Polimeri’s Ragusa LDPE plant goes down in tight market

21 January 2010 17:29  [Source: ICIS news]

LONDON (ICIS news)--Italian polyethylene (PE) producer Polimeri Europa’s 110,000 tonne/year low density PE (LDPE) plant at Ragusa in Italy has been out of action since Monday 18 January, a company source said on Thursday.

“The plant will be down for 15 days,” said the source.

The unplanned outage came at a time when several European producers were in the process of stopping new orders for LDPE in January due to the tightness in the market.

“We have a new high cut-off price for LDPE orders now,” said one major producer.

On Wednesday Borealis announced new prices effective from 25 January and up by €100/tonne from first-half January business.

Dow also closed new orders on LDPE business for January this week and announced €100/tonne increases for February business.

LDPE monthly prices rose by €80-100/tonne in January, leaving gross prices in the mid-€1,100/s/tonne FD (free delivered) NWE (northwest Europe).

Spot prices were reported in a very wide range, between €1,000/tonne and €1,120/tonne FD NWE, on a net basis. Traders did not hold high stocks, as little was available to them.

“It’s really tough,” said a buyer. “They seem to be serious, but it is impossible to pass on these increases to the market.”

Demand was described only as normal for the time of year by several sources, but producers had entered the year with very low stock levels and February was widely expected to remain a sellers’ market. New capacities had been delayed in the Middle East and imports were scarce.

New volumes would disturb the market at some point in 2010, however, said sources, either in the form of direct imports, or displaced exports from Europe.

“It’s all very uncertain,” said the buyer. “You have to keep your eyes open in this market. January and February will be higher, but who knows what will happen in March?”

Lower crude oil and naphtha prices affected buying sentiment adversely in China and European sources also kept a close eye on events in that market, adding to the nervousness domestically.

PE producers in Europe include Borealis, Dow, INEOS, LyondellBasell, Polimeri Europa, SABIC and Total Petrochemicals.

($1 = €0.71)

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By: Linda Naylor
+44 20 8652 3214

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