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Firming PE trend attracts more imports to Europe

  • 10/05/2016 (03:46)
In Europe, PE prices registered a new round of increases across the local markets in May on the back of higher ethylene contracts. More import flow has been observed over the past week and these offers are forming an attractive option amidst the consecutive increases posted by local prices.

A West European producer is giving offers for their May PE contracts with increases of €50/ton from last month. A producer source commented, “Demand isn’t strong so far while our supply is short particularly for LDPE. We still need some time to replenish our stocks following a maintenance shutdown. Regarding our spot allocation, we are supplying only to our regular customers. Therefore, we are seeking to achieve slightly larger increases than the €40/ton ethylene hike.”

Another West European producer applied increases of €60/ton on their May PE contracts. A source from the producer considered the market to be balanced, commenting that they expect to register satisfactory sales even though demand might be slower with respect to last month.

Despite hike requests on the producers’ side, competitive offers are present in Italy’s distribution market. A few buyers reported purchasing European HDPE blow moulding from the spot market at more or less stable levels from April after negotiating last week. This week, a converter bought Central European and locally-held Iranian LDPE at levels below the €1400/ton threshold on an FD basis. “We managed to procure only limited volumes. Supply is short for LDPE while there are no availability concerns for LLDPE. Our margins are poor due to the current high PE prices,” he commented.

Some distributors in Germany and the Netherlands started giving May PE offers with increases of €50-60/ton for West European origins last week. One of the sellers reported that availability is short from his supplier, especially for film products, and another seller said his supply is still short, particularly for HDPE, due to a maintenance shutdown at his supplier’s plant. This week, a distributor in Switzerland reported offering West European LDPE film and HDPE blow moulding with increases of €40/ton from last month and stated that he has adequate stocks to meet the requirements of his customers.

New May prices showed up for import PE across Europe, offering a competitive edge following the May hikes in the local markets. The most recent US HDPE film and blow moulding offers to West Europe were quoted at around €30-50/ton below the lowest spot price in the local market for these products. In Italy, Iranian HDPE film offers are standing €20-30/ton below the most competitive spot HDPE film price for local cargoes.
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