Year’s first decline in European polyethylene contract prices

09-May-12
European polyethylene contract prices, weighed down with a drop in May ethylene contract price, posted their first decline in four months, as per Platts. Ethylene contract price for May was Eur 1325/mt FD NWE, down Eur 20/mt from its historic high in April. PE producers positioned themselves to constrain the decrease to Eur20/mt. Converters seem keen to see prices fall by more than minus Eur20/mt, as demand is not high enough in Europe to sustain current levels. Converters reported lagging end-user demand in a recessionary environment. Only demand from the beverage industry continued to buck the trend of slowdowns in order income, converters reported. "Work on our machines is good and were running almost 24 hours a day. As it is spring time, demand for sleeves and foils is keeping us busy," one converter reported. Converters in other markets were less sanguine, as per Platts . "We have switched off some of our machines that make stretch film," a converter said, adding that "Demand is shrinking from most sectors and there is a pressure on prices." Converters continued to struggle to pass on increases downstream. "Competition in the shrink film market is intense. It is not an environment to increase prices," another converter said. PE sources added that weakness was more pronounced in the PE film market, while coating and blowmolding grades were stronger. "Films for industrial applications is particularly weak," one said.
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