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July 21, 2008

4 Min Read
Price increase reprieve in Asia, but Polymerupdate

Polymerupdate (http://www.polymerupdate.com) reports that although buying momentum in polypropylene (PP) may have slowed in Asia due to current high ruling prices, traders it speaks with remain very bullish in their July and August outlooks. The likelihood of higher prices is not only linked to rising upstream costs, but also to ample PP demand outside Asia, including Latin America, with buyers there willing to pay prices well above $2000/tonne FOB.

Samsung Total has sold PP raffia and injection grades to China at $2050/tonne CFR, with PP copolymer sold at $2050/tonne CFR China. High-density polyethylene (HDPE) yarn offers to China are at $1850/tonne CFR China. Polymerupdate reports that Taiwan’s Formosa has sold PP raffia and injection grades to a Hong Kong based trader for $2050/tonne CFR Hong Kong, with biaxially oriented (PP) sold at $2070/tonne CFR Shanghai.

In South Korea, producer Hanwha concluded a sale of low-density polyethylene (LDPE) to China for $1950/tonne CFR, with linear low-density polyethylene (LLDPE) sold to China at $1850/tonne CFR, although following offers have been revised up to $1880/tonne CFR.

PP film offers to China from India’s Reliance Industries Ltd. have been seen at $2100/tonne CFR, while SK Energy of South Korea sold HDPE film to Latin America at $1900/tonne FOB Korea. PP raffia and injection grades have been sold by the producer at $2050/tonne CFR Indonesia and CFR Vietnam, with the producer lifting prices further.

In polyvinyl chloride (PVC), a Middle East producer sharply lifted domestic offers for the July in pipe-grade PVC. Prices rose by more than $50/tonne to $1380 to $1400/tonne over June where prices were at $1320 to $1330/tonne. In May, PVC pipe sold below $1290/tonne.

Polymerupdate reports that ethylene prices edged higher in South East Asia, with early August delivery sold at $1700/tonne CFR South East Asia. Elsewhere, sellers hiked ethylene offer prices to South East Asia by between $20 to $30/tonne, with some offers heard above $1730/tonne CIF. In propylene, a steep drop in domestic PP prices in China pushed spot prices of propylene in the region downward, with CFR China prices as low as $1800/tonne CFR.

In styrene monomer (SM), Polymerupdate reports that planned shutdowns are exerting their influence on the market. Mitsubishi Chemical will shutdown its unit this month while Denka will down its No. 4 SM unit in Chiba next month. Elsewhere, Japan’s Idemitsu and Taiyo will also shut their SM units. Taiwan’s Formosa plans to down its No. 3 SM unit while South Korea’s LG Chem, Samsung Total, and SK Energy have all scheduled shutdowns at their SM units. Finally, Indonesia’s SM No. 1 unit will shutdown for a turnaround as well. In light of that news, SM prices leapt higher to $1665/tonne FOB Korea, with CFR offers to China above $1670/tonne.

In European news, polyethylene terephthalate (PET) bottle-grade contract prices were at euro 1340/tonne FD North West Europe. In spot prices, PET bottle grade was assessed at euro 1305/tonne FD North West Europe. Film-grade PET contract prices last week were assessed at the euro 1305/tonne FD North West Europe.

PP contract prices, including homopolymer injection-grade PP, rose to euro 1265/tonne FD North West Europe while PP copolymer prices were assessed at euro 1320/tonne FD North West Europe. In spot markets, PP homopolymer prices rose by euro 10 to euro 1190/tonne FD North West Europe while PP copolymer prices also rose euro 10/tonne to euro 1240/tonne FD North West Europe.

PVC suspension-grade prices in Europe were unchanged, with contract prices assessed at euro 1035/tonne FD North West Europe. A sharp spike in ethylene feedstock prices from $1038 to $1228/tonne has prompted PVC producers to push for higher prices.

In polystyrene (PS), an SM production cut by Dow coupled with technical trouble at Italian producer Polimeri’s Mantova SM plant that prompted a force majeure left Europe’s PS markets bullish. General-purpose contract prices rose to euro 1485/tonne FD North West Europe, while high-impact contract prices climbed to euro 1535/tonne FD North West Europe.

Acrylonitrile butadiene styrene (ABS) contract prices in Europe rose to euro 1815/tonne FD North West Europe, up from euro 1780/tonne FD North West Europe. An announcement from Ineos in the U.S. of a 7 cent/lb hike in its August ABS prices also pressured the European market.

LLDPE firmed in Europe rising euro 100/tonne with FD North West Europe assessed at euro 1440/tonne. Spot LDPE prices have gained more than euro 20/tonne to euro 1340/tonne FD North West Europe due to a lack of imports; rising PE prices in Asia, the U.S., and Latin America; and strong upstream pricing fundamentals.

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