Colombia’s Ecopetrol reduces LDPE prices by 13%

11 November 2008 19:23  [Source: ICIS news]

HOUSTON (ICIS news)--Colombia’s Ecopetrol reduced the price of low density polyethylene (LDPE) by 13% this week to address soft demand and increased competitiveness from imports, Ecopetrol said on Tuesday.

The size of the weekly adjustment was a clear indication of demand deterioration in a market with ample supply of imported alternatives at competitive prices.

During the previous week, Ecopetrol had reduced prices by 8.2%.

A Colombian distributor said that most resellers and importers were losing money in Colombia because everyone had ample inventories of expensive material. In the present situation, that material can only be sold at a loss.

Currency fluctuations have also changed the equation in Colombia, but this week the Colombian peso (Ps) has been stable relative to the US dollar.

The price of bagged material at the producer’s warehouse was set at Ps3,655/kg free on truck (FOT), equivalent to $1,582/tonne (€1,234/tonne). Bulk material was slightly cheaper at Ps3,425/kg FOT, equivalent to $1,483/tonne (€1,156/tonne).

Despite a maintenance turnaround that has stopped LDPE production in Colombia, the local producer has built stocks with local production and with imports to keep clients supplied.

($1 = € 0.78)

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By: George Martin
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