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European PE markets remain a target for import origins

  • 30/05/2016 (03:46)
In Europe, competitively priced import PE offers continue to be reported across the regional markets this week. The firming trend in Europe has provided a favorable outlet for non-European PE suppliers who struggle to achieve profitable sales in other global markets such as China, Southeast Asia and Turkey in the face of the current bearish outlook in these regions.

Spot PE prices for local origins reportedly witnessed slight reductions over the past week following the emergence of competitive offers for non-European origins, including Iranian, Middle Eastern, Asian, Turkish and US material. However, according to regional players, Europe may sustain a steady PE outlook in June on the back of bullish energy costs coupled with the force majeure declarations by Total and INEOS.

Market sources reported that Total extended a force majeure on deliveries from all of its polymer sites in France due to the strikes at France’s oil refineries. The company is able to produce 250,000 tons/year of HDPE and 160,000 tons/year of LDPE in Gonfreville. INEOS also declared a force majeure on HDPE output from its petrochemical production site in Lavera, France given the same reason. The company’s Lavera HDPE plant has a production capacity of 300,000 tons/year.

Meanwhile, June ethylene contracts were fully settled €25/ton higher when compared to May, which might also have a bullish effect on the market next month.

In Italy, a distributor who concluded some deals for Middle Eastern HDPE film reported that they are selling mostly non-European origins nowadays as their West European supplier’s prices remain quite high. He commented, “The European PE markets receive support from firmer crude oil costs. Hence, we believe that no major changes will be witnessed in the market in June.” A second distributor noted, “Supplies are sufficient at the moment, however the ongoing strikes at French refineries are affecting our supplier’s PE output.”

A distributor in Switzerland stated, “PE availability may face some restrictions in June as the strikes in France are causing delays in deliveries. Hence, we may see more import materials heading to Europe in the coming month.” Meanwhile, a Swiss buyer reported receiving an offer for locally-held Saudi Arabian LLDPE film with a decrease of €10/ton from last month. “We are negotiating with the seller in order to obtain further discounts,” he said.
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