21 December 2007 12:02 [Source: ICIS news]
LONDON (ICIS news)--Europe December polyethylene (PE) has been settling early at a rollover as spot prices moved markedly higher due to buyers building up stocks, market sources said on Friday.
Settlements were seen particularly for traditionally retroactive accounts such as low density PE (LDPE) and linear low density PE (LLDPE).
Expectations of a higher ethylene contract had already impacted on spot PE business even before the settlement of first-quarter C2 at €1,023/tonne ($1,461/tonne) FD (free delivered) NWE (northwest Europe), up €78/tonne from the fourth quarter.
PE buyers sought to replenish low stocks ahead of almost certain price hikes in January.
This week saw spot prices higher than the December monthly settlements for both LDPE and LLDPE.
December LDPE rolled over at €1,285/tonne FD NWE and €1,200-1,240/tonne FD NWE for C4 LLDPE on a gross basis. Net spot levels were trading at similar levels.
While discounts are generally not disclosed, monthly prices are discounted based largely on volume, whereas spot prices are traded with no rebates.
PE producers announced price increases for January business, seeking to raise prices by €80-120/tonne, depending on the producer in question.
One LDPE buyer reported on Friday that it had been obliged to settled its January business already with at least one supplier, an unusual situation in the market. The converter reported paying an increase of €70/tonne for January deliveries.
“I simply had no choice. My regular supplier said he would refuse to supply me if I did not settle now,” a source at the company said.
($1 = €0.70)
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