June PE outlook under discussion in Europe
According to the weekly average data from ChemOrbis Price Wizard, spot ethylene prices in Europe posted cumulative decreases of around €60/ton since late April while ICE Brent crude has recently hit $78/ton, the highest level since 2014.
Some market participants foresee a firmer outlook in June, attributing their expectations to the crude oil and naphtha gains and to the low levels that LDPE and LLDPE prices have reached, as was previously mentioned in detail in ChemOrbis Plastics News European players question if bottom is near for LDPE, LLDPE .
Bullish expectations might convince buyers to replenish their stocks in the coming days as they were sticking to their immediate needs amid ample supplies and weak demand, some sellers argued. They also pointed to the shrinking import volumes now that the euro depreciated against the US dollar, which pushed import suppliers to focus on higher netbacks elsewhere.
A packager from the Netherlands admitted, “We are evaluating whether to buy extra volumes towards the end of the month or not ahead of possible increases for next month.”
Another packager from Italy projected that PE prices will not go down in June as producers will try to maintain their prices. “Even some increases might be achieved as prices have already hit multi-year lows,” he said.
According to some, meanwhile, June outlook is still foggy as spot ethylene prices have defied stronger energy costs so far. They think that lower spot ethylene prices might keep the size of the expected hikes limited especially if demand remains weak. Some producers were claimed to be exporting their products to other global markets.
On a side note, global PE markets are readying to welcome new capacities from the US in the second half of this year, which also weighs down on the sentiment. A distributor opined, “We expect prices to remain mainly stable in the following months considering a possible supply surplus due to the new capacities from the US.”
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