31 July 2013 12:52 [Source: ICIS news]
LONDON (ICIS)--Polyethylene (PE) producers are looking for €40-70/tonne ($53-93/tonne) increases in August, following the €40/tonne increase in the August monthly ethylene contract, several buyers said on Wednesday.
“Sales people have told me they’re looking to cover the [ethylene] increase,” said one buyer.
Another said it had been told by its suppliers that they would be looking for “C2 [ethylene increase] plus €20-30/tonne,” for August PE business.
Several suppliers were still considering their position, with one looking at increases of three digits. However, buyers expected targets of €80-100/tonne to be revised downwards now that the upstream ethylene contract had settled at €1,210/tonne FD (free delivered) NWE (northwest Europe), up by €40/tonne from its July level.
Buyers were in two minds over August, with high density polyethylene (HDPE) converters not expecting to pay much of an increase as they saw no shortages.
“I will buy nothing in August,” said one large buyer.
Low density polyethylene (LDPE) availability has been tight, however, and some planned and unplanned production outages are expected to keep the market tight, in spite of holidays throughout Europe.
“Unfortunately I have to buy in August,” said a large LDPE buyer, “but I will try to buy as little as possible.”
Linear low density polyethylene (LLDPE) buyers were also expected to be under pressure to pay more, as most LLDPE grades, including metallocene linear low density polyethylene (MLLDPE), were tight. This was thought to be down to fewer imports, but also tightness in the co-monomer markets, along with earlier reduced output to accommodate the weaker demand of early 2013.
In many cases, July LDPE pricing was still under discussion, at retroactive accounts.
“I have paid a €30/tonne increase on all my LDPE and LLDPE grades,” said one of the buyers.
LDPE was trading above €1,300/tonne FD NWE on a net basis, with speculative sales as high as €1,360/tonne FD NWE as sellers took advantage of the market.
Spot sales were still quiet, and most sources agreed that higher prices and tight availability were largely down to production restrictions rather than any fundamental strength in the markets.
($1 = €0.75)
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