Tight supply, low stocks spike Middle East PE, PP

27 June 2007 11:46  [Source: ICIS news]

SINGAPORE (ICIS news)-Extremely tight supply and low customer inventories caused Middle East polyethylene (PE) and polypropylene (PP) prices to surge by up to $60/tonne from last week, suppliers, traders and end users said on Wednesday.

 

Traders and end users said the main reason for the limited availability was diversion of cargoes from the Middle East to destinations such as Europe and Africa, where netbacks were higher.

 

The offers were snapped up by Middle East customers, who feared availability would be further restricted in the coming weeks. Traders and end users the region said PE allocations were reduced by 50%. PP allocations were not cut but supply was said to be quite limited.

 

Supply of low density PE (LDPE) saw the maximum squeeze, with cargoes heard sold at $1,490/tonne delivered (DEL) in the East Mediterranean (East Med) region and at $1,470-1,500/tonne DEL in the Gulf Cooperation Council (GCC) countries.

 

Some LDPE offers into Oman were even heard at $1,520/tonne DEL, but no confirmed deal was heard at that level.

 

High density PE (HDPE) and linear low density PE (LLDPE) prices rose by $10-30/tonne to $1,430/tonne DEL East Med and $1,370-1,430/tonne DEL GCC.

 

In the case of PP, prices rose by $30/tonne to $1,410/tonne DEL East Med and $1,390-1,410/tonne DEL GCC for raffia and injection grades and $20/tonne higher for film and fibre grades.

 

The major PE and PP producers in the Middle East include Saudi Basic Industries Corp (SABIC), EQUATE in Kuwait, Qatar Petrochemical Co (Qapco) and National Industrialisation Co (Tasnee) in Saudi Arabia.

 

By: Prema Viswanathan
+65 6780 4359

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