Skip to content

Filter Options
Text :
Search Criteria :
Territory/Country :
Product Group/Product :
News Type :
My Favorites:
 

European PE sellers’ efforts for margin recovery stumble, Feb expectations firmer

  • 16/01/2018 (03:57)
In European PE markets, sellers approached the market with hike requests of up to €40/ton for January in an attempt to recover their margins despite the stable outcome of ethylene contracts.

However, buyers were not willing to pay these initial hikes considering the stable outcome of ethylene contracts and balanced market conditions. They were also largely covered as a result of the pre-buying activities in December given the increase expectations for January.

Accordingly, January PE deals have started to be closed with rollovers to slight increases so far. An Italian distributor reported to have sold some cargoes following the extended holidays, adding, “We applied only slight increases, except for LLDPE that was up €30/ton from December. The market is yet to pick up while HDPE supplies are still quite ample. February expectations are calling for further hikes.”

February expectations are firmer given the fact that 3-year-high crude oil prices have pulled naphtha and ethylene prices up. The European PE market is also expected to respond to the upstream gains as well as global firming trend while some sellers believe that prices might increase further starting from the second half of January due to the widespread expectations for an upturn in February.

A reseller in the Netherlands confirmed, “The market is still calm owing to high stocks on the buyers’ side. They have made some safety stocks for the post-holiday period and they are postponing their purchases as long as they can. HDPE prices are under stronger pressure from sufficient supplies in Europe. Prices have remained mostly at December levels; however, we may see increases in Europe before the end of January as PE prices in the Middle East and Far East Asia have already risen by $50-60/ton.”

A distributor in Germany reported to have sold some volumes with rollovers to €10-20/ton increases. He also said, “Demand has improved compared to last year and it is going to improve further with higher naphtha costs as well as Brent futures near the $70/bbl threshold. We expect increases of between €30/ton and €50/ton in the next ethylene contracts. These factors might convince buyers to come back to restock before the end of the month.”
Free Trial