Chile’s LDPE supply tightens on ethylene squeeze

14 February 2012 21:07  [Source: ICIS news]

HOUSTON (ICIS)--Stocks of polyethylene (PE) have fallen rapidly in Chile because of lack of ethylene from local refiner Enap, but PE production has restarted and deliveries will resume shortly, a source at Dow Chemical said on Tuesday.

Technical difficulties at the Enap refinery in Talcahuano caused nearby downstream plants to stop for more than a week, straining supply of polymers.

The affected plants were the 46,000 tonne/year Dow low density PE (LDPE) plant and the 120,000 tonne/year Petroquim polypropylene (PP) plant in Talcahuano.

A distributor that sells domestic LDPE said it had sold out their PE stocks, and expected to receive new volumes on 20 February.

In the meantime, the only alternative is to buy back product from clients with large stocks, or to receive material from nearby regional producers.

Material from other regions was not expected to arrive soon enough.

However, Chile must import high density PE (HDPE) and linear low density PE (LLDPE) routinely from other countries, because there is no domestic production of those grades.

The Enap outage had also limited ethylene and propylene supply to Petroquim, which was running low in the stocks of some PP grades, particularly copolymers.

Although Enap did not comment, it was believed that monomer production may have resumed at the Talcahuano plant, because Dow has already restarted production of polymers this week.

PE prices have increased in Chile in recent weeks, following the international trend. The latest levels  in the domestic market ranged from $1,720-1,900/tonne (€1,307-1,444/tonne) DEL (delivered), based on ICIS data.

Petroquim, the PP producer did not immediately return calls for comments.

($1 = €0.76)

By: George Martin
+1 713 525 2653

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