19 April 2013 17:19 [Source: ICIS news]
LONDON (ICIS)--Metallocene linear low density polyethylene (MLLDPE) monthly prices for April are settling down in line with the €60/tonne ($78/tonne) drop in the April ethylene contract price, but spot levels are largely seen as stable, sources said on Friday.
Sources put this down to production cutbacks on all polyethylene (PE) grades because demand has not improved.
“Spot prices haven’t changed much after the big drop at the beginning of the month,” said a trader. MLLDPE spot prices are trading in a band of €1,350-1,400/tonne FD (free delivered) NWE (northwest Europe) according to most buyers, with South Korean offers lower.
Uptake of new offers from South Korea has dwindled, however, because buyers are reluctant to take material in a falling market.
Lower naphtha prices have led to expectations of a hefty price drop in the May ethylene contract, with many sources now expecting a three-digit drop. Buyers will push for any decrease in the upstream contract to be transferred directly to PE pricing.
MLLDPE is used in the packaging sector and its properties, which enable stronger film to be made using less material, assure its growth for the future. Its pricing is closely linked to the wider PE market and in particular the linear low density polyethylene (LLDPE) sector.
($1 = €0.77)
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