Europe PE monthly prices stable, spot prices dip

23 September 2016 11:30 Source:ICIS News

Focus article by Linda Naylor

LONDON (ICIS)--Europe's polyethylene (PE) monthly prices largely rolled over in September, but spot prices have eased this week, sources said Friday.

“We have rolled over on September PE, but aren’t seeing any price reductions,” said one PE producer.

“We have rolled over in September,” agreed a large buyer.

Some buyers want to see if they can get a price reduction when they discuss monthly pricing at the end of the month.

“I will be trying for minus 10-20 [€/tonne],” said another buyer.

Similarly some sellers were still aiming for a modest increase on some grades, particularly low density polyethylene (LDPE).

Most PE buyers have bought what they need to buy.  PE buyers are waiting for the October ethylene contract to settle, which may happen next week, to get a sense of what to expect next month.

Upstream costs are around €20/tonne higher than when the September ethylene contract was settled, and the ethylene market is considered to be balanced.

The September ethylene contract stands at €925/tonne FD (free delivered) NWE (northwest Europe), a rollover from the August contract.


Spot PE prices are showing evidence of a reduction of around €20/tonne in many cases, however.

“Activity is really bad,” said one trader, “and buyers say they are covered. Prices have fallen.”

Decreases are limited to around €20/tonne in most cases.

LDPE low-end low levels have slipped back to around €1,200/tonne FD NWE, while some high density polyethylene (HDPE) grades are now trading below €1,200/tonne, having climbed above this in recent weeks.

One major producer said its lowest LDPE price was €1,230/tonne, and lower levels were offered by some traders.

Some buyers were not convinced this easing in the spot market would transfer into the monthly market in October, and said they expect PE prices to follow whatever happens in the upstream ethylene sector.

Most sources expect the pricing situation to become clearer next week, when the new monomer contract will be known.

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

By Linda Naylor