PE sentiment remains bullish on reduced imports, higher ethylene
A distributor in Germany reported that his West European supplier is talking about increases of €60/ton on February PE prices, although he finds such increases too much. The seller noted, “Market fundamentals will play an important role in determining the increase amount.”
A South European producer revealed February contract offers €35/ton higher from last month, commenting, “The ethylene contract price hit the highest level since August 2015. The market is balanced with quiet demand and sufficient supplies to meet buyers’ orders. Moreover, import materials are running low.”
A reseller from Switzerland commented, “Iranian suppliers prefer to export to the other global markets such as Asia rather than Europe as they can get better netbacks.”
Demand is expected to pick up in February as some market participants claim that converters’ inventories are not high due to the destocking activities in the last quarter of 2016, which is likely to provide an upper hand to the producers. Plus, buyers were limiting their purchases to their regular needs for some time.
An Italian converter reported to have adopted a strict policy in limiting their purchases recently, citing their slow end demand as the main reason. “We preferred to use our existing stocks in January as our customers were not interested in paying January hikes,” added the buyer.
A buyer from the Netherlands reported, “One of our suppliers had already closed monthly order books for LLDPE in the second week of January and supply is expected to be tight in February. Our supplier is planning to seek considerable increases on LLDPE.”
In Italy, PE prices are at €1270-1340/ton for LDPE, at €1180-1230/ton for LLDPE and at €1210-1300/ton for HDPE film and b/m, FD, 60 days. In Northwest Europe, PE prices are at €1270-1350/ton for LDPE, at €1180-1250/ton for LLDPE, at €1220-1300/ton for HDPE film and b/m and at €1200-1300/ton for HDPE inj., FD, 60 days.
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