Upward trend in LDPE could revise on excess feedstock situation

20-Jul-10
Robust demand amid tight supplies has led to an uptrend in low density polyethylene (LDPE) prices. This could change due to a situation of excess feedstocks. Because of a surplus of natural gas, especially in North America, low-density polyethylene (LDPE) feedstock ethylene is becoming less expensive, making it difficult for producers to justify price increases, as per ICIS. US LDPE prices climbed from 59.5 cents/lb (US$1312/ton) to 80 cents/lb from October 2009 to early April, where they held until late May- then held in the mid-70s cents/lb range. The price increases were strictly supply driven, and producer margins expanded to record levels. A producer has announced an additional price increase of 4 cents/lb for LDPE resins, effective August 1, based primarily on the continuing tight supply dynamics. As per CMAI, LDPE cash costs are expected to decline again in July; and if supply recovers more quickly than anticipated and costs stay low, an adjustment could be seen. That will put LDPE prices back on par with the price adjustments that have occurred with linear low-density polyethylene [LLDPE] and high-density polyethylene [HDPE] resins. CMAI estimates that LPDE supplies in North America may remain tight through Q3 and possibly into Q4, with the situation getting aggravated with any unanticipated outages. In Europe, INEOS of the UK and LyondellBasell have declared force majeure on LDPE, but CMAI expects most of the remaining outages to be resolved during July and August, with any sales control programs likely be phased out soon thereafter. The outages have contributed to the current tight supply scenario. Supply is tight according to Nexant, because of strong overseas demand, with steady exports. Regarding exports from the US, ICIS assesses that LDPE availability is tight, with only small volumes traded. Latin American buyers are receiving offers from Asia and the Middle East. In Europe, LDPE prices seem to be increasing €10-20/ton in spot and domestic prices because of a tightening European market, caused by various production glitches in the region since the end of June. But lower ethylene prices in Europe will keep LDPE prices from increasing too much there, and the July price increase is not expected to reach the €40-50/ton price that producers are looking for. ICIS assessed that LDPE price increases would probably not surpass €30/ton.
  More News  Post Your Comment
{{comment.Name}} made a post.
{{comment.DateTimeStampDisplay}}

{{comment.Comments}}

COMMENTS

0

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
Milacron 450 ton electric injection molding machine

Milacron 450 ton electric injection molding machine