Europe PE spot prices trading in very wide spread

LONDON (ICIS)–Spot polyethylene (PE) prices are trading in a very wide price spread in some grades, sources said on Friday.

The most extreme spread was in the high density polyethylene (HDPE) blowmoulding market, where some trucks were still moving at just below €1,100/tonne FD (free delivered) NWE (northwest Europe), and some at above €1,300/tonne, as brand owners insisted on approved material from limited sources.

Producers were not prepared to offer at the low end of the range, and said they were able to choose only high-end business as the US was still pulling volumes after recent extreme weather events, and traders that needed product for export were prepared to pay more.

Low density polyethylene (LDPE) prices were also trading in a wide spread – former levels of €1,230/tonne were still in the market, said sources, while €1,300/tonne and above was offered for some LDPE grades from producers.

In the distribution and local traded sectors, there was no new push to buy following this week’s settlement of the October ethylene contract at €1,025/tonne FD  NWE, up by €30/tonne from its September level.

Often in these sectors the settlement of the monthly contract would herald a new spate of buying, but several sources said this week that this had not yet happened.

“They [converters] bought a lot in July and August and they just don’t need to buy now,” said one trader.

Some resellers were still selling at old, September, levels, in spite of the fact that replacement prices to replenish stocks were largely too high to work.

“New offers for November mean prices in Europe would have to go up for them to work,” said one.

In spite of the lack of material coming from the US, and the continued problems there caused by hurricanes, there was still some hesitation to buy, as at some point, new capacities would be on stream, and were destined for export.

Some traders said they were being offered material from the US for 2018, and that it was plentiful.

Initially new capacities had expected to begin to export to Europe in 2017, but this date was being pushed back into 2018, as production and logistics problems continued.

In the monthly PE market sellers were fairly relaxed, talking of improved margins, according to buyers, and able to sell material elsewhere if European buyers did not want it.

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