Further Saudi production issues constrain polymer supply - sources

12 May 2010 12:02  [Source: ICIS news]

Further Saudi production issues constrain polymer supplyLONDON (ICIS news)--Saudi Arabia-based Al-Waha Petrochemical Co’s polypropylene (PP) unit was taken offline this week owing to a technical issue at the Al Jubail site, a source close to production said on Wednesday.

The facility, with a nameplate capacity of 450,000 tonnes/year according to ICIS plants and projects data, had only recently come back on stream following scheduled maintenance.

It was unclear when the facility had gone down, but the source said: “We should be able to restart by next week.”

The latest production issue comes after a recent spate of supply constraints in the region.

Elsewhere, Saudi Ethylene and Polyethylene Co’s (SEPC) low density polyethylene (LDPE) plant remained offline this week following a technical issue at its Al Jubail site, a source close to production said.

The facility, with a nameplate capacity of 450,000 tonnes/year according to ICIS plants and projects data, had gone down on the weekend 1-2 May. It remained unclear whether the issue was linked to an earlier unplanned shutdown that had taken place at the company’s 400,000 tonne/year high density PE (HDPE) site at the same location. 

The source said: “Supply, particularly of LDPE and copolymer PP, is extremely tight at the moment and we are seeing a good demand, particularly from regions such as northern and eastern Africa, so prices continue to push up.”

However, several sources outlined their belief that the recent bull run of polymer prices seen in the wider market was now coming to an end.

One trader noted: “Prices are unsustainable. We expect values to drop at the end of the month because of more supply in the market and lower upstream values. We are already seeing this in the US market, and this will have a knock-on effect elsewhere.” 

For more on SEPC or Al-Waha, visit ICIS plants and projects
For more on PE or PP, visit ICIS chemical intelligence
To discuss issues facing the chemical industry go to ICIS connect

By: Stephanie Wilson
+44 20 8652 3214

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