14 April 2008 16:59 [Source: ICIS news]
By Linda Naylor
LONDON (ICIS news)--Polyethylene (PE) prices are slipping in April as weaker demand weighed against record high oil and naphtha prices and an increase in second-quarter ethylene costs, market sources said on Monday.
“We have managed to secure low density PE [LDPE] at a reduction of €20/tonne [$31/tonne] over March,” said one large buyer.
LDPE gross prices were trading around €1,300/tonne FD (free delivered) NWE (northwest Europe). Spot levels were lower.
Some producers had been talking of €15-20/tonne increases for April business, but this talk dissipated as lower prices were offered on several polyethylene (PE) grades for April.
March demand was not particularly strong and some producers’ inventories built up. They were more optimistic for April volumes, however.
“April has to be better than March,” said one major European PE producer. “It’s a long working month and we are already seeing more promising volumes than in March.”
Linear low density PE (LLDPE) prices were stable, as imported volumes from Saudi Arabia were cut significantly for April and Polimeri Europa’s unplanned outage at
High density polyethylene (HDPE) prices were also easing back, as the weak dollar meant that imported volumes were widely offered in
HDPE prices slipped around €10-15/tonne, but buyers were hoping for more as the month progressed.
Several PE producers acknowledged that production would have to be cut back if demand did not pick up.
New capacities coming on stream in the Middle East were adding to the nervousness felt in much of
Laleh Petrochemical has begun trial production at its 300,000 tonne/year LDPE project at Bandar Imam, Iran, and expected to achieve commercial production in April, a source close to the company said.
Arya Sasol has begun trial production at its new 300,000 tonne/year LDPE plant in Assaluyeh, Iran, and expects to achieve commercial production at the end of April, a source close to the company said. Exports would begin soon after, the source added.
Jam Petrochemical, also of Iran, expected to start up its PE plants by the end of April, having achieved on-spec production at its Assaluyeh cracker. Jam’s PE plants include a 300,000 tonne/year HDPE plant and a 300,000 tonne/year HDPE/LLDPE swing plant.
Elsewhere, Saudi Aramco/Sumitomo Chemical joint venture PetroRabigh planned to start up its 900,000 tonne/year PE plant at
Much PE business in Europe was still to be discussed as the practice of retroactive pricing was still widespread.
PE producers in
($1 = €0.64)
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