FocusChina, SE Asia PE, PP prices to rise on Al-Jubail outages
20 January 2012 06:36 [Source: ICIS news]
By Chow Bee Lin
?xml:namespace>SINGAPORE (ICIS)--Polyethylene (PE) and polypropylene (PP) prices in China and southeast Asia are expected to rise in the coming weeks if the facilities in Al-Jubail, Saudi Arabia, suffer a prolonged shutdown after a power trip, industry sources said on Friday.
“Al-Jubail is a very important area for PE and PP,” a major China-based trader said referring to the industrial site which is a major source of supply to Chinese and southeast Asian markets.
All the PE and PP plants in Al-Jubail were shut late evening on 19 January but it was not known how many of those plants have resumed production.
Trading activity was slow in China and many parts of southeast Asia on Friday because of the upcoming Lunar New Year holiday, but discussion levels are expected to rise when the markets regain momentum after the holiday.
China will be closed on 22-28 January for the Lunar New Year holiday while Taiwan will have a three-day holiday. South Korea, Singapore, Indonesia and Malaysia will also be closed for two days at the start of next week.
Saudi Arabia accounted for about 18% of China’s total PP and PE import during the January-November period last year, according to China custom’s data.
Any shortfall in Saudi Arabia’s export to China is likely to affect linear low density PE (LLDPE) most significantly because Saudi Arabia is a major exporter of this PE grade to China, Chinese traders said.
Saudi Arabia accounted for 26% of China’s total LLDPE import in the January-November period last year, China custom’s data showed.
Suppliers are expected to raise their price offers for Middle East PP homopolymer grades to at least $1,350/tonne (€1,040/tonne) CFR (cost and freight) China and to the high-$1,300s/tonne CFR southeast Asia (SE Asia) when trade resumes to the normal level in mid February, Asian traders said.
Middle East PP homopolymers were offered at $1,330/tonne CFR China and $1,350/tonne CFR SE Asia before news of the Al-Jubail plant outages emerged, they said.
Film grade linear low density PE (LLDPE) and high density polyethylene (HDPE) from the Middle East were offered at $1,220/tonne and in the low to mid-$1,300s/tonne, on a CFR China and SE Asia basis earlier in the week, they said.
Price offers for these film grades PE are expected to rise by at least $20-30/tonne in the coming weeks if the plants in Al-Jubail do not resume production shortly, they added.
Key exporters of PE and PP to China who have facilities in Al-Jubail are Sabic, LyondellBasell, Petrochemical Industrial (NATPET) and Advanced Polypropylene.
Additional reporting by Amy Yu, Belle Huo
($1 = €0.77)
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