LONDON (ICIS)--Polyethylene (PE) sellers are pushing hard for increases in September above the €30/tonne hike of the monthly ethylene contract price, buyers and sellers agreed on Monday.
“The full picture is not yet clear,” said one large buyer, “but [producers are] very aggressive in some cases.”
The September ethylene contract settled at €995/tonne FD (free delivered) NWE (northwest Europe), up by €30/tonne compared to August, and PE sellers were looking for price hikes above this, said buyers.
“They’re saying C2 [ethylene] plus,” said another buyer. “Some at C2 plus 20 [€/tonne], one at plus 40, another at plus 80.”
Others had the same story but agreed that it was early stages for most PE monthly discussion.
Most expected the situation to be a little clearer at the end of the week, but retroactive discussions still existed for many large buyers in the PE market in Europe, and these would not be finalised before the very end of the month.
Buyers acknowledged that upward pressure was unlikely to abate by the end of the month, however.
“I have settled one already at plus 40 [€/tonne],” said a buyer, “but I’m not sure that will be there for that long.”
Another buyer with an ethylene-linked contract said it had been informed that only minimal contractual volumes would be supplied at what would be a plus €30/tonne over August, and any extra volumes on top of the minimum agreed in the contract, would be at a higher price.
“We are firmly increasing by €60/tonne in all customer/products in September,” a particularly bullish producer said. “…the order load is extremely strong as a result of very good demand and low inventories, [and] pricing is going up in other regions.”
Spot prices were also moving up, with one buyer quoting low density polyethylene (LDPE) at €1,230-1,240/tonne FD NWE.
Some logistical issues were also leading to tightness in some areas.
PE is used in packaging, the manufacture of household goods, and also in the agricultural sector.
(Picture source: Source: PhotoAlto/REX/Shutterstock)