Europe HDPE pipe buyers face hikes for August deliveries

15 August 2013 17:18  [Source: ICIS news]

(recasts, making clear price hikes relate to HDPE pipe)

LONDON (ICIS)--High density polyethylene (HDPE) pipe buyers are having to pay increases of at least €40/tonne ($53/tonne) in August, in line with the rise in the August ethylene contract price, several said on Thursday.

HDPE availability has tightened recently as imports have been reduced in volume and demand has improved.

“Even the pipe market has improved,” said one producer.

The HDPE pipe market has been suffering because of the weak state of the construction industry throughout Europe, but sources were heartened by this week’s positive economic data from the euro zone.

“We can see it in our volumes,” said one pipe buyer in the construction sector.

Some sources did not expect the upturn to be long-lived, as higher prices would attract imports from other regions as Europe sported better netbacks.

Some HDPE closures in Europe are expected to have a limited effect on availability in the pipe sector.

HDPE closures

Dow

Tessenderlo, Belgium

190kt

closed

End 2012

Total

Antwerp, Belgium

70kt

to close

2014

LBI

Wesseling, Germany

100 kt

to close

Q3 2013

Borealis

Burghausen, Germany

175kt

to close

End 2014


Increased capacity in the Middle East is expected to cover European buyers’ needs.

Saudi Polymers brought online an HDPE plant in 2012 at its facility in Al-Jubail, Saudi Arabia, with an HDPE capacity of 1.1m tonnes/year.

Borouge 3, located in Ruwais, is expected to raise Borouge’s olefins and polyolefins capacity to around 4.5m tonnes/year from the current 2m tonnes/year.

The project includes construction of a third ethane cracker, two additional Borstar PE plants, two additional Borstar PP plants and a low density polyethylene (LDPE) unit. Marketable product is not expected from this plant before the second quarter 2014 at the earliest.

HDPE PE 100 prices are assessed at €1,445-1,465/tonne FD (free delivered) NWE (northwest Europe) on a gross basis.

($1 = €0.75)


By: Linda Naylor
+44 20 8652 3214



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