LDPE, LLDPE spot prices in Europe fall on destocking

21-Sep-12

European linear low density polyethylene and LDPE spot prices fell for the first time in two and a half months this week due to destocking, as per industry sources in Platts. LLDPE and LDPE spot prices shed Eur25 (US$32.38) and Eur50 week-on-week to be assessed at Eur1400-1405/mt and Eur1350-1355/mt FD NWE, respectively, on Wednesday. Converters said that high raw material prices were deterring them from running at high utilization rates. "Some of our machines are on standstill as our customers don't want to pay these high prices," one converter said. "We don't want to overstock on finished product on either industrial or consumer packaging," another converter said. Bearish expectations for October deterred incremental buying. Price expectations for October were bearish because feedstock naphtha tumbled by US$90.75 week-on-week to be assessed at US$908.25/mt CIF NWE Wednesday. Supply conditions were described as more relaxed. "I feel that distributors are still waiting for LLDPE containers from the Middle East and are constrained on volumes. However, demand is not high," a converter said. Another converter said that he struggled on carrier bag production at the beginning of month due to tight butene availability but added that he refused to pay some of the high prices being offered.