Middle East boosts LLDPE and HDPE exports

The Middle East has become a global player in the supply market for linear low density polyethylene (LLDPE) and high-density polyethylene (HDPE). The region's exports of LLDPE reached over 500,000 tonnes during the first quarter of 2012, up 8% from the same period in the previous year. About half of the shipments went to Asia Pacific. Growth in other export markets such as in Eastern Europe was particularly high at 27% whilst that to Latin America rose 85%. Middle East exports of LDPE grew 12%, to over 550,000 tonnes, of which 13% increase to Asia-Pacific and a 120% rise on smaller volumes to Africa were noted.

The same trend was also seen in the Middle East's HDPE exports which increased to over 1 million tonnes in the same quarter, an increase of 24% compared to the same period in 2011. Strong gains were noted in the Asia Pacific which recorded 26% increase in sales, whilst other major markets are Eastern Europe which posted 38% gain. Western Europe and Latin America also recorded 11% growth in shipment. Saudi Arabia, Qatar, United Arab Emirates (UAE) and Iran shipped higher volumes. For Iran alone, exports were up by as much as 19% with China, Turkey and Belgium as its major buyers.

Capacity increases
The global market for both LLDPE and HDPE is expected to see rising supply to meet surge in demand. Start-up of new projects and capacity expansion of existing facilities are anticipated as major petrochemical and chemical companies invest in the production of these two raw materials. Saudi Polymers is reportedly expected to begin shipment of on-spec HDPE film and blow moulding grades from its complex in Al-Jubail, Saudi Arabia this month. The company has a cracker that can produce 1.165m tonnes/year of ethylene; two 550,000 tonne/year HDPE lines; a 400,000 tonne/year of polypropylene (PP) plant; a 200,000 tonne/year of polystyrene (PS) unit, and; a 100,000 tonne/year 1-hexene plant at the site in Al Jubail. Saudi Polymers is 65%-owned by Saudi Arabia's National Petrochemical (Petrochem), with the remaining 35% held by Chevron Phillips Petrochemical (ACP) – a subsidiary of Chevron Phillips Chemical (CPChem).

Another plant is Saudi Kayan with its 300,000 tpa LDPE plant. Saudi Kayan is a venture of Saudi Basic Industries Corporation (Sabic) and Al Kayan Petrochemical. Sabic holds 35% of the company, 30% for Al Kayan and the rest is publicly owned. Qatar Petrochemical Company (QAPCO) is expected to launch a 300,000 tpa LDPE facility at Mesaieed Industrial City near Doha in Qatar. QAPCO is a majority-owned subsidiary of Qatar Petroleum (QP) established in 1974. The new plant makes use of natural gas feedstock obtained from the Ras Laffan Industrial complex (the QAPCO ethylene expansion project) and other sources. The company produces LDPE raw material and exports the product worldwide to over 74 countries, in the Middle East, Asia, Australia and Africa.