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European demand for polyethylene is weak

October 31/2011

(ICIS) -- Polyethylene (PE) demand in Europe is weak and while cutbacks are being implemented across the board most market sources see little chance of an upturn for the remainder of 2011, several said on Monday.

A series of cutbacks at the cracker and polymer level has been in place for some weeks, but some sources are now questioning whether production really was reduced enough, as supply still outstrips demand, particularly low density polyethylene (LDPE) and linear low density polyethylene (LLDPE).
Crackers are now estimated to be running at 70-80% of capacity, and more cutbacks are planned and being implemented at the PE level.

Dow has cut production at several LDPE sites throughout Europe and reduced output at solution sites. It has also taken the unexpected step of targeting a ?100/tonne ($141/tonne) increase for November PE.

Most PE sources view this as strange, given that earlier announced hikes for October were abandoned within days of being announced, but the company says this move is being supported by heavy cutbacks.

Several producers said they were cutting back output at several sites but are not prepared to give details at present.

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