European LDPE sellers hopeful of raising prices next month

24-Aug-10

European low density polyethylene (LDPE) sellers are upbeat of hiking prices nest month as low inventories along the product chain are coupled with expectations of increased demand when buyers return from holidays, are expected to tighten availability, as per ICIS. Currently, the sellers are selling LDPE to some export markets at better netbacks than the low-priced accounts in Europe. August LDPE pricing was mixed, with some producers transferring the €18/ton (US$23/ton) drop in the monthly ethylene contract to early buyers and others expecting to be able to retain the decrease in the August monomer contract. Since producer margins are good, most buyers expect to gain at least a €20/ton reduction in monthly PE prices, even at retroactive accounts, which would be settled at the very end of the month. However, producers opine it not necessary to reduce ethylene prices as stocks are low and export markets are picking up. LDPE buyers have paid increases throughout 2010 and were only able to get some limited relief in the summer months. Year-to-date prices have risen by over 30%, and western European LDPE was now trading at €1220-1250/ton FD (free delivered) on a net basis in most of Europe. In UK and Poland material from new capacity was said to be offered at discount levels- with bids as low as €1150/ton. LDPE prices in Germany and France were reported at €1250/ton FD.