October polyolefins allocation from Middle East to Asia may be lower

The October polyethylene and polypropylene allocation to Asia from Middle East may be lower because of high European prices, as per Platts. European PE and PP prices have jumped since the start of September as converters replenished stocks amid rising feedstock costs. High density polyethylene (HDPE) prices were also being pushed up on the back of tight supply in Europe as three European producers have placed HDPE supplies under force majeure. Sources said Middle Eastern producers are likely to allocate more material to Europe in October due to the huge price difference in the two regions. Europe prices are about US$300/mt higher than Asian prices. Therefore, it make sense to allocate more material to the European market. The FOB Northwest Europe markers were assessed at US$1742.50/mt Wednesday. In Asia, HDPE-film was assessed at US$1330/mt CFR Far East Asia and US$1348/mt CFR Southeast Asia Wednesday. FOB Northwest Europe homopolymer grades of polypropylene were assessed at US$1732.50/mt Wednesday, while in Asia, PP raffia was assessed at US$1425/mt CFR Far East Asia and US$1432/mt CFR Southeast Asia. PP injection was at US$1432/mt CFR Far East Asia and US$1417/mt CFR Southeast Asia Wednesday. Middle Eastern producers typically announce their new offers after the 20th of each month. Asian producers and traders are receiving inquiries from European buyers this week especially for HDPE-film, PP raffia and PP injection. Most inquiries from Europe were heard to be for prompt shipments. Despite the open arbitrage window, markets sources were skeptical that this will result in a steep rise in Asian prices as demand remained sluggish.
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