15 March 2013 09:23 [Source: ICB]
"Buyers are buying smaller quantities more frequently," said a trader. "Rather than taking 200 tonne lots, they are buying 50-100/tonnes at a time and waiting."
"Underlying demand remains weak," said a producer, "but sales are coming in day by day and March is no worse than we expected so far."
"March demand is better than February," said another PE producer, "but the benchmark is not a challenging one."
Demand has surprised many sellers by being so weak for many months, but production has been cut back and there is no big supply overhang in Europe at present.
Imports are also not widely available in most PE and PP grades, particularly with the weaker euro.
Success in the PP sector is looking more likely than in PE.
"I am expecting a €20-30/tonne increase in PP for March," said one buyer, "but I'm holding out on PE for the time being."
Upstream tightness in the propylene sector has meant PP is not at all long, whereas PE is more available. Sellers are hopeful April demand will bounce back after several months of disappointing volumes, and spot prices for both PE and PP have risen in March.
"I hope April will be better, as May is a short month in many European countries," said the trader.
In spite of the caution exercised by most of the market, there is no expectation of a price drop in coming weeks.
LDPE is at €1,320-1,350/tonne FD (free delivered) NWE, and homopolymer PP injection at €1,230-1,260/tonne FD NWE. Both have risen slightly in March. Monthly discussions continue.
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