SABIC stops new Europe LDPE sales for January

19 January 2011 16:42  [Source: ICIS news]

LONDON (ICIS)--SABIC has stopped all new sales in Europe of low density polyethylene (LDPE) for January, a source with the Saudi Arabia-based petrochemical and plastics major said on Wednesday.

“Demand has been very good and we have stopped all new sales for LDPE and cast-film LLDPE (linear low density polyethylene),” said the source.

He added that SABIC’s plans for February PE pricing were not yet finalised, as the new February ethylene contract has not settled, and there was disagreement over how contract negotiations, which had not yet started, would proceed..

PE producers in Europe have talked of price increases of €30-90/tonne ($40-120/tonne) for the new contract.

The January ethylene contract rose by €105/tonne from December to €1,110/tonne FD (free delivered) NWE (northwest Europe).

January PE prices had risen in line with the ethylene contract, with some producers managing to also add some extra margin.

Dow Chemical has already announced plans of a €90/tonne increase for February PE, while INEOS said that it would attempt to raise PE prices by whatever the ethylene contract rises by next month, plus a €30/tonne margin increase.

Other producers were less ambitious and said they would so far aim to only recover the increase in the February ethylene monomer contract.

LDPE had increased by a minimum of €105/tonne from last month, with some sellers reporting an increase of €120-130/tonne on top of December levels. Net levels were reported at €1,400-1,450/tonne FD NWE.

LDPE availability was particularly tight as a result of production issues and the permanent closures in 2009 of several European production sites. Some sources said that the closures had led to a structural shortage of some LDPE grades.

LDPE is used in the manufacture of film for the packaging industry.

($1 = €0.75)

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By: Linda Naylor
+44 20 8652 3214



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