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Discounts on PP, PE deals fail to boost demand in Europe

by ChemOrbis Editorial Team -
  • 15/05/2017 (15:02)
In Europe, deals are being concluded with decreases both in the PP and PE markets despite the stable outcome of the monomer contracts. Although trading activities have slightly rebounded compared to April as buyers have returned to the market after limiting or skipping their purchases last month, purchasing has remained on a needs only basis. Sellers have had to concede to discounts as buyers were resisting to rollovers; however, demand has remained restricted in the face of buyers’ cautious stance.

A West European producer summarized the current situation in the PP market by saying, “Traders in the spot market are offering lower prices and this puts a cap on sales as buyers expect further discounts and postpone their purchases.”

Slow end product business in many fields was cited as another factor causing slower sales. A compounder reported, “The reason why we are purchasing on a hand to mouth basis is that our end business is not performing well and it has nothing to do with prices. Plus, we are confident that PP prices will post small decreases during the month as sellers hold high stocks.”

A German distributor concluded some deals after having lowered his prices by €20-30/ton for Central European PP, adding, “Demand is not regular and we are doing back to back business.”

As for PE, similar factors lead to slower sales. A producer reported, “We reduced our spot PE prices due to the aggressive offers from traders. The downtrend continues to hinder sales as buyers are refraining from purchasing in hopes for seeing new decreases.”

Many sources concur that the sentiment is not likely to shift in the near term amidst lengthening ethylene and propylene supplies in line with the return of crackers from maintenance shutdowns, which is causing weekly declines in costs.

In Italy, local PP prices are reported at €1170-1280/ton for homo PP and at €1230-1330/ton for PPBC inj., while in Northwest Europe, prices are quoted at €1200-1300/ton for homo PP and at €1270-1370/ton for PPBC inj., all on local terms.

As for PE, prices are at €1300-1350/ton for LDPE, at €1200-1280/ton for LLDPE, at €1200-1260/ton for HDPE film and b/m and at €1190-1260/ton for HDPE inj. FD Italy, 60 days. In Northwest Europe, PE prices stand at €1320-1380/ton for LDPE, at €1220-1300/ton for LLDPE, at €1200-1280/ton for HDPE film and b/m and at €1220-1270/ton for HDPE inj. FD NWE, 60 days.
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