LDPE prices under pressure in Europe as end-user demand falters

20-Sep-13

European low density polyethylene spot prices have come under pressure as converters step out of the market amid faltering end-user demand that could see stocks last longer than expected, sources said in Platts. Also, a downturn in geopolitical risk has weighed on feedstock prices -- hydrocarbons like naphtha are used to produce ethylene, the feedstock for LDPE, adding there were few short positions in the market needing to be covered. A few production issues that continue in the have prevented surplus building. Dow's Tarragona cracker in Spain was heard to be still offline after an unplanned outage for almost the first half of October. SABIC said its Olefins 4 cracker at Geleen in the Netherlands started maintenance last week and sources said Ineos's No.5 cracker in Cologne, Germany, also began planned work last week. Naphtha prices were assessed at US$919/mt CIF NWE on Wednesday, down from US$942.50/mt CIF NWE a week ago, while ethylene spot prices were down Eur20/mt (US$27/mt) on the week at Eur1,115-1,120/mt FD NWE. While European producers were offering product over Eur1,400/mt FD NWE, the expectation was that prices would fall. Prices were assessed down Eur10/mt week on week at Eur1,380-1385/mt FD NWE on Wednesday.