LONDON (ICIS)--Polyethylene (PE) prices are falling further than the €35/tonne drop in the June ethylene contract price, sources agreed on Friday.
The extent of the decrease depended on the grade and seller concerned, they said.
Initially several PE producers relinquished the €35/tonne drop immediately, but it soon became clear that more would have to be given.
“Our starting-point is minus €50-60 [/tonne],” said one low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) buyer.
One high density polyethylene (HDPE) blowmoulding buyer said it was targeting a minus €50/tonne for the month, while another, smaller, buyer said it had a decrease of €80/tonne. The assumption is that the starting-point of these accounts is very different.
The same price disparity was reported from the HDPE injection sector.
“We can’t sell anything beginning with an 11,” said a trader.
A producer, on the other hand, was closing its HDPE injection order books for June, on strong demand, and quoted no sales below €1,150/tonne FD (free delivered) NWE (northwest Europe).
There was some suggestion that buyers would be looking for more product in the coming days, as problems with Qatari supply could ensue from the recent restrictions, but the demand picture on PE in June remained generally mixed- spot sellers complaining of weak demand- and monthly sellers generally satisfied with volumes.
A distributor was not worried: “Our product is delayed by 15 days,” it said, “but with the current state of the market I can’t see this having an impact.”
Spot prices were falling fast, and some PE grades were now trading below €1,100/tonne FD NWE.
The erosion in upstream crude oil prices was having an impact on sentiment.
“They [buyers] are expecting lower ethylene next month, and lower polyethylene, so they won’t be buying big volumes,” it said.
PE is used in packaging, the manufacture of household goods, and also in the agricultural sector.
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