Dow Europe targets €80/t increase for January PE

17 December 2008 11:54  [Source: ICIS news]

LONDON (ICIS news)--Dow Europe intends to raise its polyethylene (PE) prices in January by €80/tonne ($111/tonne) in an effort to restore margins, a company source confirmed on Wednesday.

“Margin restoration is very necessary to ensure continued production and supply,” said the source.

SABIC had already made an announcement to increase January low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) prices by €50/tonne next month.

The move came as PE price decreases finally began to slow after plunging by as much as €400/tonne in November.

LDPE spot prices lifted slightly in mid-December, as levels below €600/tonne FD (free delivered) NWE (northwest Europe) were no longer offered. Production was cut back to avoid oversupply.

In general, the market remained morose, in spite of a slowdown of the pace of the price decreases.

It was not clear if all producers would be seeking price increases in January.

The market was still mulling over Tuesday’s settlement of the monthly January ethylene contract of €520/tonne FD NWE, a record drop of €600/tonne from the fourth-quarter level of €1,120/tonne FD NWE.

Several PE producers said they still expected to be settling ethylene on a quarterly basis, but this was still under discussion.

PE producers in Europe include Saudi Basic Industries Corp (SABIC), ExxonMobil, LyondellBasell, Borealis, Total Petrochemicals, INEOS Polyolefins, Dow, Polimeri Europa and Repsol.

($1 = €0.72)

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By: Linda Naylor
+44 20 8652 3214

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