March polymer offers to GCC rise by US$30-60/ton

26-Feb-10

Tight supply and high monomer prices have pushed up March offers for polymer to the Gulf Cooperation Council (GCC) by US$30-60/ton (upto 4%) as per ICIS. This follows a US$130-250/ton hike in February. The persistent increase in polymer prices in the past few months could compel converters to reduce operating rates as it seems unlikely that they will be able to pass the high raw material costs. Though several new capacities have come on stream in the GCC in the past few months, feedstock shortages, a human resource crunch, overstretched utilities and technical glitches have kept operating rates at the new plants low. Propylene and ethylene costs in Asia and Europe have been persistently high amid persistently low availability accompanied by high crude oil prices that have supported downstream price hikes. Last Friday, ethylene prices in Asia stood at US$1290/ton CFR NE Asia- up US$240/ton in two months; while propylene has risen by US$75/ton to US1125/ton CFR NE Asia. Polypropylene (PP) production has the most badly impacted. Supply has been restricted as Oman Polypropylene shut down its Sohar PP unit this month for a two-month turnaround, while Advanced Petrochemical Co plans to shut its 450,000 tpa PP plant on 11 March for a three week turnaround. Al Waha Petrochemical has recently restarted its Al Jubail PP plant early this week after a prolonged outage. High density/linear low density polyethylene (HDPE/LLDPE) and PP offers have been raised from February levels to US$1380-1400/ton delivered (DEL) GCC and US$1320-1340/ton DEL GCC respectively. Offers for general purpose polystyrene (GPPS) and high impact PS (HIPS) have been hiked by US$60/ton to US$1540/ton DEL GCC and $1640/ton DEL GCC, while polyvinyl chloride (PVC) offers have seen a US$30/ton increase to US$1100/ton DEL GCC.