17 May 2010 13:17 [Source: ICIS news]
By Linda Naylor
LONDON (ICIS news)--European polyethylene (PE) buyers are faced with yet more price rises in May - the fifth consecutive month - particularly for low density PE (LDPE) and linear low density PE (LLDPE) grades, market sources said on Monday.
“We are getting increases in May, and we will almost certainly see more increases next month,” said one LDPE seller. “Product is very tight.”
A major producer said: “We are selling everything we can make,” adding that LDPE was "very strong".
A buyer who settles LDPE business on a retroactive basis said: “I will wait until the last day [of May] before I settle, but at the moment it looks like more than €20/tonne ($25/tonne) higher than April,” .
Inventories along the chain were very low. Buyers had been buying on a hand-to-mouth basis for several months as they expected new capacities to affect pricing globally, but European producers had also been controlling production carefully. Any production hiccups were affecting supply, such as the outage of LyondellBasell’s 320,000 tonne/year LDPE plant in ?xml:namespace>
Demand for LDPE had rallied in the second quarter of 2010 after a poor start to the year, and growth was now showing a positive tendency compared to last year.
PE output had been cut back for many months in 2009 and early 2010 due to poor demand in difficult economic circumstances and in anticipation of new capacities coming on stream in the Middle East and
LDPE was in particularly short supply due to permanent closures at LyondellBasell sites in the
The status of the
LLDPE was also tight elsewhere in
In mid-May, LDPE net prices were trading around €1,250/tonne FD (free delivered) NWE (northwest
“We have done the first LDPE sales for June,” said one major PE producer, “at €20-30/tonne more than in May.”
Dow closed its order books for May LDPE and LLDPE last week, due to strong demand and tight availability.
Higher ethylene prices were leading PE producers to expect a higher monomer contract price for June, after the rollover in the May contract price, at €960/tonne FD NWE.
“May ethylene was stable, and we are paying increases. Oil is falling and
Product availability was tight, however, and the local supply/demand situation in
Even high density PE (HDPE) prices were showing no signs of weakness, as producers had managed to export volumes and switch to LLDPE production in some cases. Imported material was not offered in sufficiently significant volumes to affect pricing from European producers, sources agreed.
Market sources generally expected PE pricing to be affected by imported product from new capacities in Asia and the
PE producers in
($1 = €0.81)
To discuss issues facing the chemical industry go to ICIS connect
For more on polyethylene visit ICIS chemical intelligence
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections