European polyethylene prices advance on support from bullish feedstock

13-Jan-12

Finding support from bullish ethylene, European polyethylene contract and spot prices advanced this week, as per Platts. This week’s surge in spot ethylene prices follows historic low cracker margins touched last week. Ethylene spot prices crossed the Eur 1000/mt (US$1276/mt) FD NWE mark this week, for the first time since mid-September. In the polymer contract market, low density PE, linear low density PE and high density PE have so far posted increase of Eur 40/mt -- equivalent to the increase in the January contract price for ethylene. The LDPE contract price was assessed at Eur 1260-1265/mt FD NWE Wednesday. Producers are targeting increases over the Eur 40/mt ethylene contract price increase at Eur 60-80/mt. "We don't see any other producer being flexible with pricing below an increase of Eur60/mt," one producer said. Converters are eager to buy their January allocation early in the month in the face of rising prices, but were discouraged by flat order books. In the LDPE market, spot prices were assessed at Eur 1120-1125/mt FD NWE, rising by Eur 30/mt week-on-week. In LLDPE, spot prices surged to Eur 1080-1085/mt FD NWE, gaining Eur 50/mt on the week. Offers for cast and blown film were heard at Eur 1060-1080/mt and Eur 1100-1130/mt FD NWE respectively. All HDPE grades are at a minimum Eur1,100/mt FD NWE.