European LDPE under pressure from lower ethylene, weak fundamentals
Accordingly, both European and non-European LDPE were offered with rollovers to decreases of up to €20-30/ton from June.
A packaging converter in Italy concluded some LDPE film deals with two South European suppliers, noting, “We made some small purchases for July with rollovers or decreases of €20/ton when compared to last month. Demand remains muted in our end product market.”
A distributor in France, however, refused to lower his LDPE offers and said, “We are offering with rollovers for all PE grades. Despite the lower ethylene settlement, we expect prices to remain stable throughout the month as buyers will need to buy in order to be covered for September, when they come back from holidays.”
Exceptionally, LLDPE and HDPE offers have remained stable so far this week, with the latter product being tight owing to reduced import quotas from the Middle East as well as regional production hiccups. Ineos started to run its HDPE plant in Lavera at lower rates as of June 26 given a cracker shutdown while Total declared a force majeure on HDPE supply from its plant in Gonfreville, France upon complications during a restart process.
A reseller from Switzerland confirmed, “Supply is tight for HDPE and MDPE grades whereas overall demand is not deemed that brilliant.”
A packager also reported, “Our demand has slightly picked up due to the increasing number of end orders ahead of the summer lull, although it is still not as sturdy as it was during the same period of last year.”
There is no appetite to build high stocks, many participants argued. PE buyers are not in a hurry to buy as they do not expect to see major changes in the near term. LDPE in particular might see some further reductions given comfortable availability ahead of summer holidays.
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