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Europe’s PP, PE markets puzzled by higher monomer contracts for Dec

by Manolya Tufan - mtufan@chemorbis.com
  • 05/12/2019 (11:45)
Market players across the region were puzzled by the slightly higher propylene and ethylene settlements for December. This has defied earlier expectations calling for a mostly softer trend amid low buying appetite from downstream buyers as well as weaker spot markets. Higher naphtha costs outshined in determining the outcome of monthly monomer contracts.

Stable to slightly firmer December offers both for PP and PE came as a surprise to many players, considering the shortness of the month and weak market conditions. PE prices are under the pressure of long supplies despite higher ethylene settlement, a reseller reported.

“We started offering PE with €10/ton hikes but we are open to negotiate. If demand does not show an uptick, we will concede to rollovers. Buyers keep waiting as they want to enter new year with low stocks. When it comes to PP, we are offering with rollovers amid subdued demand and ample supplies,” a trader remarked.

According to some, the €10/ton higher ethylene settlement can prevent prices from posting further declines rather than helping them go up. “The overall market conditions are too weak to support any hikes,” said a distributor.

Whether or not suppliers will concede to discounts will hinge on the stock pressure, although some sellers appear determined to preserve margins. A seller opined, “We think that PE producers will issue rollovers to €10/ton hikes in the contract markets. Slight decreases may be seen in the spot and import markets, meanwhile.”
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