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Lower ethylene hints at new decreases for PE in Italy

by ChemOrbis Editorial Team -
  • 29/01/2015 (17:27)
January PE deals are being wrapped up with decreases from €100/ton to €130/ton in Italy. Players are now waiting to see the new February prices after the monthly ethylene contracts settled down €70/ton from January at €810/ton FD NWE.

The lower ethylene settlements have confirmed expectations of a decreasing PE trend for a fourth consecutive month in February. However, the anticipated reductions will be smaller compared to the three-digit drops recorded this month. Spot PE prices for late January are stable on the week to be quoted at €1060-1160/ton for LDPE, at €1100-1180/ton for LLDPE and at €1050-1170/ton for HDPE FD Italy, 60 days.

A distributor sold West European LDPE with additional decreases of €30-40/ton on top of his initial discounts of €100/ton due to stagnant demand. According to him, the downward trend might persist through March before stabilizing in April. Another distributor concluded some January PE deals with decreases of up to €130/ton from last month. The distributor expects buyers to build some stocks in February when PE prices might reach the bottom ahead of a possible stabilization.

Most buyers continued to limit their purchases to a needs only basis in January given the anticipated decreases for the upcoming month, while some of them agreed that availability is short for HDPE in the spot market, especially for film grade.

A packaging producer bought limited volumes of West and Central European PE with decreases of €110-130/ton for January. The buyer stated that he is planning to wait until the second half of February before committing to additional purchases. Another converter reported that he expects to see lower prices in February and that the PE market might track a stable to softer trend in March. According to the buyer, supply could tighten in the upcoming weeks given the prevailing downward trend.
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