01 July 2009 05:49 [Source: ICIS news]
By Peh Soo Hwee
SINGAPORE (ICIS news)--Asian cracker operators plan to keep ethylene production at close to full rates for the third straight month in July, against earlier expectations, due to prevailing strong derivative polymer prices, industry sources said on Wednesday.
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“This is the time to ramp up production and push product out,” said one olefins producer. “After September, who knows what will happen?” the source said referring to new capacities which were expected to come on stream after July-August.
Delays in polyethylene (PE) and monoethylene glycol (MEG) exports to Asia from the Middle East and postponements in the start up of new crackers in China had kept polymer prices riding high in June although PE demand had started to taper off following the price spike.
High density polyethylene (HDPE) film grade spot prices were assessed at $1,200-1,280/tonne(€852-909/tonne) CFR (cost and freight)
This represented a healthy spread of around $300/tonne compared with ethylene spot prices, which were at a eight-month high of $910-950/tonne CFR NE Asia over the same period, according to data from global chemical market intelligence service ICIS pricing.
The fat margins that PE makers currently enjoy have spurred some olefins traders to set ethylene price targets at above $1,000/tonne CFR Asia after recent reported deals at $920-950/tonne FOB (free on board)
The rebound in feedstock naphtha and crude values to above $71/bbl early this week were also expected to provide some support for the monomer.
Several traders said there was a higher chance for ethylene prices in southeast Asia to breach the $1,000/tonne level as recent cracker shutdowns and high derivative polymer operating rates in
“Buyers in southeast Asia will have to pay more because of the lack of supply from
($1 = €0.71)
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