Price rise in Europe PE pipe sharpest since March 2011

19 January 2012 16:35  [Source: ICIS news]

LONDON (ICIS)--European polyethylene (PE) pipe-grade resin prices have increased by €60/tonne in January – the largest rise since March 2011, buyers and sellers said on Thursday.

Prices have moved up to €1,295–1,345/tonne ($1,660–1,724/tonne) FD (free delivered) NWE (northwest Europe) for high density PE (HDPE) 100 pipe-grade resin.

The increases have been driven by a €40/tonne January feedstock European ethylene contract price increase, as well as upward pressure exerted by a better-balanced market in the new year.

Supply in the European market has improved after a couple of major producers engaged in aggressive selling in the fourth quarter, while others cut back on production because of squeezed margins.

The weakening of the euro against the US dollar has left the door wide open for exports, while ensuring that the import window is firmly closed, putting further pressure on supply.

Demand, meanwhile, has improved because of restocking, as year-end destocking in December had left customers with poor inventory levels.

Buyers have been further motivated to speed up purchases by the possibility of an even bigger increase in February PE pipe resin offers, as ethylene producers are looking for higher-priced deals for the month, compared with January.

The relatively warm winter that has ensured the continuation of construction using PE pipes has also propped up sentiment among both buyers and sellers.

One major PE pipe producer said that this additional pressure could see buyers agreeing to bigger hikes in February.

($1 = 0.78)

For more on PE and HDPE visit ICIS chemical intelligence

By: Cuckoo James
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