07 June 2013 10:03 [Source: ICIS news]
LONDON (ICIS)--Dow Europe is closing its low density polyethylene (LDPE) order book for June as its sales have exceeded available supply, a company source said on Friday.
Polyethylene (PE) availability, and low density polyethylene (LDPE) in particular, tightened considerably in May as demand improved following the €100/tonne ($118/tonne) decrease in the monthly ethylene contract price.
June volumes are proving to be even stronger than May and production remains cut back in what remains an essentially weak market.
“Demand is healthy, but let’s not exaggerate,” said a polymer producer. “Production is still reduced.”
Some PE buyers have been caught unawares in June and acknowledge that they will have to pay higher prices, even though they see no fundamental change to poor market conditions.
Buying activity in June is clearly strong but many warn of a slowdown once converters’ inventories return to a normal working level.
“We are confident of July, because it will be impossible to build a normal stock level before then,” said the producer. “It’s August I am concerned about.”
LDPE spot prices are trading above €1,300/tonne FD (free delivered) NWE (northwest Europe), from a low of €1,150/tonne in early May.
($1 = €0.76)
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