Uzbek polyolefins producer is set for maintenance in October
As a joint venture between Lotte Chemical (50%), Korea Gas Company (25%) and the state-run Uzbek oil company Uzbekneftegaz National Holding Co. (UNG) (25%), “UZ-KOR” produces natural gas as well as 390,000 tons/year of HDPE and 80,000 tons/year of PP at the complex which started commercial production by January 2016.
Meanwhile, it was not confirmed whether the producer will shut both PP and PE lines at the time of press, although a player said, “We think they will be down for both.” According to ChemOrbis Import Statistics, Uzbekistan ranked as Turkey’s fourth largest supplier of HDPE during the January-July period following Saudi Arabia, South Korea and Iran.
Early this week, an agent of the Uzbek producer reported to ChemOrbis that the producer built some PE stocks ahead of the maintenance shutdown in order not to aggrieve its customers. However, the producer will not be supplying material to Turkey this month as they preferred to allocate their stocks to other markets where they can achieve better netbacks compared to Turkey. Thus, Uzbek supplies are projected to diminish over the medium term apart from the recent shutdown.
“The Uzbek supplier has been unwilling to sell large amounts to Turkey during recent months after providing very competitive prices, particularly for HDPE film and blow moulding, during the previous months. The supplier started to focus on other export destinations such as East and South Europe, Africa and Southeast Asia. We expect them to continue to sell their materials to those markets from their existing stocks during the shutdown,” a distributor stated.
A Turkish PE converter opined on the development saying, “We heard that the shutdown will start on October 1st. Only two traders will be able to bring HDPE grades for this origin in October with no spot sales being likely. Only contract based transactions will proceed. The rumor is that less than 1000 tons will be arriving to Turkey in the period. Now that Uzbek HDPE film and blow moulding supplies will be reduced in the next few months it may keep the market flat for those products.”
A trader who brings Uzbek PP and PE materials to Turkey does not expect to receive any fresh offers from the supplier until November in the best scenario. “The shutdown may counterbalance discouraging trade activity in Turkey as some Middle Eastern polyolefins sources have already claimed limited quotas to Turkey for October,” he opined.
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