Europe MLLDPE buyers face August increases

12 August 2013 16:51  [Source: ICIS news]

LONDON (ICIS)--Metallocene linear low density polyethylene (MLLDPE) buyers are under the same pressure as buyers in the wider polyethylene (PE) market to accept increases this month, sources said on Monday.

A planned shutdown at ExxonMobil’s French production site in the early part of the fourth quarter, and a planned maintenance shutdown of INEOS’s cracker in Cologne, Germany, in October, are expected to maintain tightness in the MLLDPE sector.

Both companies declined to comment on the outages but buyers said they had been informed of them.

The August ethylene contract rose by €40/tonne ($53/tonne), and buyers have been under pressure to accept at least this €40/tonne rise in their PE and MLLDPE prices in August.

MLLDPE spot prices were still relatively low, however, and numbers below €1,400/tonne FD (free delivered) NWE (northwest Europe) were still said to be trading.

MLLDPE pricing is linked closely to price movements in other LLDPE segments and, earlier in 2013, there was strong competition between grades. Cutbacks and improved demand in recent weeks have meant MLLDPE prices are steadier than earlier in the year when new production led to strong competition between sellers.

The LLDPE C4 (butene based) spot price was trading up at a minimum of €1,300/tonne FD NWE because of price tightness, and some buyers quoted C6 (hexene based) LLDPE at levels not dissimilar to low density polyethylene (LDPE), around €1,340-1,370/tonne FD NWE. All prices are quoted on a net basis.

Sources are now looking towards September, when several said they expected an increase in the new ethylene monomer contract because of high naphtha prices, fewer imports and sustained demand.

($1 = €0.75)

By: Linda Naylor
+44 20 8652 3214

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