Colombia's Ecopetrol reduces LDPE price 7%

28 October 2008 17:45  [Source: ICIS news]

HOUSTON (ICIS news)--Colombia’s Ecopetrol reduced prices of low density polyethylene (LDPE) by an average of 7% this week to keep domestic prices competitive with foreign alternatives, it said on Tuesday.

The weekly adjustment was intended to keep domestic production competitive with alternatives from the the US Gulf and Mexico, although currency fluctuations were also addressed by the price move.

The new prices were effective on Tuesday and will be in force for one week, when a new adjustment will take place.

With the reduction, the price of LDPE bagged at the packing warehouse will be Colombian pesos (Ps) 4,517/kg FOT (free on truck), equivalent to $1,887/tonne (€1,510/tonne). Bulk material was slightly cheaper at Ps4,287/kg or $1,791/tonne.

PE demand was weak in the country as buyers purchased minimal volumes while waiting for prices to reach bottom.

Inventories were adequate, despite a maintenance turnaround that started on 24 October and will have both PE production units down until the first week of December, a source at Ecopetrol said.

Under normal operating conditions, the two PE units have a combined output of about 4,000 tonnes/month. Ecopetrol has built emergency inventories ahead of the turnaround to keep clients supplied during the procedure, the source said.

Ecopetrol also complements local production with imports from Mexico and other origins.

($1 = Ps2,394/€0.80)

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By: George Martin
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