Europe MLLDPE players wait for Feb ethylene to settle

24 January 2014 17:56 Source:ICIS News

LONDON (ICIS)--Monthly metallocene-based linear low density polyethylene (MLLDPE) prices have increased by €30/tonne in January, but activity has been subdued in the second part of the month as the majority of buyers wait for a lower ethylene contract price that they expect to be transferred on to MLLDPE prices, sources said on Friday.

Spot prices have been stable this week, following a rise earlier in the month, but they are still considered to be relatively low compared to other polyethylene (PE) grades.

Spot prices are trading at €1,400/tonne FD (free delivered) NWE (northwest Europe) and above, compared to the mid-€1,300s/tonne in December.

Demand for MLLDPE is expected to remain solid as downgauging becomes increasingly more important.

Oversupply in this field is also leading to more interest compared to other linear low density polyethylene (LLDPE) grades, particularly in the C8 (octene based) sector as the major producer pushes ahead with hefty increases, while competition in MLLDPE puts a lid on price hikes.

Buyers expect any reduction in the February ethylene contract to be transferred to the MLLDPE sector but a rally in naphtha prices this week is tempering hopes of a significant reduction in the new monomer contract.

The new ethylene contract is expected to settle next week, giving some direction to the MLLDPE sector.

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By Linda Naylor