06 September 2013 09:53 [Source: ICIS news]
SINGAPORE (ICIS)--China’s domestic polyethylene (PE) prices rose this week as a result of reduced allocations from major domestic producers including state-owned Sinopec and Petrochina, industry sources said on Friday.
The allocation cut took place in low density PE (LDPE), linear LDPE (LLDPE) and injection grades high density PE (HDPE), they added.
The LDPE film grade weekly domestic prices in southern China were at CNY12,300-12,750/tonne ($2,101-2,083/tonne) in the week ended 5 September, CNY250-350/tonne higher from last week, according to ICIS.
Sinopec cut their allocations for general LDPE film in South China because of reduced supply from Maoming Petrochemical, a Sinopec subsidiary, a Sinopec source said.
Maoming Petrochemical’s 250,000tonne/year new LDPE plant switched from general purpose grade to produce heavy packaging grade this week, a company source said.
The LLDPE film grade weekly domestic prices in eastern China were at CNY11,500-11,600/tonne EXWH in the week ended 5 September, CNY150-300/tonne higher from last week, according to ICIS.
In east China, PetroChina’s sales office cut its supply allocations for LLDPE film due to limited spot availability, a company source said.
The availability was tight because arbitrage opportunities in the local LLDPE futures market had fuelled demand for spot LLDPE cargoes in the past weeks, local traders said.
PetroChina had also cut its supply allocations for HDPE injection grades across China because of a tighter supply in September, a company source said.
Local supply of HDPE injection grade was tightened after local producer Shenhua (Baotou) Charcoal Chemical switched its 300,000tonne/year HDPE/LLDPE swing unit in Inner Mongolia from HDPE injection grade to produce LLDPE film at the end of August, local traders said.
PetroChina’s subsidiary Dushanzi Petrochemical would be producing HDPE film and pipe grades at its 300,000tonne/year HDPE/LLDPE swing unit, in Xinjiang province in September, a company source said.
Daqing Petrochemical, another PetroChina subsidiary, shut its 250,000tonne/year HDPE/LLDPE swing unit since early August for maintenance, a company source said.
The HDPE injection grade weekly domestic prices were at CNY10,750-11,450/tonne EXWH in the week ended 5 September, CNY150-300/tonne higher from last week, according to ICIS.
Additional report by Lizzie Yu and Chow Bee Lin
($1 = CNY6.12)
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