06 June 2013 16:35 [Source: ICIS news]
LONDON (ICIS)--Producers of European high density polyethylene (HDPE) pipe resin are targeting increases of up to €70/tonne from May in order to recoup margins, but many buyers are resisting, sources said on Thursday.
“We aimed to increase [June prices by] €70/tonne [from May], so far we achieved [an increase of] €40/tonne,” a producer said. “It’s to repair margins, we've been suffering for the last couple of months.”
Last week producers spoke of HDPE pipe resin prices having fallen to a greater extent than feedstock costs during recent months, and of the need to recoup margins
Some argue that with stocks low throughout the chain, market conditions now favour producers as buyers need to purchase.
“Demand is picking up,” the producer said. “It's now in favour of producers. After the long winter April had the first good signs [of demand]. May was good and demand is continuing.”
The source added that demand in the first week of June is 10-20% better than during the first week of May.
However, with the June ethylene contract price having increased by €5/tonne from May, many HDPE pipe resin buyers are resisting steep price increases, feeling they are not justified.
Further arguing against steep price hikes, some participants disagree that buyers are eager to purchase.
A distributor said: “Attempts [to increase prices] were much higher than reality. This week we have to say a plus of maybe €20/tonne is what we can realise. Customers are relaxed and [there are] not many who really have to buy, but demand slightly improved.”
Discussions are ongoing.
($1 = €0.76)
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