Polyethylene markets a year ago today

At the end of 2009, crude oil was near US$80/bbl and naphtha was near US$720/ton in Asia and at US$690/ton in Europe. Rising costs in December 2009 were leading to a bullish start in January 2010. As per Chemorbis, similar trends are seen in the PE market today as they were seen a year ago. In the Chinese market, coming off the back of rising crude oil and naphtha prices, PE price hikes were announced for both local and import offers for January 2010. Inside China, CNPC and Sinopec issued increases in the first week of 2010 of US$15-117/ton. In the import market, after initial January offers saw modest increases of US$10-20/ton compared to December, several producers made further price hikes of US$40-60/ton once the new year began. In January 2010, LDPE film import offers were at US$1400-1510/ton CFR China, cash. Import HDPE film offers shot up to US$1260-1360/ton and LLDPE film offers to US$1330-1450/ton CFR China, cash. In Southeast Asia, local and import PE prices were pushed even higher than originally anticipated on the back of the strong upward movement in China. Sellers felt emboldened to seek more ambitious price hike targets and several regional producers either announced January offers or had given sell ideas with price increases of US$70-110/ton. On the low end of the import ranges, however, could be found more competitive prices from new Middle Eastern capacities. Southeast Asian producers also made significant increases on their local prices ranging from US$40-114/ton. Offers in January 2010 were at US$1430-1500/ton for LDPE film, at US$1220-1360/ton for HDPE film and at US$1260-1450/ton for LLDPE c4 film all on CIF SEA, cash equivalent basis. In Italy, European producers announced increases of €100-120/ton for January PE agreements a year ago. This followed €30/ton increases on the January 2010 ethylene contracts which settled at €870/ton FD NWE. Ethylene contracts had been pushed higher by rising naphtha costs in December. Despite slow local demand because of the season, there was support for the rising trend from the global markets. Spot LDPE film prices in the local market were at €1040-1080/ton, HDPE film and blow moulding at €1050-1080/ton and LLDPE c4 film at €1060-1070/ton all on FD NWE, 60/90 days deferred payment basis. In Turkey, suppliers came with increases of US$30-40/ton on their January 2010 import offers. The low end of the local market was pushed higher by the rising momentum and within a week the domestic producer, Petkim had issued a price hike of US$30/ton on their LDPE prices. Similar to the Southeast Asian market, players reported receiving offers from new Middle Eastern LLDPE capacities. A year ago, non-European LDPE film was at $1420/ton, HDPE film was at US$1275-1330/ton and LLDPE c4 film at US$1260-1295/ton all on CFR Turkey equivalent basis, subject to 3% duty, cash. In Egypt, Middle Eastern producers revealed their January 2010 PE offers with increases of US$10-70/ton. European sell ideas came with increases of US$90-100/ton. Within the week, the local producer SIDPEC had also raised its PE prices by US$45-54/ton in line with the higher import market. Middle Eastern LDPE film offers last January were at US$1333-1402/ton, HDPE film was at US$1265-1315/ton and LLDPE c4 film at US$1245-1325/ton on all on CIF Alexandria, cash equivalent basis.