European PE suppliers close Jan order books
Players cited rising costs and expectations for a higher ethylene outcome as reasons behind sellers’ recent policy. Spot ethylene prices widened its premium over the January contract level, which puts an upward pressure on the monthly contract negotiations. Spot prices have recently come down amid projections of easing tightness in Europe following restarts at Ineos and Borealis’ crackers. Nevertheless, spot monomer prices still stand above the monthly contract level of €860/ton. Spot naphtha prices that reached 1-year high recently also support firmer expectations.
Some players expect to see gains of around €50/ton in the next ethylene contract. Expectations for PE call for hikes of up to €80-100/ton, meanwhile.
Apart from higher costs, tightness and strong demand supports firmer February outlook. Rumor has it that PE producers may apply another round of 3-digit hikes for February, pointing to the ongoing container shortage and the lack of early arrival of US PE imports.
Nevertheless, a distributor opined, “We do not think prices can rise by €100/ton in February. PE prices can see hikes of €50/ton.”
The weekly average of spot LDPE prices reached their highest levels since October 2017 in Italy and February 2018 in Northwest Europe, ChemOrbis data showed.
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