Dow Europe to cut June HDPE output by 20%

21 May 2008 12:25  [Source: ICIS news]

LONDON (ICIS news)--Dow Europe plans to cut high density polyethylene (HDPE) output by 20% over the next month in a bid to restore margin in the business, a company source said on Wednesday.

“It’s not the lack of demand that is affecting margins at the moment, it’s the costs that are overwhelming,” the source said.

“We cannot continue producing under these conditions. We have negative margins.”

HDPE has been slipping over the past three months, in spite of a €15/tonne ($23/tonne) increase in the second quarter ethylene contract price and a massive surge in crude oil and naphtha prices.

HDPE blowmoulding prices were trading in the low €1,300s/tonne FD (free delivered) NWE (northwest Europe) in May, on a gross basis. This level is subsequently discounted.

DOW produces HDPE at its 160,000 tonne/year Tessenderlo plant in Belgium.

Other HDPE producers in Europe include SABIC, INEOS Polyolefins, Borealis, Total Petrochemicals, Polimeri Europa and LyondellBasell.

($1 = €0.64)

For more on HDPE visit ICIS chemical intelligence
Click here to find out more on the European polyethylene margin report
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By: Staff Reporter
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