14 June 2013 17:23 [Source: ICIS news]
LONDON (ICIS)--European high density polyethylene (HDPE) pipe resin contract prices have increased by €25/tonne ($33/tonne) on average in June, market sources reported late on Thursday.
The ranges for HDPE 80 and HDPE 100 material climbed to €1,405-1,425/tonne free delivered (FD) northwest Europe (NWE).
A wide range of settlements was heard from buyers and sellers, from €5-50/tonne.
“It was a bit of a struggle,” one producer said. “We faced some resistance.”
Upstream ethylene contracts settled up €5/tonne from May, but sellers and buyers said that prices had increased beyond feedstock hikes as a result of better demand in May and June.
They also said that some balancing out of pricing had taken place following decreases which were not as substantial as the reduction in the May ethylene contract. “There has been some evening up of prices,” one source said. “Buyers can’t play hard core all the time.”
Hikes of up to €70/tonne had initially been targeted by producers.
Most sources agreed that demand had improved in May and June, however overall sales levels were still considered disappointing due to a struggling construction sector.
Stocks are relatively low along the chain, but buyers have no problem obtaining material. One source said that operating rates were low and could easily be increased if there was a further upturn in demand.
The outlook for July was mixed. Most sources expected upstream costs to remain relatively stable, but some buyers said that producers might try to increase HDPE pipe resin margins again, seeing it as the final opportunity before the summer holidays began.
One buyer said that if upstream costs did not alter significantly, buyers might push for a reduction to reflect overall demand levels.
($1 = €0.75)
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