Monthly ethylene contract rolls over, slight increases in LDPE, HDPE outlook not strong in Italy

03-Mar-10

As the monthly ethylene contract settles at a rollover, sellers will not be able to fulfill their full hike targets of €50-80/ton officially sought for March PE in Europe. As per Chemorbis, the main reason behind this expectation is that the while some buyers are adamant about rollovers for PE, other buyers believe that some slight increases will be almost unavoidable for LDPE because of limited supply. However, these initial targets will be trimmed down. Even though some increases are seen likely for LDPE, the outlook for HDPE is not that strong. As in February, it is still possible to find offers well below €1100/ton for HDPE film in the Italian spot market. A trader reported having sold some Iranian cargoes this week at €1050/ton with local terms, adding that offers at €1000/ton could even be found. Supply is considered comfortable while demand remains limited. A West European producer who is seeking €70/ton hikes for LDPE is planning to ask for smaller increases for HDPE, admitting that demand is not very strong. Another West European producer said although they raised their HDPE offers by €50/ton, they expect to obtain €30/ton. In the meantime, buyers are seeing rollovers as the most probable outcome for HDPE this month.