US PE imports into Europe scarce for prompt delivery, but later offers made

Author: Linda Naylor

2019/04/12

LONDON (ICIS)--US polyethylene (PE) imports into Europe are not so freely available for prompt delivery, but new offers are being made for delivery in June and July.

  • April prices up
  • LLDPE import supply tighter
  • Planned, unplanned outages prop up values

Some PE grades have posted a sharp lift in prices in April, as availability has tightened.

C4 (butene based) with linear low density polyethylene (LLDPE) – a predominantly imported grade – has been particularly affected.

Average ICIS spot prices have risen by over 7.5% since February.

Local sources said that US production was up in March, following a period when not much was available to European traders, and there are new offers for June/July delivery.

Middle Eastern supply is also less available in Europe in April, particularly for cast grades – formerly sold at the low end of the price range for C4 LLDPE – and cast prices are no longer sold at a discount over blown grades.

It is not clear how many European buyers will take advantage of the new offers from the US.

Any risk of oversupply in PE markets is predominantly in the LLDPE sector, and traders are expected to approach the market with caution.

The market in Europe is currently stronger than expected for some suppliers, with smaller sellers and distributors not seeing the same sort of demand.

On Thursday, Dow closed order books for LLDPE and low density polyethylene (LDPE), adding a €70/tonne supplement to new business for extra volumes, and another producer said on Friday that its C4 LLDPE position was sold out for April.

LDPE is a domestic-based market in Europe, with most material produced in the region, and this has been boosted by some cracker production issues.

It has also been exacerbated by the unconfirmed, unplanned closure of LyondellBasell’s 320,000 tonne/year LDPE plant at Aubette, France.

All PE prices have increased in April, with levels moving up by at least €30/tonne.

US imports that have affected the European market so far have been C4 LLDPE, metallocene liner low density polyethylene (MLLDPE), and some grades of high density polyethylene (HDPE), where spot deliveries have been patchy.

One fly in the ointment for buyers expecting lower import prices could be the lack of Iranian material available, however. Export demand and pricing from the US has picked up as floods in Iran have limited PE production in the country.

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

Pictured: LyondellBasell's Aubette petrochemicals facilities, where its 320,000 tonne/year PE plant is located
Source: LyondellBasell

Focus article by Linda Naylor