High polyethylene prices in Europe attract imports for October

High European polyethylene prices are attracting import offers for October delivery from Asia and the Middle East, as per Platts. According to Platts data, low density FOB NWE prices have steadily climbed after touching 2012's low of US$1227.50/mt June 1. Prices in Asia that day were at US$1240/mt CFR FE. However, since then a clear divergence has emerged with European FOB NWE accelerating to US$1737.50/mt Wednesday, while the Asian price had moved up only to US$1294/mt CFR FE Asia. Converters started to destock in September with the import offers clouding expectations of another big increase. The converters have no urgent buying requirements, and availability seems plentiful in October. Converters said they were receiving imports spot offers from the Middle East, Korea, Thailand and China for October deliveries for most PE grades. The soaring value of the euro against the dollar was supportive of the open arbitrage economics. Prompt supplies, however, for most PE grades remained tight with a spate of production issues and cracker turnarounds. Four steam crackers combining 2.67 mln mt of ethylene capacity are in maintenance from August-October: Total Petrochemicals and Ineos' Naphthachimie steam cracker in Lavera, France; LyondellBasell's Wesseling cracker in Germany; Borealis' Porvoo steam cracker in Helsinki, Finland, and the Shell and ExxonMobil jointly owned ethane cracker at Mossmoran in Scotland. In addition three NWE petrochemical producers are currently on allocation for high density PE supplies due to production issues. NWE PE producers said that they expected the market to remain a "European game" till import arrivals in October. The added that their utilization rates were reduced to keep inventories under control due to pressure on margins which was adding to prompt tightness in the market.
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