02 May 2013 16:22 [Source: ICIS news]
LONDON (ICIS)--May prices for high density polyethylene (HDPE) pipe resin are expected to fall following last week's settlement of the May ethylene contract price at a decrease of €100/tonne ($132/tonne) from April, sources said on Thursday.
However, the extent of any decrease remains to be seen as producers’ targets differ from buyers’.
At least some producers aim to limit decreases, arguing that customers' inventories are low as there has been little buying during recent weeks. Furthermore, business traditionally improves in May and June.
A producer said “I haven't concluded any deals yet, but will not give the monomer decrease. It’s difficult to say how much it [prices] will decrease. There will be discussions, but it is hovering around a €60-70/tonne decrease.”
However, HDPE pipe buyers are seeking a decrease at least matching the ethylene price drop, citing poor demand.
A buyer said: “European suppliers are willing to give €20/tonne less than the monomer decrease. But buyers are not happy with that because of poor demand. I will push for more. We will see when I have face to face negotiations with the supplier. It [the decrease] could be €100/tone or €120/tonne. They gave more away the last couple of months. Everyone will try it.”
“My personal opinon is that we should get the full momoner decrease,” a second buyer said. “Demand isn't available. Theres's not a lot of business projects going on.”
The source added that it has completed half of its negotiations, and has acheived a €100/tonne decrease.
A third buyer said: “€60-70/tonne [decrease] is not reasonable. I would like to see a minimum €80/tonne decrease.”
Because of public holidays in much of Europe, negotiations are only just beginning for many participants. A clearer picture of pricing should emerge in the next week or two.
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