LONDON (ICIS)--Polyethylene (PE) spot prices are under downward pressure in Europe in August, as buyers see naphtha fall and demand dwindle for summer, sources said on Thursday.
“There’s not a lot going on,” said one reseller, “but customers are saying they are being offered lower prices every third day.”
Information throughout the continent is very patchy, however, as southern European markets are all but closed.
“We are not hearing lower prices, because nobody is talking at all,” said one producer. “They are all on holiday.”
A trader echoed this sentiment. “I can’t tell you any news because there isn’t any,” it said.
Where business was heard, lower prices were talked.
It is the expectations of a lower September ethylene contract that are leading to lower spot prices in August.
Low density polyethylene (LDPE) spot ideas are now below €1,300/tonne FD (free delivered) NWE (northwest Europe) in some regions, from around €1,350/tonne FD NWE only a week ago.
Naphtha was trading at $861-865/tonne CIF (cost insurance & freight) NWE on Thursday morning.
Monthly PE prices have not yet settled for August, but most sellers think they will be able to get away with relinquishing just the €15/tonne of the August ethylene contract drop.
“We have even managed to do some August business at a rollover,” said the producer, but retroactive accounts are expected to be looking for more than a €15/tonne decrease when they come to settle in a couple of weeks’ time.
In spite of the talk of lower September prices for PE, there is no evidence of widespread bulk spot offers in August.
PE is used widely in the manufacture of household goods, packaging and in the agricultural sector.