Mideast HDPE pipe prices for October fall by $50/tonne on weak demand

21 September 2011 11:12  [Source: ICIS news]

SINGAPORE (ICIS)--The Middle East spot prices of high density polyethylene (HDPE) pipe black 100 fell by $50/tonne for October shipments this week from settlements in September as the downstream construction sector has not improved following the Eid ul-Fitr holiday, market sources said on Wednesday.

Offers of HDPE from producers based in the Gulf Cooperation Council (GCC) region were heard at $1,560-1,620/tonne (€1,139-1,183/tonne) DEL (delivered) GCC/East Mediterranean (East Med) for October shipments, down by as much as $50/tonne. This is equivalent to $1,560-1,600/tonne CFR (cost & freight) GCC/East Med.

The prices declined because demand is poor in the Middle East and producers are unable to relief their mounting inventories as a result of poor sales in Asia and Europe.

This decrease in offers comes after two months of stable HDPE pipe black 100 prices.

Although offers heard were lower, converters are reluctant to book fresh material because of no new orders, local players said.

“The local governments are not introducing as many housing projects as expected. [The situation] is that of 12 pipe converters running after one housing project tender,” a Dubai-based converter said.

HDPE pipe grade is a raw material in the manufacture of water and sewage pipes in housing.

Offers of Thai material were lower by $10-20/tonne to $1,660/tonne CFR GCC for October shipments late last week, but the prices were deemed too high by market players.

A South Korean producer did not offer in the soft market in the GCC region and sold significant quantities to Iran at $1,640/tonne CFR for October shipments this week.

Market players are expecting the HDPE pipe prices to decline further primarily in line with the expected fall in upstream ethylene prices.

“The supply condition of ethylene will become better and this will weigh on the prices of HDPE pipe,” a northeast Asian producer said.

($1 = €0.73)

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By: Ong Sheau Ling
+65 6780 4359

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