Europe HDPE pipe prices slip for first time in a year

Source: ICIS News


LONDON (ICIS)--High density polyethylene (HDPE) pipe prices have slipped in July for the first time in a year.

HDPE pipe remains one of the strongest polyethylene (PE) grades, in spite of the erosion this month, and retains one of the strongest ethylene/PE spreads.

Not all buyers have been able to get a reduction, while some have managed to get the €15/tonne drop from the July ethylene contract.

Most sources agreed that any erosion depended on the starting-point of negotiations.

HDPE pipe prices have been strongly supported by the Asian, and particularly the Chinese market, and this market has begun to ease.

Exports from Europe have slowed down, leaving ample supply in the domestic market.

Some other HDPE production in Europe - where netbacks were not as good as in pipe - was switched to pipe where possible.

While HDPE pipe remains the strongest grade at present, other HDPE grades are also strong compared to low density (LDPE) and linear low density polyethylene (LLDPE) markets.

Some sellers are confident of a pick-up in China, where stocks are currently high, and prices down.

Coal-to-gas projects have been soaking up huge volumes of HDPE pipe in recent months, and they are confident this will pick up again once when stocks are used up.

Some sources in China, though, expect only limited demand for these projects towards the end of the year, as the pipe season would normally end at the end of September.

European pipe demand has been steady, with some speciality grades tight in recent months.

HDPE pipe is used mainly in the construction sector.

Image: PE is used to make bags. (Photo credit: Dinendra Haria/REX/Shutterstock)