Lotte Chem Titan cuts Indonesia Oct PE output on margin squeeze

04 October 2013 09:49  [Source: ICIS news]

SINGAPORE (ICIS)--PT Lotte Chemical Titan has cut its polyethylene (PE) production in Merak, Indonesia this month because of squeezed margins, a source close to the company said on Friday.

Its 125,000 tonne/year high density PE (HDPE) unit; 125,000 tonne/year HDPE/linear low density PE (LLDPE) swing plant;  and 200,000 tonne/year linear low density PE (LLDPE) unit have been running at around 70% of capacity early this month, the source said.

The run rate is expected to be kept for the whole of October, the source said.

In September, the plants were running at around 90% of capacity.

Lotte Chemical was not immediately available for comment.

PE resins typically have to be priced at least $150/tonne (€110/tonne) higher than feedstock ethylene in order for naphtha-based PE plants in Asia to be viable, the source said. 

Based on assessed prices in late September, the price spread between ethylene and film grade HDPE/LLDPE has narrowed to around $100/tonne.

On 27 September, ethylene spot prices averaged $1,420/tonne CFR (cost and freight) southeast (SE) Asia, while film grade HDPE and LLDPE spot prices were at $1,520/tonne CFR SE Asia and $1,525/tonne CFR SE Asia, respectively, according to ICIS.

($1 = €0.73)


By: Chow Bee Lin
+65 6780 4359



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