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June 23, 2008

5 Min Read
Polymerupdate global resin pricing and plant news

Indonesian polypropylene (PP) maker TriPolyta told Polymerupdate that July delivery prices for PP into the domestic market were hiked again. PP prices had already been increased by $100/tonne this month, and starting June 11, prices were lifted by a further $50/tonne. TriPolyta justified the increases on the basis of higher crude, naphtha, and propylene, with the latter at $1750/tonne FOB Korea.

South Korean PP offers heard at the $2030/tonne CFR levels - Jun 11, 2008

While speaking with an individual working for a PP producer in South Korea a short while ago, a Polymerupdate team member was told on condition of anonymity, "We are not offering any PP to our clients at this time. We have withdrawn our offers for all our PP grades since last week and plan to announce our revised offers only once the volatility and chaos seen in the markets ease."

PP and polyethylene (PE) offers to China climbed with polyolefin availability having tightened considerably in China, resulting in pricing speculation by regional markets. Polymerupdate reports that despite a drop in crude, PP and PE price offers to China have rallied more than $100/tonne. PP injection and raffia grades surfaced at above $1900/tonne CFR, with HDPE prices at $1810/tonne CFR China and LLDPE prices are at $1800/tonne CFR levels. Japan Polyethylene Corp. and Japan Polypropylene Corp. announced they will hike their PE and PP prices effective July 1, lifting them by 38 yen/kg. This is above the initially announced increases for July of 20 yen/kg.

Polyvinyl chloride (PVC) offers in the Far East are above $1220/tonne CFR, with similar levels heard across South East Asian. Polymerupdate reports that PVC sellers are unable to immediately achieve sharper gains due to relatively flat demand and tough competition from the U.S. where exporters are pricing their PVC to Asia at levels below those seen in the Far East. Shin-Etsu Chemical Co. said it will lift PVC prices by 20 yen/kg for shipments starting from July 14.

In China, domestic prices of high density polyethylene (HDPE) rallied RMB 2000/tonne to RMB 16500/tonne earlier in the week. Currently, on an import parity basis, local HDPE prices in China are well above $1800/tonne CFR. Polymerupdate reports that this has forced overseas suppliers to hike their offers pushing injection- and yarn-grades above $1850/tonne CFR, while HDPE film is at $1820 to $1830/tonne CFR. Some offers to South Asia have edged past $1900/tonne CFR.

A source told Polymerupdate that the market is being driven by a number of things, including plans by the government to cut subsidies, and directives to local producers to slash downstream output and keep oil for earthquake relief and reconstruction efforts. In addition, with the approaching Beijing Olympics, restrictions have been imposed on transportation of hazardous chemicals with many factories ordered to halt production during the August period of the games to mitigate pollution.

Low-density polyethylene (LDPE) prices edged higher in Asia, but gains there lagged behind steep increases in HDPE and linear low-density polyethylene (LLDPE). LDPE sellers are seeking offers at $1900/tonne CFR China for July. Offers to India and South East Asia are at $1950/tonne CFR and higher. LDPE supplies are expected to tighten due to plant outages at Sinopec Maoming’s cracker and troubles at Nippon Unicar’s LDPE unit in Japan. A Taiwanese LLDPE producer said it has lifted its prices by $100/tonne, with offers for spot LLDPE at $1820 to $1830/tonne CFR.

In acrylonitrile butadiene styrene (ABS), gains in feedstocks ACN and SM, pushed Asian ABS prices sharply higher, with CFR Asia prices at $2150/tonne, and July contracts at $2200/tonne CFR. In related plant news, Formosa Chemical and Fibre Corp. of Taiwan shut down its ABS plant in Ningbo due to a fire at its storage tank. Repairs are expected to take between two weeks to two months.

Strength in crude and naphtha coupled with rising terephthalic acid (PTA) and mono ethylene glycol (MEG) pushed bottle-grade PET prices in Asia higher, reaching $1510 to $1520/tonne FOB Korea.

In European news, Borealis declared force majeure on PE supplies from its Austrian plant in Schwechat. That facility has a production capacity of 350,000 tonnes/yr and manufactures LLDPE and HDPE grades. A reactor at the plant caused the production issue, and the unit is expected to remain offstream for one week. The company had no inventories, necessitating the force majeure.

Butane-grade LLDPE contract prices were assessed at euro 1315/tonne FD North West Europe, with spot prices at euro 1255/tonne FD North West Europe. Prices of LLDPE in the U.S. are also up with export offers pegged at $0.75/lb FOB Houston levels, up $0.06/lb.

Polystyrene (PS) contract prices were higher, with general-purpose polystyrene (GPPS) at euro 1435/tonne FD North West Europe and high-impact polystyrene (HIPS) contract prices at euro 1485/tonne FD North West Europe. In the spot market, GPPS was at euro 1160/tonne FD North West Europe, and HIPS rose to euro 1200/tonne FD North West Europe.

PP contract prices in Europe were flat at euro 1195/tonne FD North West Europe and euro 1250/tonne FD North West Europe. In the spot markets, PP homopolymer prices rose to euro 1110/tonne FD North West Europe with copolymer prices at euro 1160/tonne FD north West Europe.

ABS general purpose and natural-grade contract prices in Europe rose sharply to euro 1780/tonne FD North West Europe. According to Polymerupdate, strength in Asian ABS prices has nullified the threat of overseas competition and rising energy prices are also helping support higher ABS prices in the European region. In July, prices are expected to continue to rise with some ABS producers targeting hikes between euro 100 to euro 150/tonne. In the spot markets, FD North West Europe contract prices for general purpose and natural grade ABS were seen at euro 1535/tonne FD North West Europe.

PVC suspension grade prices are flat at euro 1020/tonne FD North West Europe, but some sellers are seeking hikes of between euro 40 to euro 50/tonne to make up for lost margins. Some offers at $1300/tonne FD North West Europe have been heard.

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