LyondellBasell makes rate cuts at Europe crackers

30 October 2008 13:38  [Source: ICIS news]

LONDON (ICIS news)--LyondellBasell is cutting back its cracker output to accommodate poor downstream demand, particularly from the polyethylene (PE) sector, a company source said on Thursday.

“Demand has decreased sharply,” the source said. The company source declined to divulge precise operating rates for the crackers.

The company’s two crackers at Wesseling in Germany, with capacities of 290,000 tonnes/year and 760,000 tonnes/year respectively, will see cuts.

The 530,000 tonne/year cracker at Berre in France will also face reduced output.

The company’s fourth cracker, in Munchmunster, Germany, was already down for maintenance and is expected to start up in mid-November. It has a capacity of 320,000 tonnes/year.

The cutbacks coincided with others throughout Europe as downstream demand slumped.

Several PE producers described the current climate as the worst they had ever experienced.

Spot ethylene values were difficult to peg as business was so thin, but sources reported €600/tonne ($769/tonne)  on a free delivered (FD) northwest Europe (NWE) basis as a possibility.

The fourth-quarter contract stands at €1,120/tonne FD NWE, a number that market players widely consider to be too high to reflect the current circumstances.

($1 = €0.78)

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By: Linda Naylor
+44 20 8652 3214

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