13 December 2007 20:34 [Source: ICIS news]
HOUSTON (ICIS news)--Technical problems at Dow Chemical’s polyethylene (PE) plant in Argentina have created high-density PE (HDPE) supply shortages in the domestic market and, consequently, higher prices, sources in the country said on Thursday.
The 150,000 tonnes/year HDPE/linear-low-density PE (LLDPE) swing plant in Bahia Blanca, Argentina, was stopped a week ago and will remain idle for about six more days, according to a source with Dow.
The nature of the problem was undisclosed, but it involved the clearing of one unit clogged by off-spec material.
Natural-gas shortages had already caused inventory depletion during the winter in Argentina. The current technical glitch finds the company without reserve inventories, aggravating domestic supply.
As a result, imports from Brazil have been filling the supply gaps, but at a higher price.
Brazilian products usually sell at a premium over domestic material, which is subject to government price controls. The current shortages from the domestic producer are providing stronger justification for higher prices.
HDPE blow moulding prices have increased by $120/tonne in December, reaching a minimum of $1,650/tonne, according to global chemical market intelligence service ICIS pricing.This trend may be reversed in the short term, when domestic supply returns to normal, a Dow source said.
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