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LyondellBasell’s North American PE margins be pressured by supplier outages

February 21/2011

(ICIS) -- LyondellBasell’s North American polyethylene (PE) margins have continued to be pressured by supplier outages and rising feedstock costs, its chief executive said on Friday.

Speaking on an earnings conference call, CEO Jim Gallogly said the recent fire at Enterprise Products’s natural gas liquids (NGL) plant in Mont Belvieu, Texas, had caused the near-term US market to be “quite volatile”.

In particular, US ethane and ethylene prices jumped almost immediately, while PE increases were still being negotiated, Gallogly said.

Producers were citing tight industry supply and the rising raw material costs as their rationale for PE increases, he said.

For LyondellBasell, supply was further tightened following the fire when it had to reduce rates and eventually shut down its 789,000 tonne/year La Porte cracker in Texas.

But the company said Friday that it planned to restart the cracker over the weekend, likely loosening supply.

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