Fall in polyolefin spot prices in Europe continues on steady flow of competitively priced material

European polyolefin spot prices continued to fall this week, by €20-60/ton (US$28-85/ton), as the steady flow of competitively priced material from both local and import suppliers continued to weigh on values, as per ICIS. Trading activity is extremely slow as expectations of lower prices in the coming weeks, coupled with numerous public holidays over June, pushed buyers to the sidelines. Many sellers responded to this limited buying interest by slashing their offers in a bid to move high-priced inventories before prices fell further. This was most apparent in the low density polyethylene (LDPE) market, where spot values have fallen by €180-200/ton since the beginning of May, leaving prices at €1,250-1,300/ton FD NWE. The downtrend appears to have lost some momentum in the PE market and prices seem to have bottomed out. Polypropylene (PP) prices still has some way to fall, with homo polymer raffia PP registering large losses of €50-60/ton this week to leave spot prices at €1,250-1,280/ton FD NWE. The market continues to fall amid weak demand. Though prices have not yet bottomed out, they continue to get more competitive. However, buyers are still reluctant to take material even at such dramatically reduced prices. Most wish to avoid stockpiling in anticipation of a price drop in July. This is a view shared by many PP/PE buyers and sellers alike. Numerous sources believe that prices will remain under pressure while the Chinese market remains slow, while upstream ethylene and propylene prices are expected to decrease again in July given the lengthening availability in the market.
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