06 September 2013 10:02 [Source: ICB]
Demand could continue to rise in September from the construction sector
August demand for high density polyethylene (HDPE) pipe in Europe was above predicted levels, but the outlook for September is mixed, buyers and sellers said on 29 August.
Both producers and buyers said August volumes exceeded initial expectations, possibly driven by a surge in construction activity in July and August as weather conditions across Europe improved.
"Demand was more than initially planned for the month of August," one producer said, adding: "September will also look much better than forecast."
Looking ahead to September, a second producer is optimistic volume levels will strengthen.
"We do believe demand will be good. Traditionally, September is a strong month - still possible [because of] delays from a weak start of the year," it said, referring to flooding and bad weather, which hampered construction activity in the first half of 2013.
However, above-predicted demand levels in August should be taken in context, one buyer suggested.
"The market is good in Nordic countries, [but] Poland has pressure because demand [for] pipe is not as good as expected. Germany is the same," it said.
August 2013 forecasts may have been more conservative based on lower volumes and poor demand in 2012, so while current demand appears to be picking up, overall demand levels may still be lower than most market participants would like.
Raw material volumes used in the production of HDPE pressure pipe were down by 15-40% year on year depending on producer and country, the buyer added.
September and October are likely to be the last two months when construction activity is high before the winter weather begins.
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