JAPAN DISASTER: Japan seeks PE, PP imports to cover shortfalls

24 March 2011 09:36  [Source: ICIS news]

SINGAPORE (ICIS)--Japan will have to import polyethylene (PE) and polypropylene (PP) at least in the first half of this year as several plant shutdowns following the 11 March earthquake have created shortfall in supply, industry sources said on Thursday.

The country’s import demand is mainly for linear low density polyethylene (LLDPE) used in food packaging applications and block copolymer PP used mainly in automotive applications, the sources said.

A Taiwanese producer said it sold around 2,000 tonnes of LLDPE at $1,530-1,535/tonne (€1,086-1,090/tonne) CFR (cost & freight) Japan this week for April shipment.

A Korean producer said it received enquiries for LLDPE at around $1,500/tonne FOB (free on board) Korea for April shipment to Japan, but it could not sell material at that price as its offer was $100/tonne higher at $1,600/tonne FOB Korea.

Korean LLDPE was fetching prices at around $1,600/tonne FOB Korea for April shipment to Europe, he said.

The Korean producer said it had instead sold 1,500 tonnes of a specialty PE compound consisting of LLDPE and low density PE (LDPE), which was priced at $1,730-1,750/tonne CFR Japan for April shipment. The specialty PE compound is for lamination application for food packaging, the producer said.

A second Korean producer said it sold block copolymer PP last week at $1,790-1,800/tonne CFR Japan for prompt shipment.

Japanese trading houses have been enquiring about LLDPE re-exports from China, but transactions have been hampered by a gap in buy-sell ideas, Chinese traders said.

Offers for LLDPE re-exports from China were at $1,450/tonne FOB China for prompt lifting, against buying ideas at $1,400/tonne FOB China and lower, said a Japanese trader who was looking to buy the material.

Different sources of block copolymer PP were offered at $1,700/tonne FOB China for prompt re-export to Japan, with discussions under way, Chinese traders said.

Japanese converters would accept $1,700/tonne FOB China for prompt re-export to Japan as long as the product met its quality requirements, a second Japanese trader said.

There was speculation that some Japanese companies will divert some of their allocations from their joint-venture plants in the Middle East and southeast Asia to Japan, but this practice was currently not widespread, regional traders said.

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By: Chow Bee Lin
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