Formosa Plastics sells HDPE pipe resins on weak film prices

07 June 2010 12:49  [Source: ICIS news]

SINGAPORE (ICIS news)--Formosa Plastics Corp has been exporting more high density polyethylene (HDPE) pipe resins to the Middle East, where netbacks are higher, a source with the Taiwan-based producer said on Monday.

“We’re selling HDPE pipe grades to Iran at $1,240-1,300/tonne (€1,042-1,092/tonne) FOB (free on board) Taiwan, but such prices are not accepted for film grade HDPE in China,” said the source.

The amount that Formosa Plastics sold to Iran was 1,500 tonnes for June shipment, and it was negotiating a deal for another 1,500 tonnes of HDPE pipe grade to Dubai, the source said.

HDPE film grade prices have been under downward pressure in the Chinese market over the past few months due to ample supply of product from Iran, traders in China said.

HDPE film grade was assessed at $1,080-1,180/tonne CFR (cost and freight) China for the week ended 6 June, according to ICIS pricing.

The HDPE film grade weekly average has fallen by around 13% in the past six months to $1,140/tonne CFR China in the week ended 4 June, down from $1,315/tonne CFR China in the week ended 8 January, according to ICIS pricing.

Formosa has two HDPE facilities at Mailiao and Linyuan, which have a combined capacity of 530,000 tonnes/year.

($1 = €0.82)

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By: Chow Bee Lin
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