Feb PE deals concluded higher in Europe, sellers eye further hikes
A buyer in Germany reported, “Official contract offers we receive for February indicate larger increases than that of ethylene. We plan to buy some additional quotas on bullish outlook.”
An Italian converter reported to have concluded some deals with €40-50/ton increases in the spot market given the bullish outlook and reducing supply levels.
According to many market participants, the bullish trend in the PE market will extend into April on the back of imminent high season for many PE applications. Players believe that sellers will have an upper hand on the back of higher feedstock costs and expectations of better demand over the medium term.
A distributor from Switzerland reported that he started to offer with €40/ton hikes on LDPE, adding, “Supply is tight even if demand is not that brilliant. Our suppliers may target further hikes later in the month.”
An Italian distributor reported that he could manage to conclude sales with €20-60/ton hikes for non-European origins. The seller reported, “We expect supply to tighten further in the following weeks and prices will continue to move upwards until April. Furthermore, the high season for PE is expected to support sellers in seeking increases combined with the support from the cost side.”
A West European producer reported that they are officially seeking larger hikes than that of ethylene in the contract market, particularly for LLDPE, which is becoming shorter. “We are currently offering LLDPE up €80/ton from last month while we applied slightly smaller hikes for HDPE and LDPE. Demand is expected to improve in the next weeks in line with the approaching high season for many PE applications. However, we expect to settle February prices with an increase of €50/ton in the end. The trend, meanwhile, is likely to remain bullish until April on better demand and tighter supply. Our supply is regular and sufficient for the moment,” added the producer source.
In Italy, PE ranges stand at €1300-1400/ton for LDPE, at €1220-1300/ton for LLDPE and at €1240-1320/ton for HDPE film and b/m. In Northwest Europe, local spot ranges stand at €1320-1400/ton for LDPE, at €1240-1300/ton for LLDPE and at €1250-1350/ton for HDPE film and b/m.
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