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LDPE markets face supply tightness in major importing countries

by ChemOrbis Editorial Team -
  • 29/08/2016 (11:41)
Players operating in major importing countries such as China, Turkey and Egypt report that they have been facing supply tightness for LDPE over the last few weeks. Several reasons are being cited behind lower LDPE stocks while it is widely concurred that availability issues for LDPE partly stem from the fact that the majority of new capacities built in recent years are mostly for HDPE and LLDPE products.

According to players in China, PE supplies have been tight, particularly for LDPE, in recent weeks due to several plant shutdowns for the upcoming G-20 Summit which is slated to be held in Hangzhou province on September 4-5. The Chinese government ordered several petrochemical producers to shut their plants for around two weeks in order to reduce pollution ahead of the Summit.

A trader operating in Beijing commented, “Overseas suppliers are reluctant to sell to China nowadays due to relatively lower prices compared to other regions. This caused reduced supply levels for LLDPE and particularly for LDPE.”

According to market talk in Turkey, LDPE supplies from the domestic producer Petkim have been reduced since around early August although players are not sure of the reason. A trader noted, “We are only able to sell LDPE grades for the time being due to limited supplies for this product. Demand for LLDPE and HDPE remains disappointing.”

A second Turkey-based trader stated that LDPE supply is short and they faced delays in their LDPE deliveries from the Middle East. According to him, these delivery delays might be another reason lying behind the LDPE tightness although it may not be widespread. “Supply constraints create a firm sentiment for LDPE grades which, we think, is likely to remain supported by low stock levels in the coming term,” the trader opined.

Meanwhile, players operating in Egypt’s PE markets have also been highlighting the reduced availability for LDPE grades for the last few weeks. Several players commented that LDPE supplies are tightening in the country as import activities are seriously hindered by the ongoing dollar crisis. For their urgent needs, buyers turn to the distribution market where locally held LDPE offers carry a premium over LLDPE and HDPE grades. A trader stated, “This is due to the fact that the two domestic producers, SIDPEC and ETHYDCO, are supplying the market with their sufficient HDPE and LLDPE production.”
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