PE market sees high Q2 settlement at €1,038/t

20 March 2008 11:32  [Source: ICIS news]

LONDON (ICIS news)--The new second-quarter ethylene settlement, up €15/tonne ($23/tonne) at €1,038/tonne from the first quarter, is higher than many polyethylene (PE) players had expected, they said on Thursday.

“This is not at all good for PE,” said one major producer. “It means that we will be very firm when discussing March PE at the end of the month, however.”

Some lower deals had already been done at a reduction, albeit small, for March, and while linear low density PE (LLDPE) in particular was still firm, other grades were suffering from competition from imports and flat demand.

“This is bad news for PE,” said another PE producer. “It’s true that there is no money in the cracker any more, but it will be very difficult to pass this on to the PE market.”

One producer had already hinted that it would be asking for higher prices in April, but mainly as a means of avoiding further erosion in the European PE market.

Europe was becoming a target for importers as dollar-based sellers eyed healthy euro prices.

PE producers in Europe include INEOS Polyolefins, LyondellBasell, Borealis, SABIC, Polimeri Europa, Repsol and Dow.

($1 = €0.64)

For more on PE visit ICIS chemical intelligence

By: Linda Naylor
+44 20 8652 3214

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