Sinopec to cut polymer output on poor demand

06 August 2008 10:44  [Source: ICIS news]

SHANGHAI (ICIS news)--China’s Sinopec plans to reduce polymer production in August due to its current high inventories and slow sales, a company sales manager said on Wednesday.

 

The company planned to cut low density polyethylene (LDPE) production by 20,000 tonnes in August, high density PE (HDPE) by 18,000 tonnes and linear low density PE (LLDPE) by 18,000 tonnes, the source said, adding polypropylene production would be cut by 28,000 tonnes.

  

Seven Sinopec subsidiaries were involved in reducing rates, comprising Yanshan Petrochemical, Qilu Petrochemical, Tianjin United, Yangzi Petrochemical, Shanghai Petrochemical, Guangzhou Petrochemical and Maoming Petrochemical, he added.

 

Sinopec’s current polymer inventory was estimated at around 400,000 tonnes, some traders said, adding that it remained to be seen if the reduction could lead to a rise in prices.

 

China’s polymer prices had experienced a sharp decline in July on bearish sentiment and inactive demand as weaker crude oil, ethylene values and drastic price cuts by local producers also weighed on the downside.

 

Some PE and PP grades declined by as much as yuan (CNY) 2,100-2,800/tonne ($305-407/tonne) during the month, traders said.

 

($1 = CNY6.86)

 

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By: Jade Xu
+65 6789 8828

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