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Jan PE deals wrapped higher in Europe, February signals further firming

  • 16/01/2017 (04:10)
In Europe, January PE deals are being concluded with increases reaching up to the €45/ton hike in the ethylene contracts. Some regional sellers’ attempts for larger gains of around €60/ton, however, met with buyers’ resistance.

A distributor reported that they are aiming for €70/ton January hikes given their West European supplier’s guidelines, commenting, “We are struggling to conclude deals at current levels due to weak demand, so we plan to push our supplier to revise down their offers.” A distributor offering mostly with hikes matching the ethylene increase for different European origins stated, “Buying interest is very low; but we hope to see an improvement in the upcoming days.”

“Despite limited demand, market sentiment remains strong amid further firming expectations for February,” stated a few players who commented on the near term outlook, with their expectations centering mostly on a new round of increases on the back of the upcoming cracker maintenance season.

According to ChemOrbis Production News, several crackers in Europe are set to undergo maintenance shutdowns in the February-May period. Dow Chemical is planning to shut its cracker in the Netherlands at the start of February. The cracker is slated to remain offline until April 15. France’s Total is also planning to conduct a maintenance shutdown at its Antwerp cracker from March to May. Sabic’s naphtha cracker in the Netherlands is slated to be shut for maintenance in March while ExxonMobil is also set to conduct maintenance at its cracker in Gravenchon in the March-April period.

You can visit ChemOrbis PE Production News in order to track capacity changes around the world at a glance and keep on top of new capacity additions.

Firm expectations for February are also supported by strong naphtha prices which broke above the $500/ton threshold last week for the first time since June 2015. CIF NWE based spot naphtha prices are currently $25-30/ton higher when compared to their end-December levels. Meanwhile, the spot ethylene market is also firming up PE sentiment, with spot prices on an FD NWE basis gaining around €20/ton since January started.
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