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Non-European origins offer competitive edge in European PE, PET, PS markets

by ChemOrbis Editorial Team -
  • 17/10/2017 (09:57)
In Europe, non-European offers have recently surfaced well below the local ranges in the PE, PET and PS markets, which is exerting a downward pressure on local levels. These three markets are already under pressure from slowing demand as buyers usually avoid keeping high stocks towards the year end in the midst of the lack of availability concerns.

In the PE market, European sellers’ initial hike targets were trimmed down by €10-20/ton to €20-30/ton due to balanced supply-demand factors. Lackluster demand was reported to be in line with comfortable supplies. The abundance of competitive import offers is also weighing down on the sentiment, which has been contributing to the expectations of a stable to softer trend in November, according to many players.

Iranian LDPE was freshly dealt on DDP basis including all applicable costs, standing €50/ton below the low end for European LDPE range while an LLDPE deal stood €30/ton below the local market.

PET buyers, meanwhile, have sufficient stocks thanks to their broad replenishment activities when prices were rising in line with the global upturn and regional supply issues. Although some sellers initially approached the market with rollovers, they conceded to some discounts on fading demand in line with the season.

PET feedstocks in Asia turned softer earlier than in Europe, which kicked off a turndown in China’s PET market. Accordingly, import offers for Korean and Chinese material are €50/ton below the European offers when all applicable costs are added.

A buyer decided to purchase from the import market due to their competitive levels. He added, “Demand was good up until September, but it’s now slowing down. Even though the outlook is unclear for Europe, we anticipate decreases as Chinese PET prices are decreasing.”

As for PS, various import offers also prevail in the market at competitive levels while supplies are reportedly abundant. Non-European HIPS prices are prominently competitive compared to the local offers as they stand €60-70/ton below the low end of the local ranges after all applicable costs are included.

A buyer in Italy who paid decreases of around €90-100/ton in his October PS deals argued, “More offers are available this month and we receive more calls from sellers. It is evident that they are under stock pressure.” The existence of import cargoes at competitive prices are adding to the comfortable state of availability for PS.

The European PS market has witnessed a trend shift just in October while early expectations already suggest that downtrend will be extended into November considering the spot styrene’s losses, thin demand and comfortable availability for PS.

However, some buyers are hesitant to engage in import purchases considering bearish expectations and the long transit time. A food packager in Italy said, “We are currently evaluating import prices only for our December purchases as the PS outlook is already bearish.”
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