Dow Europe closes LLDPE orders, seeks hikes with immediate effect

15 November 2013 17:02  [Source: ICIS news]

LONDON (ICIS)--Dow Europe has closed its linear low density polyethylene (LLDPE) order books for November, following a similar move on low density polyethylene (LDPE) over the past week, a company source said on Friday.

“There is not a drop left,” said the source.

LDPE and LLDPE demand has improved in November after two flat months.

Production was subsequently cut back, and Dow said it will shut its Tarragona, Spain, cracker temporarily on 1 December because of challenging market conditions and an unclear demand picture for polyethylene (PE).

Cutbacks elsewhere are understood to be hefty but there has been little confirmation from suppliers. However, there is evidence of a rapid tightening of LDPE and LLDPE availability.

“We haven’t been able to get any extra volumes of C6 [hexene-based LLDPE],” said one buyer.

Dow’s Tarragona site has both LDPE and LLDPE production and the company was now implementing increases on prices that were not settled for the month.

Most monthly prices are being discussed, or have already settled, at a €30/tonne ($41/tonne) decrease, in line with the drop in the November ethylene contract.

Many sources are still looking upstream, with naphtha prices having firmed in recent days which is adding to producers’ production costs.

This week most PE players said they expect a rollover in December ethylene contract pricing, but some spoke of a possible increase if naphtha continues to rise. This will inevitably put pressure on PE buyers in December.

Machines will be shut and working capital considerations will be uppermost in converters’ minds. This is not the end of the year that many players had envisaged, sources said.

($1 = €0.74)

By: Linda Naylor
+44 20 8652 3214

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