FocusS Korea PE export to S America may rise amid tight US C2 supply

08 December 2010 09:51  [Source: ICIS news]

By Chow Bee Lin

SINGAPORE (ICIS)--South Korea’s polyethylene (PE) shipments to South America may increase over the next four weeks, as US PE exports are likely to be constrained by tight ethylene (C2) supply, industry sources said on Wednesday.

South American importers had started enquiring for Korean PE as an alternative to US material, the Korean producers said.

Korean producers have been trying in recent years to capture a bigger share of the South American market, where sales can yield bigger margins compared to their traditional market in China.

South Korea exports mainly film grade HDPE and linear low density PE (LLDPE) to markets on the west coast of South America, such as Chile, Peru and Colombia, the industry sources said.

Korean cargoes are currently offered at $1,450-1,460/tonne (€1,088-1,095/tonne) for HDPE film grade and at $1,500-1,540/tonne for LLDPE, all on a CFR (cost and freight) basis for shipment to west coast South America from mid-December to early January, they said.

Bids for Korean film grade HDPE and LLDPE were around $50/tonne lower than the offers, but these buying indications were rejected as producers deemed the offers already competitive.

"Film grade HDPE from the US was offered at $1,470-1,480/tonne CFR west coast South America, so we don’t think Korean prices are too high,” a Korean producer said.

Major PE and PP producers in South Korea include LG Chem and Honam Petrochemical.

Freight from South Korea to the west coast of South America was estimated at $110-120/tonne, the Korean producer said.

($1 = €0.75)

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By: Chow Bee Lin
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