25 April 2013 16:48 [Source: ICIS news]
LONDON (ICIS)--Business is on hold in the European high density polyethylene (HDPE) pipe resin market as participants await the May contract price settlement for feedstock ethylene, sources said on Thursday.
“The market is on hold, people are waiting,” a buyer said.
With the ethylene contract price expected to fall, HDPE pipe prices are also expected to decrease in May.
Poor demand and an oversupply also add to the downward pressure.
“There’s poor demand, an oversupply, customers are not looking for purchases. People are waiting for the monomer price settlement,” a distributor said.
A second buyer said: “Everyone is waiting, demand is not good.”
Ideas differ slightly regarding the extent of any HDPE pipe resin price decrease.
The second buyer said producers are likely to resist the downward pressure as they had to significantly lower their April offers by around €60-80/tonne ($78-104/tonne).
Nevertheless, the the first buyer maintained that it expects a decrease of more than €50/tonne from April levels.
“A €50/tonne decrease is not enough. The market should go down at least €70-80/tonne. There are plenty of supplies, demand is not good. The price decrease should match the monomer decrease,” the first buyer added.
Producers were unavailable for comment regarding expectations for May HDPE pipe resin prices.
Nevertheless, the outlook for the market remains bleak.
A second distributor said: “[There’s] Weak demand, lower cost and high inventories all make the HDPE picture almost hopeless for the near-to-medium term future.”
($1 = €0.77)
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