EPCA '16: Europe PE PP players uncertain as monomers settle

02 October 2016 10:00 Source:ICIS News

BUDAPEST (ICIS)--Polyethylene (PE) and polypropylene (PP) players in Europe are uncertain about the pricing trend for their products in October, as monomer contracts settle ahead of the 50th annual European Petrochemical Association (EPCA) meeting.

The October ethylene contract settled at €940/tonne FD (free delivered) NWE (northwest Europe), up by €15/tonne from its September level, while the propylene contract finally settled at €725/tonne, an increase of €35/tonne.

Monomer contracts were done too late for many polymer suppliers to have the time to inform customers of pricing policies on Friday 30 September, but some major PE buyers had been given ideas.

“A couple of suppliers have told me their response will probably be to follow the monomer,” said one such buyer.

Others were still caught up in discussions for September retroactive pricing.

"We’re still discussing September,” said another. “I haven’t spoken to suppliers [about October] yet but I don’t know why we should see an increase. The market is balanced.”

Spot PE pricing has been very quiet, and prices had moved down towards the end of the month.

PP sellers had not yet informed buyers of pricing plans for October, in spite of the lateness of the day, as the propylene contract was only finalised on Friday morning.

Some PP grades had been tight, along with propylene supply, and while buyers did not expect to be paying a significant increase - some expecting not even to cover the propylene hike - they did expect suppliers to target at least the propylene hike.

“PP is not like PE,” said another buyer. “There will be an impact from the contract.”

PE and PP pricing discussions were expected to begin in earnest next week.

PE and PP are used in packaging and the manufacture of household goods. PE is also used in the agricultural industry, and PP in the automotive sector.

By Linda Naylor