Europe PE buyers face three-digit September hikes

06 September 2013 17:29  [Source: ICIS news]

LONDON (ICIS)--Buyers in the European polyethylene (PE) market are facing increases of up to €100/tonne on certain grades as producers target rises of €50/tonne above the feedstock price, market sources said on Friday.

Switzerland-based PE producer Dow publicly announced a €150/tonne increase on its high density (HDPE), low density (LDPE) and linear low density polyethylene (LLDPE) resins via the company’s website.

However, one producer said: “Dow state always very high, but you can cut it [Dow’s price target] in half usually”.

A second producer is looking to increase its HDPE prices by €100/tonne for its freely negotiated monthly business on the expectation that the market will tighten during the month due to upstream production constraints.

Targets for LDPE and LLDPE monthly prices were between €70-90/tonne up on August prices.

Buyers are still in discussions over prices, and because of the late settlement in the ethylene contract price on 3 September, many said a much clearer picture of price movements will emerge next week.

Some buyers are not happy to pay anything above the monomer increase, however.

“[The rise in] ethylene, I have to live with – ethylene plus, I don't have to live with,” one buyer said, referring to producers' attempts to increase prices above the rise in feedstock ethylene.

A buyer of LDPE and LLDPE said: “We have not fixed any deals on a monthly level, just gathering data, nothing really concrete. My feeling is that we really have not enough demand to support this [suppliers’] price idea.”

LDPE and LLDPE markets remain tight, although players on both sides said this tightness may be easing as port congestion in Saudi Arabia reduces.

By: Matt Tudball
+44 208 652 3214

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