Divergent factors bring about mixed views for PE in West Europe
A distributor in France concluded some May deals with increases of between €30-50/ton at €1400-1410/ton for LDPE film and at €1400/ton for LLDPE c4 film, HDPE film and blow moulding on an FD, 60 days deferred payment basis. The distributor commented that demand is weak.
Another distributor in the Netherlands sold locally-held Brazilian and US LLDPE at €1300/ton for May on an FD basis. “We received some LDPE offers from Turkey, but didn’t accept them because they weren’t competitive. Many buyers are anticipating decreases for June PE prices, but we think that rollovers are more likely,” he stated. In Germany, a distributor concluded some May PE deals with rollovers to increases of €10-20/ton from last month. For June, the distributor expects ethylene contracts to register increases of €20-30/ton, but thinks that PE prices might be rolled over from May.
A buyer in Switzerland was offered locally-held Saudi Arabian LLDPE c4 film at €1330/ton FD, 60 days. This offer is suggesting a decrease of €10/ton compared to last week, but the buyer is negotiating to obtain further discounts.
Some May deals were concluded at competitive levels in the import market this week. For LLDPE film, US and Brazilian cargoes for prompt delivery were dealt at €1250/ton DDP, including 6.5% customs duty if applicable, 60 days. US HDPE blow moulding was sold at €1285/ton with the same terms.
Players are at odds about the June outlook given contradicting factors. Spot ethylene prices are suggesting a decrease of over €45/ton compared to the beginning of the month due to ample supply. However, crude oil prices are firm and spot naphtha prices are standing above early May levels despite softening slightly over the past week. Therefore, slight increases are deemed to be possible for the awaited ethylene contracts, but players are skeptical as to whether or not any possible increases in costs could be reflected to PE prices unless demand is supportive. Even though the availability of competitively-priced PE cargoes was perceived as a sign of weakness by some players, expectations are calling for a mostly stable trend for now.
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