Basell Orlen Polyolefins declares FM on Poland HDPE - buyers

22 August 2012 11:09  [Source: ICIS news]

Polyethylene is used in agricultural applicationsLONDON (ICIS)--Basell Orlen Polyolefins (BOPS) has declared force majeure on some high density polyethylene (HDPE) grades from its 320,000 tonne/year plant in Plock, Poland, several buyers said on Wednesday.

The company, a 50-50 joint venture between LyondellBasell and PKN Orlen, declines to comment on its operations.

HDPE grades affected are thought to be blowmoulding, some film and injection grades.

“We have been informed of this,” said one large HDPE buyer, “but we don’t think we will be much affected unless the problems last beyond this week.”

HDPE buyers have been under pressure to pay higher prices in August, at least in line with the €140/tonne ($175/tonne) increase in the ethylene contract price, following a drop of up to €170/tonne in July.

Many polyethylene (PE) sources are now talking about another big increase for September, as upstream costs rise and availability of PE tightens following a surge in demand that has left some producers dry.

“We are expecting a three-digit increase in the September ethylene contract price,” said a producer. “Naphtha has gone back up to $950/tonne [CIF NWE].”

Naphtha fell to $683/tonne CIF (cost insurance freight) NWE (northwest Europe) during the week ending 22 June, triggering a €170/tonne drop in the July ethylene contract price that led to the PE price fall. The situation turned quickly as crude and naphtha prices surged only days following the monomer settlement, slashing PE producers’ margins.

Traders report an upturn in demand and increasing acceptance of higher prices as buyers come back from holiday to find a changed supply/demand situation.

($1 = €0.80)

By: Linda Naylor
+44 20 8652 3214

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