22 August 2013 18:06 [Source: ICIS news]
HOUSTON (ICIS)--Mexico’s Pemex increased the price of polyethylene (PE) resins for all grades effective 20 August, effectively reversing the price reduction of 30 July, market sources said on Wednesday.
Pemex applied the largest increase to linear low density polyethylene (LLDPE) grades, which went up by 5.5% from July levels. Supply of this grade is tight after a week-long outage of the Morelos swing plant.
Pemex increased the price of high density polyethylene (HDPE) and low density polyethylene (LDPE) material by 5%.
The price increase was interpreted as a way to maximise revenue at a time when inventories are tight for some grades.
The Cangrejera cracker was stopped on 12 August for programmed maintenance and the reduction of ethylene will affect all users of this basic chemical.
Maintenance turnarounds in other PE plants have tightened supply for HDPE and LLDPE.
One train at the 100,000 tonne/year HDPE injection Asahi plant has also been down for programmed maintenance.
The Asahi train was scheduled to return on 27 August, but the cracker outage could keep this plant down for a longer period.
Another big factor on this increase is the fast rise of the US dollar, which has provided some room for Pemex to increase prices without losing competitiveness versus imported resins.
PE production will definitely decline in September and October, with less ethylene available.
Prior to this increase, LDPE prices were at $1,567-1,678/tonne (€1,175-1,259/tonne) FOT (free on truck), LLDPE prices at 1,365-1,484/tonne FOT and HDPE blow moulding prices at $1,414-1,495/tonne FOT, according to ICIS data.
Pemex is the only PE domestic producer in Mexico. The Braskem-Idesa joint venture (JV) for the Ethylene XXI project is scheduled to start PE production in late 2015.
$1 = €0.75
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