16 April 2007 17:45 [Source: ICIS news]
LONDON (ICIS news)--High density polyethylene (HDPE) producers in ?xml:namespace>
“I can’t see this situation changing for the next couple of months at least,” said one producer on Monday. “Sales have outstripped production every month in quarter one, and volumes are higher than quarter one last year.”
“We have not got one gram of extra material for spot,” said another.
The market put this unexpected tightening down to several reasons.
Imported volumes were limited. SABIC reported earlier in April that imported volumes into
Production issues in late 2006, and several more recent ones, including force majeure from Total Petrochemicals on its 250,000 tonne/year HDPE unit in
Blowmoulding demand in particular has been strong and buyers admitted that it was impossible to avoid price increases in April.
One major producer commented that the current strong growth in this sector was partially down to new products in the dairy industry, promoting the use of daily doses of dairy products which he estimated used between 30-50,000 tonnes HDPE blowmoulding a year.
This was set to rise, he said, as the beauty and dairy industries joined forces to create new products which would be packaged in small HDPE bottles.
Commodity grades in general were expected to shrink in volume in the long-term as new Middle Eastern capacity would be on stream, based on a cheaper feedstock which would drive European producers to seek higher-margin speciality product. Sources said that this process had already begun.
HDPE blowmoulding buyers have been forced to pay €30-40/tonne ($41-54/tonne) more this month, leaving prices at €1,250-1,270/tonne FD (free delivered) NWE (northwest Europe) and they feared that more increases could be coming their way next month.
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