17 January 2013 23:59 [Source: ICIS news]
LONDON (ICIS)--European January high density polyethylene (HDPE) pipe resin prices for monthly business have increased by €30-40/tonne ($40-53/tonne), producers and converters said on Thursday.
January prices are assessed at €1,510–1,570/tonne FD (free delivered) NWE (northwest Europe) for HDPE 100 and HDPE 80 pipe grades.
The January price hike is driven by a marginal improvement in demand from December to January, as buyers - with inventory levels low due to year-end working capital concerns in December - returned to restock.
Producers acknowledged that initial targets of €50-100/tonne for January monthly business had to be brought down, to accommodate lower-than-expected restocking activity,= and a rollover in the January feedstock ethylene contract price.
The present price increase is seen by most buyers as more reasonable, with many saying that the rise in demand has not yet proven to be sufficient to warrant an increase of more than €50/tonne.
A buyer said producers had been attempting to push prices higher as their margins were squeezed in the fourth quarter by a steady decrease in HDPE pipe resin prices.
In the fourth quarter, prices for monthly business for both grades decreased by €30/tonne in October and by €50/tonne in November, before dropping by €10-20/tonne in December.
In the wider polyethylene (PE) markets, prices are being settled higher in January, but demand is suffering and lower naphtha prices, coupled with a weaker dollar, have led to a slowdown in the momentum that has been building since December.
($1 = €0.75)
Additional reporting by Linda Naylor
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