03 November 2011 04:42 [Source: ICIS news]
SINGAPORE (ICIS)--South Korea’s Polymirae will keep its polypropylene (PP) plants at Yeosu running at a reduced rate of 90% in November on squeezed margins, a source close to the company said on Thursday.
The producer’s four PP plants at Yeosu, with a combined capacity of 630,000 tonnes/year, have been running at 90% since early October as a result of squeezed margins, the source said.
“It has not decided whether to maintain the reduced operating rates in December, but it may have to if its margins don’t improve,” the source said.
Polymirae was not immediately available for comment.
The current spot prices of PP in northeast Asia are not workable for Polymirae because of the region’s high spot feedstock propylene prices, the source said.
The spread between PP and propylene is not enough to cover Polymirae’s variable costs, as it needs a minimum spread of $150/tonne, he said.
Spot PP yarn prices were assessed at $1,350-1,400/tonne (€986-1,022/tonne) CFR (cost & freight) China, and spot propylene prices were at $1,220-1,270/tonne CFR NE (northeast) Asia for the week ended 28 October, according to ICIS.
($1 = €0.73)
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