23 February 2012 12:40 [Source: ICIS news]
Correction: In the ICIS news story headlined “Europe PE pipe prices rise 14% from Dec to record-high levels” dated 23 February 2012, please read in the fifth paragraph … driven by a €99/tonne February feedstock European ethylene contract price increase … instead of … January feedstock … A corrected story follows.
LONDON (ICIS)--European high density polyethylene (HDPE) 100 pipe-grade resin prices have reached the highest levels on record since ICIS started tracking the speciality PE grade in late 2009, according to buyers and sellers on Thursday.
Prices have moved up by 14% from €1,285/tonne ($1,691/tonne) FD (free delivered) NWE (northwest Europe) in December to €1,470/tonne FD NWE in February on high feedstock costs and tighter supply.
The previous high was at €1,455/tonne in May, 2011, according to ICIS.
HDPE 80 pipe-grade resin prices have increased to €1,460/tonne FD NWE in February. The highest price on record for the grade is in May, 2011 at €1,470/tonne FD NWE.
Both grades have increased by €125-135/tonne this month, driven by a €99/tonne February feedstock European ethylene contract price increase.
Producers had been targeting increases of €150/tonne for February, reiterating the need to recoup the full ethylene movement, as well as a surplus that would help improve poor margins.
Market players argue that producers are in a better position to push prices increases through in 2012 as the market is better-balanced compared with last year. PE pipe production has been reduced at several sites in Europe, in line with the slow demand in the region.
Prices had been mostly on a downward trajectory in the second half of last year from previous highs in May 2011, registering increases only in January this year.
The upward trajectory is expected to continue into March, if the ethylene contract price for the month goes up.
The higher prices have meant that some buyers are purchasing at lower volumes. Demand for PE pipe from the downstream construction sector in western Europe has been hit by the eurozone debt crisis, sources said.
($1 = €0.76)
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