June 13, 2008
News of a fire at Sinopec’s Maoming naphtha cracker rattled Asian’s high-density polyethylene (HDPE) market, when it was believed that output at a 500,000 tonnes/yr HDPE/low-density polyethylene (LDPE) swing plant was affected. According to Polymerupdate (http://www.polymerupdate.com), the outage pushed HDPE higher with injection and yarn prices in the Far East up sharply above $1750/tonne CFR. HD film and blowmolding offers are both above $1730/tonne CFR.
In polystyrene (PS), styrene monomer (SM) feedstock prices rose more than $200/tonne while PS prices have lagged, gaining just over $100/tonne. Current SM prices are at $1640/tonne FOB Korea, and given that a minimum spread of $120/tonne is needed by PS makers to overcome negative margins, a steep increase in general purpose and high impact prices will be necessary. PS rose by more than $60/tonne across the Asian region.
In acrylonitrile butadiene styrene (ABS), prices increased from $40 to $60/tonne with CFR China offers for ABS at $2100/tonne. Offers have been heard at $2120/tonne CFR China and at $2150/tonne CFR from a South Korean producer according to Polymerupdate. Here too, the outage at the Sinopec Maoming unit affected a 100 kt/yr SM unit, a 50 kt/yr acrylonitrile unit, and a 50 kt/yr butadiene unit.
In polyolefins, Basell has announced its July offers for polypropylene (PP) injection at $1836/tonne CIF Nhava Sheval. The offers for PP raffia were also higher at $1846/tonne CIF Nhava Sheval. PP film offers from Basell for July are up sharply at $1856/tonne CIF Nhava Sheval. ExxonMobil offers for HMHDPE are pegged at $1750/tonne for shipment in June at CIF Nhava Sheval.
Indonesian based PP maker Tri Polyta is taking its offer rates higher on the basis of strong demand, limited inventories, and higher propylene prices. The monomer reached $1560/tonne FOB Korea, and Tri Polyta responded by lifting domestic PP rates by $30/tonnes this week.
In polyethylene terephthalate (PET), the fact that key feedstock terephthalic acid (PTA) is up $100/tonne from last month has forced one PET producer to withdraw offers and reconsider prices for bottle grade PET going forward. Elsewhere, CFR offers for PET bottle grade resin rose above $1500/tonne CFR Asia.
Low-density polyethylene (LDPE) prices firmed in Asia last week, rising due to tight regional availability. General purpose offers from Middle East suppliers rose above $1850/tonne CFR China mark for June deliveries with offers to India seen above $1900/tonne CFR. Things could move higher, with Polymerupdate positing that if crude tests highs above the $150/barrel mark, LDPE could hit the $2000/tonne CFR Asia by July.
In European pricing news, ABS natural-grade and general-purpose contract prices in Europe firmed last week, with prices at euro 1740/tonne FD North West Europe. Gains in upstream ACN, butadiene and SM prompted the hike as did a sharp rise in ABS prices in Asia. Polymerupdate said gains in European ABS rates are lagging spikes of $100/tonne in Asian rates. In the spot market, ABS ranged from euro 1485 to euro 1495/tonne FD North West Europe. Prices area expected to edge above euro 1500/tonne FD levels within this week. For its part, Dow announced that effective June 1, 2008, or as contract terms allow, Magnum ABS prices has been revised by euro 150/tonne, with Tyril SAN lifted by euro 100/tonne.
PP prices were flat last week at euro 1195/tonne FD North West Europe for injection grades and euro 1250/tonne FD North West Europe for copolymer grades, with spot prices gaining. LyondellBasell has announced a hike of euro 40/tonnes in its PP contract prices effective June 1, while Dow Europe announced a hike of euro 50/tonne. Others are also considering adjustments in their PP grades according to Polymerupdate, ranging from euro 30 to euro 50/tonne.
PS contract prices were unchanged in Europe last week at euro 1385/tonne FD North West Europe for general purpose and euro 1440/tonne FD North West Europe for high impact. In spot markets, general purpose was assessed at euro 1175/tonne FD North West Europe while high impact was seen at euro 1210/tonne FD North West Europe.
An increase in the bi-monthly price of ethylene feedstock, declining production margins, and robust spot demand pushed linear low-density polyethylene (LLDPE) spot prices higher in Europe. Contract prices have been recorded at euro 1285/tonne FD North West Europe for butene-grade LLDPE. Spot prices of LLDPE have firmed to euro 1220/tonne FD North West Europe. Dow Europe announced an increase of euro 150/tonne, effective June 1. Polymerupdate says others are considering hikes ranging from euro 80 to euro 100/tonne.
LDPE general purpose contract prices were down to euro 1295/tonne FD North West Europe. Spot prices firmed, rising on the back of increased upstream ethylene costs. In the spot markets, LDPE climbed euro 20/tonne and are up to euro 1240/tonne FD North West Europe. June will see contract prices rise given the squeezed production margins, with Dow Europe increasing prices by euro 150/tonne for all LDPE, LLDPE, HDPE resins, as well as Affinity and Engage polyolefin elastomers.
Polyvinyl chloride (PVC) producers are seeking increases in June contract prices in line with a steep spike in third quarter rates of upstream ethylene. Polymerupdate says some PVC producers are seeking hikes of euro 30 to euro 40/tonne, with others wanting sharper increases above euro 50/tonne. Contract prices are currently at euro 1020/tonne FD North West Europe.
In European plant news, Total is reportedly taking down its PS plant located in Gonfreville this month for a planned turnaround. Elsewhere, Dow Europe is reported to have taken down one of its lines in Tarragona, Spain due to negative margins. The LDPE line has an output capacity of 75 kt/yr.
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