12 September 2013 18:12 [Source: ICIS news]
LONDON (ICIS)--European high density polyethylene (HDPE) pipe prices look likely to rise above the cost pass-through of ethylene as September price discussions continue, buyers and sellers said on Thursday.
Some producers have reduced their initial targets in some cases, with one producer agreeing some business at a €50-60/tonne ($67-80/tonne) increase on August prices, rather than the €90/tonne rise it announced last week.
“Buyers were fairly accepting, but it was understood they would have an increase,” one producer said of passing an increase on in September.
Buyers have also concluded some business at higher prices than August. One buyer said it had finalised some talks with its suppliers at increases above that of the €50/tonne September feedstock ethylene rise.
There was one supplier, however, who was not currently willing to lower its target of a €70/tonne rise.
A second buyer, who has not finalised any talks with its suppliers yet, said it was looking for increases either at the same level as ethylene, or possibly lower.
Demand got off to a slow start because of uncertainty around the direction of crude oil prices as buyers waited to see if military action would take place in Syria. However, order levels picked up once the political tension in the region eased following Russian intervention, and are now at forecasted levels for September, a producer said.
Stronger demand was seen in Scandinavia and central parts of Europe, with countries in the south being the weakest in terms of September order levels.
There was some disagreement between the buy and sell side as to whether or not demand from Germany was faltering.
“We see a problem in Germany – demand has really dropped, not only from suppliers. [We have] seen no supplier who said that there's good demand in Germany, definitely no,” a buyer said of the German market.
However, a producer said it saw Germany as a source of good demand for the HDPE pipe market.
Price discussions are ongoing.
($1 = €0.75)
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