Europe Dow targets €70/tonne increase on Dec PE

18 November 2010 18:54  [Source: ICIS news]

LONDON (ICIS)--Dow Chemical intends to increase its Europe polyethylene (PE) prices by €70/tonne ($95/tonne) in December because of the rise in production costs, a company source said on Thursday.

Dow is on order stop since last Monday 15 November, due to the very good demand,” said the source.

Crude oil and naphtha prices had been rising steadily and were calculated by one player to have risen by €70/tonne in euro terms in recent weeks.

PE buyers had been under strong pressure to accept increases in October, but it was not yet confirmed whether the full €28/tonne increase in the monthly ethylene monomer contract would be passed on to buyers.

Low density PE was now trading around €1,300/tonne FD (free delivered) NWE (northwest Europe) on the spot market, and availability was tight. Other grades were considered to be less tight and converters resisted increases as they considered producers’ margins to be good enough.

Several converters were targeting decreases for December, but they were not hopeful of gaining much ground.

“If I can get €30/tonne [less] in December I will consider that a real achievement,” said one buyer.

($1 = €0.74)

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By: Linda Naylor
+44 20 8652 3214

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