Indian PE buyers jittery following ExxonMobil outage

02 July 2010 08:39  [Source: ICIS news]

By Prema Viswanathan

SINGAPORE (ICIS news)--Indian polyethylene (PE) buyers are concerned about impending supply hiccups following an outage at ExxonMobil’s 600,000 tonne/year PE plant in Singapore, industry sources said on Friday.

“Customers of the company are worried that their July shipments will be delayed due to the unscheduled shutdown,” said a source close to a customer.

About 8,000 tonnes of PE were scheduled to be shipped from the ExxonMobil plant to India in July, the source added.

“What they are particularly concerned about is the shipments of linear low density PE (LLDPE), availability of which is limited,” he said.

“High density PE (HDPE) supply is more plentiful, especially from Saudi Arabia, but LLDPE is facing shortages due to limited supply of butene,” he added.

ExxonMobil had said earlier today that the outage would have an impact on its PE supply and that it was working towards meeting the customers’ needs.

Market sources said that ExxonMobil’s 405,000 tonne/year polypropylene (PP) plant at the same site in Singapore was also shut down along with the PE plant early this week, but supply concerns in the Indian market was not as strong for this material.

Exports of PP from the plant were limited due to the $40/tonne anti-dumping duty imposed by India on exports from Singapore, said an Indian end-user.

“We expect prices of LLDPE imports into India to firm following the ExxonMobil outage,” said a Delhi-based polymer trader.

LLDPE prices in India were at $1,220-1,260/tonne CFR (cost and freight) India last Friday, down $30/tonne week-on-week, according to ICIS pricing.

The supply situation in India had already been facing constraints due to the decline in imports of Iranian origin PE following the imposition of new sanctions by the UN and the directives put out by the US in June.

($1 = €0.80)

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