INEOS declares force majeure on LLDPE - supply tightness leads to concerns from buyers

INEOS’s has declared force majeure on linear low density polyethylene (LLDPE) from its Grangemouth, UK, site. The 320,000 tpa LLDPE plant is expected to be down for three weeks, alongside INEOS’s KG cracker that is being brought down this week because of a defect in its steam system, as per ICIS. This is leading to concerns over availability of certain grades next month. “We are already on [C6 (hexene based) LLDPE] allocation,” said one buyer. “C4 [butene based] LLDPE is very tight, for blown film anyway.” The LLDPE market in Europe has been tightening throughout 2014 since import duties from major importers in GCC countries rose from 3% to 6.5%. Initially there was no impact from lower imports, as extra volumes brought over at the end of 2013 to avoid higher duties, took time to be absorbed. As the year has progressed, however, C4 LLDPE availability has tightened. Europe is estimated to import around 90% of its C4 LLDPE needs, according to several sources, so fewer imports have had the greatest impact in this field. September import data continued to show a heavy fall of volume. C4 [LLDPE] is the only PE [polyethylene] I will make sure I have in stock,” said another buyer, who was keen to avoid any stock build at the end of the year. Some converters have substituted shortfall of C4 LLDPE with C6, but C6 LLDPE has also been tightening, and the latest INEOS news could make things worse, said the buyer as per ICIS. “We have fairly heavy stocks of polymer,” said the first buyer, “but it seems to be for the wrong grade.” Exports and increasing tightness in other PE grades have also led to stronger demand than expected in Europe in recent weeks, as other grades have been substituted for C4 LLDPE and producers have kept a close eye on working capital as the end of the year approaches. Some players have begun to talk of the possibility of a price rise in January, given tightness in some PE grades. There has been no indication so far of such a move from most players however, but the idea is hovering over the market. Activity in PE has slowed down for November as players wait for the new ethylene contract to emerge for December. November PE prices have not fallen quite in line with the November ethylene contract, and producers have managed to hold on to some margin this month.
  More News  Post Your Comment
{{comment.Name}} made a post.




There are no comments to display. Be the first one to comment!


Name Required.


Email Id Required.

Email Id Not Valid.


Mobile Required.

Email ID and Mobile Number are kept private and will not be shown publicly.

Message Required.

Click to Change image  Refresh Captcha