08 January 2014 16:19 [Source: ICIS news]
LONDON (ICIS)--Linear low density polyethylene (LLDPE) C4 (butene based) prices are trading higher, as January business gets under way in Europe, market sources said on Wednesday.
Prices had been rising in December on tighter availability and the expectation of higher feedstock costs, and new business in January was now being done around €1,300/tonne FD (free delivered) NWE (northwest Europe), from a low of €1,250/tonne at the end of November.
“We can’t sell as high as €1,340/tonne [FD NWE],” said a trader, “but we are selling good volumes this week.”
Buyers said that they had been informed of price hikes also for monthly contracted volumes, following the €15/tonne increase in the January ethylene contract price. It was not clear how successful increases above the monomer levels would be.
“We are looking for an increase of €50/tonne,” said one producer.
While cracker margins have been boosted by lower naphtha prices, the average annual 2013 contract margin was 2.4% below 2013 and 7.4% below 2011. Fourth-quarter 2013 margins were the lowest since the first quarter of 2012.
“We are still running at reduced levels,” said another producer, as while prices were higher, production run rates were still being adjusted industry-wide to accommodate fundamentally poor demand in Europe.
Several large buyers said they fully expected to be covering the €15/tonne increase of the monomer contract, but discussions for the month were unlikely to begin in earnest in many regions until the end of January.
LLDPE is used widely in packaging and the agricultural sector.
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