LONDON (ICIS)--European polyethylene (PE) buyers and sellers are seeing the approach of the bottom of the current cycle, depending on the grade, sources said on Thursday.
“I am slightly bullish,” said a trader, talking mainly of low density polyethylene (LDPE) and linear low density polyethylene (LLDPE).
High density polyethylene (HDPE) was still considered to be weak, but spot prices have stopped dropping, sources agreed. Early month offers were very low, however, with injection spot sales well below €1,000/tonne FD (free delivered) NWE (northwest Europe), and some buyers have been able to build stock at these levels.
LDPE spot prices were the ones with most potential to rise, according to both buyers and sellers, but only a modest move was expected by most.
LLDPE C4 (butene-based) was also strong.
“I’m more and more convinced that [the] July price was already the bottom,” said another trader. “Enquiries from customers have not stopped coming…this month.”
Even in the HDPE sector, lower prices were not expected, while the strong euro and import offers could affect the grade’s ability to increase, said some sources.
“Producers have had a huge inflow of demand and the bottom has been reached,” said a large HDPE buyer. “Most have sold their stocks in June.”
“It will stay at this level,” it continued. “Imports are available. The euro is strong.”
The trader agreed: “Imports are very interesting due to the USD/euro rate.”
Monthly prices were generally down by the €50/tonne drop in the July ethylene contract, with some exceptions in the HDPE and metallocene linear low density polyethylene (MLLDPE) markets.
PE is used in packaging, the manufacture of household goods, and in the agricultural sector.
Focus article by Linda Naylor
Image at top - Polyethylene film. Source: Tim Graham/robertharding/REX/Shutterstock