18 February 2010 17:26 [Source: ICIS news]
LONDON (ICIS news)--Polyethylene (PE) producers in Europe are already talking of further price increases for March, without mentioning specific figures, even as some February accounts are still under discussion, sources said on Thursday.
“We will go for an increase in March, in spite of whatever happens to ethylene,” said one major producer.
Low density PE (LDPE) and linear low density PE (LLDPE) were tight, and producers said they expect to implement March increases easily in these sectors.
High density PE (HDPE) was not as firm as LDPE and LLDPE, and the supply/demand balance was less strained.
“It’s true that HDPE is weaker than the others, but we will be going for higher prices across the board,” said another producer. “Specialities should be okay, but commodity grades will be harder.”
PE prices had risen by as much as €100/tonne ($137/tonne) in February, after an earlier increase in January, bringing hikes for the two months at €150-190/tonne, depending on the selling source.
LDPE spot prices were now trading within a wide range, at €1,120-1,200/tonne FD (free delivered) NWE (northwest ?xml:namespace>
Buyers said they were not prepared to talk about March hikes this far ahead of the month, or before the settlement of the March monthly ethylene contract price.
“It’s too early to start talking about March,” said a buyer. “But [producers] can do what they want. We are in the hands of the producers. We are trying to hold firm and are keeping very low stocks.”
Others commented on the difficulty of passing increases on to their own customers.
The March ethylene contract was not expected to see a significant change.
“I expect a rollover to small decrease,” said one of the producers, referring to the new ethylene price for March.
Sources said that producers would find it difficult to achieve higher prices if the feedstock ethylene decreased, but producers were confident.
Traders did not appear to be quite so sure for March business.
“I have sold all my product now and will take great care with future purchases,” said a trader.
An increased level of imported product had been reported in
Sources saw the level of demand in the key
New capacities were coming on stream and, while these were delayed and not expected to be fully operational for some months, market sources expected them to affect the European market.
Any slowing down in Chinese buying would increase the risk of European markets faltering, sources said.
($1 = €0.73)
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