08 December 2011 23:59 [Source: ICIS news]
LONDON (ICIS)--European polyethylene (PE) pipe-grade resin prices have slipped €15/tonne ($20/tonne) in December, sources said on Thursday.
Although sellers had begun the month looking to maintain prices at their November levels in a bid to recoup some margin, citing lower inventory positions, the majority have been forced to pass the full upstream ethylene reduction of €15/tonne through to consumers.
However, at least one producer is adamant that it will not offer reductions in December as it is under no pressure to move material, adding that decreases will not stimulate additional demand before the end of the year, which is typically a slow season for pipe offtake.
“Our margins are a disaster. We have to recover losses, and demand in December is not bad considering that we were not expecting a strong month,” the source explained. “We will hold firm at our November prices. We will not budge.”
For most, however, arguments of poor margin did little to stave off reductions, as consumers pushed hard to receive the full ethylene reduction.
A major buyer acknowledged: “I am a little shocked. It's surprising that it went down in December really. There was no need to reduce.”
($1 = €0.75)
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