20 July 2011 11:13 [Source: ICIS news]
LONDON (ICIS)--Growing availability in the European metallocene linear low density polyethylene (MLLDPE) market has weighed heavily on July’s contract prices, forcing values to dip by €50–60/tonne ($70–85/tonne), market participants said on Wednesday.
Import pressure and a growing disparity between spot and contract values left producers with little choice but to offer reductions at a minimum of €50/tonne, according to several sources.
This left July C8 blown film grade MLLDPE contract prices at €1,500–1,550/tonne FD (free delivered) NWE (northwest Europe) on a gross basis, according to ICIS. Many market players felt the reductions could be on a higher level by the end of the month, with at least one buyer saying that it was looking to achieve the full upstream ethylene decrease of €95/tonne, or even a three-digit reduction.
“We have plenty of options, and there is no immediate need to buy,” the buyer noted.
Indeed, one producer conceded that the specialist nature of the product did not provide much of a shield against the downtrend, as MLLDPE exports from ?xml:namespace>
This was echoed by a trader, who added: “Korean sellers are offering very low prices in regions like
As such, material earmarked for export has been pushed back into the already-lengthening domestic market.
Exports into Europe are also available at levels of €1,330/tonne FCA (free carrier), according to several traders, with C8 blown film grade MLLDPE offered to consumers at around €1,400/tonne FD on a net spot basis.
However, European sellers were optimistic that the recent upswing in Asian buying interest in the wider polyethylene (PE) market would extend to MLLDPE, which would bring an end to these competitive offers. One trader said: “Asian offers are already beginning to dry up.”
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