08 January 2010 05:42 [Source: ICIS news]
By Chow Bee Lin and Peh Soo Hwee
SINGAPORE (ICIS news)--Polyethylene (PE) and polypropylene (PP) prices in Asia may rise as supply will be constrained with polymer giant Saudi Basic Industries Corp (SABIC) cutting its product allocations to the region, possibly pulling ethylene (C2) prices along, market sources said on Friday.
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Benchmark film grade HDPE and injection and yarn grade PP were sold $80-90/tonne (€56-63/tonne) higher from two weeks ago, but the gains were mainly driven by bullish sentiment triggered by high crude values in the past two weeks, local sources said.
Film grade HDPE was sold up to $1,360/tonne CFR (cost and freight) China CFR China this week, market sources said. Benchmark was offered up to $1,370/tonne CFR China for January shipment, but January deals were mostly cited below $1,300/tonne CFR China, the sources said.
Market sources estimated that Asia would likely get less than half its normal monthly volumes of PE and PP from SABIC in January and February due to some production issues at the company’s petrochemical facilities in
A power outage in late December disrupted the operations of the Yansab, Yanpet and Ibn Rushd petrochemical facilities, SABIC had said in a statement issued early this week, adding that it was working to restore normal operations.
The two crackers at Yanpet with combined ethylene capacity of more than 1.7m tonnes/year had restarted in early January, but the 1.3m tonne/year Yansab cracker was still off line and may only resume operations by the end of the month, according to traders.
A SABIC spokeswoman was not able to provide an immediate update on the facilities when contacted by ICIS news due to weekly holiday in Saudi Arabia.
If production issues at SABIC proved to be extensive, PE and PP supply in
Asian ethylene spot prices could be dragged along.
“SABIC doesn’t export ethylene from the Yanbu area so there’s no direct impact but if PE and MEG (mono ethylene glycol) prices go up, this could indirectly boost prices of the monomer,” an olefins trader said.
Tight supply had prompted some traders to raise their selling targets for spot parcels by $50/tonne to $1,300-1,350/tonne CFR (cost and freight)
End-users, wary of having to pay more for ethylene, were not keen on buying cargoes on a fixed price basis.
MEG daily spot prices were assessed at $970-980/tonne CFR China on Thursday while offers for high density polyethylene (HDPE) were heard above $1,300/tonne
($1 = €0.70)
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