19 January 2011 14:25 [Source: ICIS news]
LONDON (ICIS)--Dow intends to increase its European polyethylene (PE) prices by €90/tonne in February, with INEOS estimating targeting an increase of around €70/tonne, company sources said on Wednesday.
“We will increase [PE] prices by €30/tonne over whatever happens to ethylene,” said an INEOS company source.
The February ethylene monomer contract was expected to increase but a very wide price range was mooted by market sources. Some PE producers expected the monomer contract to rise by €30/tonne, while others talked of hikes close to €100/tonne.
The January contract rose by €105/tonne, to €1,110/tonne FD (free delivered) NWE (northwest ?xml:namespace>
January PE prices have risen in line with the ethylene contract, with some producers managing to also add some extra margin.
“We have paid minimum increases of €110/tonne on all our PE in January,” said one PE buyer.
Low density PE (LDPE) has increased by a minimum of €105/tonne, with some sellers reporting a rise of €120-130/tonne on top of December levels. Net levels were reported at €1,400-1,450/tonne FD NWE.
Buyers said ExxonMobil was offering increases of €150/tonne on a take-it-or-leave-it basis. This was not confirmed by the company itself.
PE availability was such that buyers would probably have to grin and bear it again in February.
“February will be another done deal, and all this talk of the Chinese economy cooling is ridiculous,” said one of the producers.
A large buyer agreed.
“At the moment we don’t have much choice but to accept. It’s at least easier getting big increases back than little ones, but it takes time, a couple of months at least.”
PE prices were now close to their record high in 2008, when net LDPE prices peaked at €1,500-1,530/tonne FD NWE. If producers got their way, February LDPE levels would not fall far short of this record high.
PE is used in packaging, household goods and agricultural sectors.
($1 = €0.75)
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