LONDON (ICIS)--High density polyethylene (HDPE) pipe prices are settling down by up to €15/tonne, as falling naphtha prices point towards further price decreases in September, sources said on Thursday.
Demand is still good in eastern Europe, Spain and Russia, while other regions are quiet as holidays are in full swing.
Some buyers expect to be able to push for more of a decraese, but the market is balanced, and sellers see no reason to give away more than the €15/tonne drop of the August ethylene contract.
“Demand is pretty reasonable,” said one buyer, “but it’s not tight any more. I might be able to get more than the €15/tonne [decrease].”
On the other hand some sellers said they were not relinquishing even as much as the full €15/tonne drop of the ethylene contract.
“We have done minus €10/tonne for all our pipe business,” said a producer.
Lower naphtha prices are leading to expectations of a significant drop in the September ethylene contract, and buyers expect this to be transferred to polyethylene (PE) prices next month.
Buyers said they had been informed that LyondellBasell’s Wesseling production site in Germany would be down for a planned maintenance outage from the coming weekend, 16-17 August, to mid-end September.
While this outage is planned, and provision will therefore have been made for it, no real disturbance in the market is expected to be felt, except in the case of an unplanned outage elsewhere.
If there are no unexpected surprises, the market is expected to be finely balanced in the coming weeks.
HDPE pipe is used widely in the construction sector.