20 November 2009 12:28 [Source: ICIS news]
(Recasts, clarifying 12th paragraph)
LONDON (ICIS news)--European polyethylene (PE) demand has picked up as some buyers return to the market to replenish low stocks amid continued buying from China and fewer expectations of a much lower price in December, source said on Friday.
“We have had our best sales month of the year in November,” said one major PE producer, who said it had supplemented mediocre European sales with export volumes.
Spot sales also increased in volume significantly during the second half of November, a phenomenon which has not occurred over the past few months, when buying was principally done early in the month.
“We have had bumper sales over the past few days,” said a trader. “The rot seems to have stopped.”
Naphtha reached $700/tonne (€469/tonne) CIF (cost insurance freight) on 18 November, its highest level for over a year. Brent crude oil hovered around $80/bbl.
Several selling sources said they felt that PE prices could increase if buyers suspected that availability could be compromised due to strong export sales and continued production cutbacks.
Low density PE (LDPE) net prices in November were reported at €920-950/tonne FD (free delivered) NWE (northwest ?xml:namespace>
One European producer reported sales of non-commodity grades closer to $1,400/tonne CFR China.
“I can see a situation where the European market reacts like
“When [European buyers] come back to the market, they might find that there isn’t enough material for them to buy,” said the European producer.
Despite these sentiments, few sources expected Dow Chemical’s €30/tonne PE increase, announced earlier in the week, to be successful in December.
“This is just a move to stop prices going down again,” said a large buyer.
“There doesn’t seem to be that much material around for December, though,” he added. “We haven’t been offered much material from the new capacities yet.”
Middle Eastern PE capacities were slow to export significant quantities of PE to
“The new plants in the
PE producers in
($1 = €0.67)
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