08 February 2012 06:12 [Source: ICIS news]
SINGAPORE (ICIS)--Several producers of blow moulding high density polyethylene (HDPE) in China have switched to manufacturing other grades in February, which will decrease the supply of the product this month, industry sources said on Wednesday.
Panjin Ethylene, a subsidiary of Huajin Chemicals Group, switched to producing pipe-grade HDPE at its 300,000 tonne/year unit at Liaoning on 7 February for 15 days, a company source said.
Dushanzi Petrochemical switched from producing blow moulding-grade to pipe HDPE at its 300,000 tonne/year plant at Urumqi on 6 February for about 30 days, according to a source close to the company.
Maoming Petrochemical began manufacturing HDPE film at its 350,000 tonne/year HDPE unit in Guangdong on 6 February, and will resume production of the blow moulding grade in late February, a company source said.
The three companies are major producers of blow moulding HDPE in China and a decrease in supply is likely to affect the market, market players said.
Traders in eastern China said that the price of blow moulding HDPE is likely to increase because of the fall in supply availability.
However, traders in northern China said that import volumes of the blow moulding grade are ample and will be able to cover the shortage of domestic supply in the short run.
The import volumes of HDPE rose by 21.86% year on year to 368,800 tonnes in December 2011, according to China Customs statistics. The volume includes other HDPE grades, but indicates a higher volume of blow moulding imports as well.
Some traders in southern China said that port inventories in the area are high and they are attempting to offload cargoes. The market has been mainly consuming the high inventories and is not likely to face a supply shortage, they added.
Additional reporting by Angie Li, Rain Dong and Lizzie Yu
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