27 October 2010 21:04 [Source: ICIS news]
DUSSELDORF (ICIS)--Polyethylene (PE) and polypropylene (PP) producers were in buoyant mood as the K Fair, the world’s biggest plastics exhibition, opened its doors in Dusseldorf, Germany, on Wednesday.
“October has been a strong month and November is also beginning to look good,” said one major PP producer at K2010, the international trade fair for the plastics and rubber industry. “Admittedly the strength this year has been due to production constraints rather than strong demand but it’s been a good year.”
“It looks as though the monomers are strong on the back of strong derivative demand,” said a PE producer. “Volumes have been strong and inventories are low.”
Several producers said that they would be looking to increase polyolefins prices in line with Wednesday’s monomer settlements.
One major PP producer would be asking for more than the propylene settlement. “We are looking for plus €30/tonne in November,” it said.
PP prices had slipped by around €20/tonne in monthly October contracts, with net prices trading in the mid-€1,100s/tonne FD (free delivered) NWE (northwest Europe).
“We cannot allow prices to slip again in November,” said one of the PP producers, “but there is little chance of that anyway. Our inventories are low and demand is better than expected, particularly this week”.
Some grades of polyethylene had also eased back, with only low density PE (LDPE) prices remaining firm in October.
“We had expected to be able to get some price reduction in October,” said an LDPE buyer, “but the situation with the French strikes has meant that they are stable.”
LDPE net prices had firmed by €20-30/tonne in some regions as buyers feared that they would not be able to procure all they needed due to transport problems caused by strikes in France.
Buyers agreed that prices were frustratingly strong.
“We have been expecting low prices for almost two years now, but they remain high,” said another buyer.
“Producers seem to argue just as convincingly for a strong market in 2011 as we argue for a weak year,” said yet another.
As time went by, however, imported product was expected to affect European PE and PP pricing, with sources saying it was just a matter of time.
“Imports are growing,” said a PP producer, “and a lot depends on how Chinese demand continues, but we will see some impact in Europe.”
For early November, at any rate, European polymer pricing looked firm. Monthly negotiations would begin in the coming days.
PE producers in Europe include Dow Chemical, INEOS, Borealis, SABIC, LyondellBasell, Repsol, Polimeri Europa and Total Petrochemicals.
($1 = €0.72)
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