Europe PE producers’ April hike targets meet strong resistance

07 April 2017 12:24 Source:ICIS News

Tim Graham / robertharding/REX/ShutterstockLONDON (ICIS)--Polyethylene (PE) producers are facing strong resistance to higher price targets in April, and buyers are relaxed, confident of a rollover, and even prepared to push for lower prices, sources said on Friday.

“We will certainly go for a price decrease,” said one buyer, “and a rollover is in the bag.”

“I can sum up April quite quickly.” said another buyer. “Rollover.”

“We had seen room for a price increase,” said a producer, “but increases have been limited.”

Some PE grades were under more pressure than others, and while high density polyethylene (HDPE) in general was widely seen as flat, some limited hikes were seen in the pipe sector. This was put down to competing sectors unable to supply, production issues and good demand for parts of the business.

The HDPE blowmoulding sector was being affected by low-priced imports, and here, producers were struggling to push increases onto the market in April.

While the C4 (butene based) linear low density polyethylene (LLDPE) market had been experiencing tight supply in recent weeks, this has eased somewhat as other LLDPE grades have been available to substitute C4 LLDPE. Metallocene LLDPE has been widely available in the past couple of weeks.

One producer was not ready to let everything go at a rollover, and still saw room for improvement.

“We’ve achieved higher prices in eastern Europe and Russia,” it said.

Spot prices were generally stable to slightly lower, depending on the starting-point of discussions, but there were expectations of lower prices to come as imports became more widely available.

Lower prices in Asia are leading to new offers into Europe, and European prices have risen from their low level in global terms, making it more attractive to sellers.

One producer urged a word of caution against expecting lower prices, following Friday’s spike in oil prices, on the US attack on Syria.

PE discussions are expected to continue throughout the month.

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

By Linda Naylor