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June hints at renewed drops in European PP, PE markets

  • 19/05/2017 (13:55)
Players in the European polyolefin markets have been wrapping up their May business with decreases of €20-50/ton. This is because sluggish demand and comfortable availability forced regional suppliers to trim their PP and PE offers despite the flat monomer settlements for the month. Expectations are now calling for further decreases for June, which keeps activity dampened for the remained of the month across the region.

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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