Dow Europe targets €100/tonne hike for August polyethylene

01 August 2013 16:12  [Source: ICIS news]

LONDON (ICIS)--Dow Europe has announced a €100/tonne ($133/tonne) increase for all its polyethylene (PE) grades in August – a higher target than most other European PE producers, sources said on Thursday.

Dow posted its pricing intention for August on its website, saying that the €100/tonne increase would be implemented across Europe, the Middle East and Africa effective 1 August, or as contract terms allowed.

Other PE producers were still considering their position in some cases, and the level of price hike sought depended largely on the PE grade in question.

Sellers were confident of achieving more than the €40/tonne increase of the upstream August ethylene contract in the low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) sectors.

In the high density polyethylene (HDPE) sector, some sellers acknowledged it might be hard to push much more than the monomer rise on to the market.

One HDPE seller was targeting a €90/tonne rise, however.

HDPE buyers were not convinced that producers would be able to force through even the whole of the €40/tonne monomer increase.

One producer disagreed strongly with this sentiment, however, saying: “Monomer is the absolute minimum we will accept.”

Another producer was aiming to get a €20/tonne hike above the €40/tonne monomer increase.

Several buyers said they had been offered increases of €40-60/tonne already for the month of August, but few had settled business so far.

The exact amount of increase that might be accepted in the PE market in August in Europe – and there are few buyers which expect to be able to buy at a rollover, particularly in the LDPE and LLDPE markets – depends on the level of demand this month.

LDPE and LLDPE have started the month strongly, with HDPE less so.

LDPE is now trading as high as €1,360/tonne FD (free delivered) NWE (northwest Europe) in some cases, on a net basis.

LLDPE C4 (butene based) has jumped above the €1,300/tonne FD NWE barrier.

($1 = €0.75)

By: Linda Naylor
+44 20 8652 3214

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