Europe HDPE pipe players wait for ethylene to settle

21 November 2013 17:20  [Source: ICIS news]

LONDON (ICIS)--High density polyethylene (HDPE) pipe prices have settled down by an average of €35/tonne ($47/tonne) in November and players are waiting for the December ethylene contract to settle to give some direction to the market for December pricing, several said on Thursday.

Several polyethylene (PE) producers said they expect between a rollover and small increase for the upstream contract and many players expect little change in December HDPE pipe prices as the industry seasonally slows down further.

Expectations over 2014 demand are mixed. One large HDPE pipe converter is optimistic for good growth rates next year, and a couple of producers have noted strong offtake for PE 100 orange grade, particularly in the past few weeks.

Other players are not so optimistic, however, and do not expect a strong upturn in 2014. Data published by Eurostat this week showed a fall in September output in the construction industry.

 Construction Data

Sep 2013

Aug 2013

Vs Sep 2012









Revised data also showed that an August month-on-month output rise was more modest than previously thought. The agency initially estimated output rises of 0.4% in the EU and 0.5% in the eurozone for August, but this has been cut to 0.2% and 0.3% respectively.

Turning to annual comparisons, year on year, construction output increased by 0.2% in the EU and declined by 0.2% in the eurozone. The construction industry is a key end market for the HDPE pipe market.

HDPE is widely seen as the weakest polyethylene (PE) sector and a number of plants are due to be closed in the coming months, following two earlier closures. European plants have been closed for commercial reasons as imports from low-cost producers build market share.

HDPE closures







Tessenderlo, Belgium



End 2012


Antwerp, Belgium


To close

End 2014


Wesseling, Germany



Q3 2013


Burghausen, Germany


To close

End 2014

The date when duty from several established importers rises is coming closer, as tariffs on PE from the GCC countries (Gulf Cooperation Council), among others, will be lifted from 3% to 6.5% from 1 January 2014.

Increasingly buyers are saying they expect their suppliers to absorb this increase, with some saying they already have assurances that this will be the case.

Some importers said they are not prepared to lose margin amounting to 3.5 percentage points but many players expect imports to trade at the prevailing market rate. HDPE is not considered to be strong enough by many for prices to increase solely on the duty rise.

($1 = €0.75)

By: Linda Naylor
+44 20 8652 3214

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