June hints at renewed drops in European PP, PE markets
A distributor in Germany said, “Despite our competitive PP prices, buying interest remains very low. We believe that new propylene contracts will be concluded lower considering falling spot prices.” An agent of a West European producer said that although his supplier tried to be adamant at its offers, discounts have been inevitable during May given lack of healthy demand.
In some parts of the region, meanwhile, more significant decreases passed on a few deals, as a PP seller in the Netherlands confirmed, “We conceded to €70/ton drops in an attempt to attract some buying interest. Our supply is normal and demand is silent.”
In spite of the recent crude rebound, spot ethylene and propylene prices in Europe recorded drops of €20/ton on FD NWE basis over the week. When a comparison is made from the beginning of May, they plunged by around €85-95/ton on average with the same terms. This was due to the ease in olefin supplies along with the recent cracker restarts at Dow Chemical, Total and INEOS.
Accordingly, several players expressed their projections that new propylene and ethylene contracts may settle €20-40/ton lower for the coming month.
Consequently, PP and PE buyers are widely adopting a wait-see stance given the widespread expectations for further decreases in June across Europe.
A packager in Italy who purchased only HDPE film in May said, “We regretted concluding this deal since we were able to receive a lower price a few days later. We plan to run down our LDPE and LLDPE stocks until the latter part of next month.”
PE sellers across the region are also trying to deplete their stocks nowadays due to the fresh decreases expected in June.
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