS news)--March LLDPE futures prices dropped $10/tonne on the London Metal Exchange on Thursday as oil prices eased.

The new front month contract reference price was $10 higher than the February linear low density polyethylene (LLDPE) settlement price of $1,110/tonne.

The new LME polypropylene (PP) reference price – the offer price for the March PP contract – was unchanged from the previous day’s official March PP price and the February PP settlement price at $1,160/tonne.

March LLDPE had closed down $5 on Wednesday at $1,110/tonne. March PP had closed up $5 at $1,150/tone.

Crude oil and naphtha prices were down slightly on Thursday following Wednesday’s gains.

The February LME plastics futures contracts settled on Wednesday with February LLDPE down $45 or 3.9% compared with the start of January at $1,100/tonne and February PP down $15 or 1.3% at $1,160/tonne.

A total of 290 lots of LDPE and 232 lots of PP traded on Wednesday, brokers said. Each lot is 24.75 tonnes.

Exchange open interest at the 17:00 GMT close on Wednesday was 498 lots of LLDPE and 476 lots of PP.

Following the February settlements 187 lots of LLDPE were scheduled to go to delivery and 26 lots of PP.

In the cash markets low density (LDPE) prices settled at an increase of €20/tonne ($26/tonne), at €1,160-1,170/tonne FD (free delivered) NWE (Northwest Europe) on a gross basis, for January on Wednesday, ICIS news reported.

Producers had initially proposed hikes of €50-60/tonne for January polyethylene (PE) but lower Q1 ethylene and the lower oil price impacted on sentiment earlier in the month, and discussion finally settled at plus €20/tonne.

Also on Wednesday, negotiations for January polymer (PGP) and chemical (CGP) grade propylene in the US were at a standstill with some contracts not yet settled, buyers and sellers said.

Buyers and sellers involved in the negotiations said most of the market, but not all, had reached split settlements at plus 2.25 cents/lb and plus 2.5 cents/lb for January.

Should the market settle at these levels, it would take PGP prices to 42.75-43.00 ($942-948/tonne) cents/lb and CGP prices to 41.25-41.50 cents/lb, according to ICIS pricing.

Date:		Contract:
01 Feb-07		LLDPE				PP
LME Reference Price		1110				1160
Forward Prices:		Bid		Offer		Bid		Offer
March -07		1090		1100		1140		1160
April  -07		1105		1125		1140		1160
May -07		1115		1135		1140		1160

The LME official or reference prices are the offer prices for the first forward delivery month - in this case March 2007. Bid/offer prices are given in the table above for three forward months.

Prices shown are per tonne on a FOT (free on truck) basis delivered Rotterdam/Antwerp, Singapore and Houston.

($1 = €0.77)

By: Staff Reporter
+44 20 8652 3214

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