ICIS coverage of the European metallocene market provides you with weekly domestic price assessments, insight into Europe’s supply and demand situation and analysis of metallocene vs non-metallocene LLDPE.
The European low density polyethylene (LDPE) market has undergone a radical change in the past three months. Demand has fallen sharply and commodity grades are now in oversupply.
Coating grades remain relatively firm. The minimum commodity LDPE spot price at the end of August was at €1,150/tonne ($1,541/tonne) FD (free delivered) NWE (northwest Europe), but by mid-November it stood at €1,040/tonne FD NWE.
The main reason for concern in the LDPE market moving towards the end of 2011 is the level of demand, which some sources estimate to have dropped by more than 10%.
Production has been cut at cracker and polymer level. One LDPE producer is running production at 50% of capacity throughout November and December, while another reports its cracker output to be running at technical minimum at all sites during the same period.
LDPE spot activity is dominated by producers which have sold parcels to large buyers, bypassing contractual agreements. Exports have helped support the weak European market.
Demand for linear low density polyethylene (LLDPE) in Europe has slumped, with little possibility of exporting material to Asia, where demand has softened.
LLDPE from new production in the Middle East initially led to price erosion in the C4 butene-added LLDPE sector, but the slump in demand has led to producers fighting for market share on all grades. The line between the grades has become confused.
Metallocene LLDPE (MLLDPE) producers have decreased pricing at large accounts to levels barely above €1,200/tonne FD NWE in some cases, while LLDPE C4 is now at €1,020–1,040/tonne FD NWE from its end-August level of €1,140–1,160/tonne FD NWE.
C8 LLDPE sellers also pitched into the fray, offering product at MLLDPE levels, leaving C6 LLDPE sellers with product to spare, and offering it at C4 LLDPE prices at large accounts. Imported volumes of MLLDPE are offered at €1,180/tonne DDP (delivered duty paid) in Europe. Production is now being cut back heavily in a move to control the oversupply.
High density polyethylene (HDPE) non-film segments have been relatively stable over the past three months, and have only recently seen price erosion, following the November ethylene contract settlement at a €20/tonne reduction.
Imports have been stable in the blow-moulding sector and food packaging demand is holding up well for small bottles. HDPE injection offers have increased in November, with some imports available, and prices have slipped a little.
HDPE film, however, has seen significant price erosion as sellers with new Middle Eastern capacity have forged a place for themselves in the market by reducing prices.
Demand has been slow, however. Prices have dropped by around €80/tonne, or 7%. Production in Europe is now being cut back to accommodate weak demand. One major producer reports its cracker output to be running at 67%, its technical minimum.
Polyethylene is split into LDPE, HDPE and LLDPE.
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ICIS metallocene linear low density polyethylene (MLLDPE) report (Asia Pacific) focuses on C6 MLLDPE grades used in food and industrial packaging material.
What the report covers:
The ICIS Europe Metallocene LLDPE weeklyreport covers domestic contract and spot movements in the C6 blow film MLLDPE market, using information from key industry players including producers, buyers, traders and distributors.
The report focuses on C6 blow film MLLDPE grades and gives information on C6 cast stretch film and C8 MLLDPE grades, with analysis on C6 and C8 linear low density polyethylene (LLDPE) markets.
Production capacities and feedstock prices are also covered in the report, together with other essential information relating to both upstream and downstream movements, providing a holistic view of the market.
ICIS collects pricing data on a wide range of chemical, energy and fertilizer products, including Metallocene linear low density polyethylene. Our extensive experience in price reporting means we can offer you access to historical data dating back more than 20 years for certain commodities.
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