LME PLastics: LLDPE makes gains/PP prices hold

19 April 2007 14:05  [Source: ICIS news]

LONDON (ICIS news)--Polyethylene future prices continued to climb on the London Metal Exchange on Thursday while polypropylene held on to gains made earlier in the trading week.

The exchange’s official linear low density polyethylene (LLDPE) price climbed $15 to $1,200/tonne while PP held at $1,300/tonne. Bid/offer spreads narrowed on PP.

Trading interest had switched from PP to LLDPE on Wednesday with 108 lots of LLDPE and 10 lots of PP trading until 17:00 GMT according to broker reports.

May LLDPE had closed up $20 at $1,285/tonne on Wednesday and May PP up $10 at $1,185/tonne.

A supply-driven cyclical downturn for ethylene between 2009 and 2011 was forecast by Bank of America on Thursday.

INEOS said it did not expect the bottom of the cycle for some time with little disturbance in the PP market from new lower-cost capacity until 2010. Parts of the PP market will commoditise giving this as one reason why it will close its 200,000tonne/year PP1 unit at Geel, Belgium as planned during the second quarter.

Dow Chemical and Libya’s National Oil Corporation (NOC) had agreed to jointly operate and expand Libya’s Ras Lanuf petrochemicals complex to add further ethylene, polyethylene and PP capacities.

Date: Contract:
19 April 2007 LLDPE PP
LME reference price 1200 1300
Forward prices: Bid Offer Bid Offer
May 2007 1170 1200 1280 1300
June 2007 1185 1205 1280 1300
July 2007 1185

1205

1280 1300

The LME official or reference prices are the offer prices for the first forward delivery month - in this case May 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 = €0.74)


By: Staff Reporter
+44 20 8652 3214



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