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European polyolefin players gearing up for awaited January hikes

by ChemOrbis Editorial Team - content@chemorbis.com
  • 20/12/2016 (17:20)
Strong ethylene and propylene costs paved the way for firm expectations for January contracts. Some buyers decided to accelerate their purchases to avoid possible increases in January. On the other hand, bullish expectations for January prompted sellers not to pass full monomer drops on to converters.

A distributor from the Netherlands reported limited availability from their supplier for this month and said that another West European producer rejected to give them any availability due to a previous maintenance shutdown. The distributor stated, “Many producers are tight on PP for the time being and they expect propylene to shorten in the next weeks. Therefore, we expect increases both on the propylene contracts and PP prices in January.” The seller added, “We have low stock levels for PE and some of our customer are still ordering material with December delivery despite approaching holidays. We can say that the market witnesses some pre-buying activity as buyers expect increases in January. We also expect some increases on both ethylene and PE prices, yet there are no concrete indications regarding the extent of these increases.”

Similarly, a distributor from Italy affirmed that they received extra orders from buyers who are concerned about increase talks for January. “We accepted orders for January delivery at unchanged prices. For January, we expect PE prices to be mostly rolled over and start to increase as of February-March,” he noted.

A manufacturer who heard firmer expectations for January reported, “We are not sure whether the market will absorb PP increases.”

A reseller from the Netherlands commented, “Ethylene and propylene prices are expected to increase in January, still demand-supply dynamics will play a crucial role in setting the tone of the market.”

In Italy, a distributor reported, “We expect a stable to firmer trend in January, particularly on the back of higher crude oil prices and producers’ intention to boost their margins.”
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