INEOS to convert Cologne LLDPE plant to MLLDPE by end of 2012

13 January 2012 12:24  [Source: ICIS news]

LONDON (ICIS)--INEOS’s 170,000 tonne/year C4 linear low density polyethylene (LLDPE) plant in Cologne, Germany, will be converted to metallocene linear low density polyethylene (MLLDPE) by the end of 2012, as MLLDPE consumption increases, buyers said on Friday.

“This has been planned for some time,” said a buyer, although no public announcement has been made by Switzerland-headquartered INEOS.

MLLDPE consumption is expected to grow in the coming years as its properties allow for finished film to be thinner, a process known as downgrading, making it environmentally more efficient as less material is used to make film.

“MLLDPE demand is good at the moment,” said a producer, commenting on volumes in January, “and prices are up by an average of €80/tonne ($103/tonne).”

A wide range of MLLDPE prices are reported in Europe at present. In December, special deals led to a collapse in pricing which saw some major producers selling C6 MLLDPE in the mid-€1,100s/tonne FD (free delivered) NWE (northwest Europe). Also C4 LLDPE was low, around €1,000/tonne FD NWE, below the headline contract price at the time of €1,080/tonne FD NWE.

Some buyers confirm price increases in the MLLDPE sector, but talk of more modest levels of around €50/tonne than some producers.

The ethylene contract price for January rose by €40/tonne and heavy production cutbacks in the wider PE market have led to a balanced-to-tight situation, allowing producers to increase prices.

“Our December results were the worst we have ever had,” said one polymer producer, and most agreed that fourth-quarter margins were not sustainable.

MLLDPE is used mainly in the packaging industry.

($1 = €0.78)

By: Linda Naylor
+44 20 8652 3214

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