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LDPE, PP prices hit all-time highs in Europe

by Manolya Tufan -
  • 08/03/2021 (04:05)
European producers sought hikes in March deals well beyond the monthly monomer upsurge on the back of a combination of intensifying tightness and robust demand. March marked the fifth straight month of hikes, while the pace of gains accelerated. All in all, PP and LDPE markets hit all-time highs.

European PP, PE breach 2015 levels

PP and PE prices touched new highs after sizeable March gains, breaching back then all-time high 2015 levels.

According to ChemOrbis Price Index data, the weekly averages of LDPE, PPBC and PPH inj. prices in Italy and Northwest Europe hit all-time highs. Data also revealed that LLDPE and HDPE prices hit their highest levels since July 2015.

PP absorbs larger hikes

Whilst the market was naively expecting increases of around €200-250/ton early last week, the magnitude of initial PP hikes caught players by surprise. PP deals were closed with hikes of around €300-350/ton due to an acute shortage. Meanwhile, PPH inj. prices are under a more visible pressure compared to copolymers on the back of tighter availability.

As can be seen from the Product Snapshot obtained from ChemOrbis below, local PP ranges jumped by around 24% for PPH inj. and 20% for PPBC inj. compared to the last week of February.

*Right click the image and open in a new tab to view the full-sized snapshot.

FD Italy/NWE– Local PPH, PPBC – Prices

LDPE posted monthly hikes of €250/ton to rank as the second strongest product, while LLDPE and HDPE saw hikes of around €200/ton.

PE ranges rose almost 15% for HDPE and LLDPE while the spike was even larger for LDPE at 17% when compared to the previous week.

*Right click the image and open in a new tab to view the full-sized snapshot.

FD Italy/NWE– Local LDPE, LLDPE, HDPE – Prices

Supplies shrink further on US polar storm, TARs

Regional stocks dried up amid strong exports to the higher netback regions, a lack of imports, unexpected plant outages and robust demand. Allocations were also reduced to stock for TARs.

Several players affirmed that March appears to be the most challenging month of the Q1. Tightness was exacerbated by severely impaired production along the US Gulf that curbed exports into Europe. The restart process started at some plants, while it might take some more time for production to return to previous levels due to safety checks and trial runs.

Prices are likely to add to their gains as tightness shows no signs of abating for the near term, bearing regional maintenance shutdowns and an ongoing lack of imports in mind.

Supply falls short of demand

Pent-up demand amid a series of backlog orders and protracted recovery in the packaging applications have supported demand for quite a while. Moreover, buying interest in the automotive and building sectors has been vivid.

Although the month is far from over, many suppliers reported to have quickly sold out their quotas amid deteriorating supply crunch and short coverings. A distributor reported that he received only 20% of his regular quotas.

Manufacturers, who see robust end demand, may have to take their lines offline and cancel orders due to an acute shortage of material. Meanwhile, others mull over lowering rates to alleviate the pressure of sharp increases.
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