LDPE posts further drops despite tightness in Europe

Despite pockets of tightness in the market for certain grades, PE prices saw additional discounts this week in Europe. €50/ton drops that were initially sought for LDPE disappeared this week and most PE grades saw decreases of up to €100/ton. Larger decreases of up to €150/ton were also valid for certain grades.



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

As can be seen from the ChemOrbis Product Snapshot above, LDPE prices in Italy posted smaller decreases of around 8% so far this month. Similarly, in Northwest Europe, LDPE prices indicate a smaller drop of 9% compared to other PE grades.

Producers are not willing to trim their offers further for April, pointing to the boosted orders from certain sectors including food packaging and medical applications. A few regional producers have even reported that they closed their order books for LDPE amid better demand versus tighter supplies.

Meanwhile, May expectations have emerged on a stable note so far, which prompted some converters to secure extra cargos despite upstream volatility. Spot ethylene prices dropped by around €55/ton in the past two weeks, according to ChemOrbis Price Wizard.

Nevertheless, players do not expect drastic changes in PE prices going forward amid hopes for gradual lifting of some lockdown measures across Europe and multi-year low PE prices. Plus, they are wary of a possible reduction in feedstock availability as a result of lower operating rates at refineries.

Packagers commented, “We may purchase some material in the latter part of the month as PE prices seem to be nearing their bottom levels.”