Polymerupdate Asian resin pricing, March 2-6: PP pressured by 3.5 million tonnes of new capacity

Polypropylene (PP) supplies were impacted by new plant start ups according to Polymerupdate, but processors contacted by the petrochemical consulting firm said some resin producers were still attempting to push through price increases on the basis of gains in propylene in spite of new and pending supplies. From March to June new plants in the Middle East and China will supply a combined output capacity of more than 3.5 million tonnes/yr of PP.

Polypropylene (PP) supplies were impacted by new plant start ups according to Polymerupdate, but processors contacted by the petrochemical consulting firm said some resin producers were still attempting to push through price increases on the basis of gains in propylene in spite of new and pending supplies. From March to June new plants in the Middle East and China will supply a combined output capacity of more than 3.5 million tonnes/yr of PP. Polymerupdate says this will add more 300,000 tonnes/month of PP supply, with a bulk of the shipments destined for Asia. At the end of March, India’s Reliance Industries will start up its new 900,000 tonnes/yr PP plant in Jamnagar in Gujarat. In addition, PetroRabigh will launch its 700,000 tonnes/yr PP unit in Saudi Arabia; Natpet’s 400,000 tonnes/yr PP plant in Yanbu, Saudi Arabia is due to start up, as is Ibn Zahr’s (Saudi European Petrochemical) expanded PP plant, which added 500,000 tonnes/yr capacity in Al Jubail. Also set to begin production is Saudi’s Al Waha site, with 450,000 tonnes/yr of PP capacity, and is scheduled to start up an expanded plant with an additional 270,000 tonnes/yr of PP capacity. Finally, in China, Fujian Refining and Petrochemical Co. will start up its new 400,000 tonnes/yr PP plant within the first half of 2009.

Ethylene prices in Asia were flat last week, despite gains in upstream crude and naphtha and unplanned cracker outages in South Korea and Taiwan. Polymerupdate reports that Samsung Total shut down its 850,000 tonnes/yr cracker at Daesan last Tuesday for emergency repairs. On Monday, March 9, a 600,000 tonnes/yr cracker belonging Formosa was hit by an explosion, affecting the production of pyrolysis gasoline. CFR Northeast Asian ethylene prices were assessed at $630 to $640/tonne, while CFR South East Asia prices were assessed at $600 to $610/tonne.

High-density polyethylene (HDPE) film prices in the downstream markets dropped to $930 to $940/tonne on a CFR Northeast Asia basis. Low-density polyethylene (LDPE) prices were assessed at $980 to $990/tonne CFR Northeast Asia, with linear low-density polyethylene (LLDPE) prices dropping to $970 to $980/tonne.

Propylene prices finished higher in Asia last week, despite softer downstream polypropylene prices. By last Friday, FOB Korea propylene rates were at $675/tonne, with CFR Southeast Asia prices reaching $770/tonne and CFR China prices at $730/tonne. Samsung Total shut down two of its propylene plants for two days last week due to mechanical issues, with the aforementioned explosion at Formosa’s site in Taiwan, shutting down some production. A fire at Idemitsu’s oil refinery in Tokuyama last Thursday also stoked fears of limited propylene availability. Indonesia’s Chandra Asri shut its propylene plant for maintenance, while Pertamina was impacted by production issues at its 250,000 tonnes/yr propylene plant.

Styrene Monomer (SM) prices gained in Asia last week, lifted by strong regional demand and reports of tight availability. Week over week, SM prices increased by more than $30/tonne with FOB Korea prices assessed last Friday at $790/tonne. CFR China prices rose to $800/tonne, while CFR India SM prices hit $815 to $820/tonne. In forward contracts, April seller offers have reached $820/tonne CFR China. In plant news, Polymerupdate reports that second quarter turnarounds are planned at various SM plants in Asia, including LG Chem in South Korea; Shanghai Secco in China; Nippon Steel in Japan; and TSMC and Formosa lines in Taiwan.

Polystyrene (PS) prices moved higher on the SM increases. General-purpose CFR China prices rose to $855/tonne, while CFR South East Asia prices hit $880/tonne. High-impact prices reached $975/tonne CFR China, while CFR Southeast Asia prices were assessed at $990/tonne. mpweditorial@cancom.com  

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