Europe HDPE fortunes differ, domestic prices remain low in global terms
Linda Naylor
03-Aug-2018
LONDON (ICIS)–Some, but not all, European high density polyethylene (HDPE) sellers were hoping to lift prices in August due to a balanced-to-tight supply in some grades and the fact that values remain low compared to Asia.
– Balances mixed, some grades tight
– Fresh import offers too high to work in Europe
– Asia remains better option for exporters
Fresh imported volumes have been offered, but remain generally too high to work. FOB (free on board) levels in the US have been falling but remain too high to work into Europe.
The graph below shows HDPE blowmoulding FD (free delivered) NWE (northwest Europe) spot range – minus 6.5% duties and costs to equate loosely to a CFR (cost and freight) price – compared with the Asian CFR price and US FOB (free on board) price.
HDPE injection spot prices have slightly decreased in spite of talk of higher prices from some sellers, and levels of €1,150/tonne were considered too high to be the low end of the price range.
Sources question the starting-point of discussions at some producers, as a plus €20/tonne – as suggested by some – would mean the starting point must have been very low.
“Customers are collecting offers to see where prices are going,” said a trader, “but there are still some low expectations.”
HDPE blowmoulding remains in a wide spot price range, with some grades tight, and HDPE film is still the strongest HDPE grade.
“There are some fresh offers of imports, also
from the US, but they [sellers] are still far
away from the reality of the European market,”
said the trader.
Buyers did not generally expect to be paying
more for monthly contracted volumes.
“Looking at the situation in Europe – lower imports, low prices in global terms, poor margins for producers – I might expect an increase, but it’s looking like rollover,” said one.
The pipe sector was slightly different from other HDPE grades in the wider market.
The spread between ethylene and pipe was good, and some HDPE production in Europe has shifted towards pipe where possible.
The recent fall-off in demand in Asia, and most
particularly China, has had a dampening effect
in Europe, where export volumes have dropped
off.
HDPE pipe buyers have not yet settled the
month, but some saw the possibility of a
limited price drop.
Pricing discussions were expected to drag on into the month and potentially settle towards the end because of holidays.
Pictured: HDPE pipes
Source: US’ Pacific Northwest Pollution
Prevention Center (PPRC)
Focus article by Linda Naylor
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