Northwest European players voice June expectations for PE

The PE market is continuing to track a stable to firmer trend in Northwest Europe while expectations for June are being voiced ahead of the monomer settlements, as per ChemOrbis. Most players do not expect to see major changes next month while admitting that the recent movements in the upstream markets may lend support to hike targets to some extent. Spot ethylene prices on an FD NWE basis inched up for a second consecutive week to touch the €900/ton threshold. Higher naphtha costs were cited as the reason behind the slight firming in ethylene. Spot naphtha prices on a CIF NWE basis rebounded back to levels recorded at the beginning of 2014, supported by limited availability. A distributor concluded some deals with rollovers or small increases from April in Germany and Austria. The seller commented that some producers are likely to issue some increases at the beginning of June, but added that he anticipates a mainly stable trend. Another distributor in Germany reported, “Our West European supplier was initially seeking to raise their prices by €10/ton, but we conceded to rollovers later in the month in order to speed up our sales. We also expect to see rollovers in June.” A different distributor sold South European and locally-held Middle Eastern PE with rollovers or increases of up to €20/ton from last month in Germany while commenting that supply and demand is in balance. According to the seller, June will be a short month in terms of working days due to a number of bank holidays so he is unsure whether sellers may manage to achieve their hike targets. In France, a distributor concluded some late May deals with rollovers from last month while commenting that demand is normal. For June, the seller expects to see small hikes of €10-20/ton assuming that ethylene contracts may settle almost with rollovers from May. A packaging producer received May offers with increases of €10/ton and stated that he elected to skip making purchases this month due to his sufficient stocks. According to ChemOrbis, a pipe producer reported making some purchases with rollovers and discounts of €5/ton from April. “Our end product demand has been slow this month and we do not expect to see a notable improvement in June due to the bank holidays. We heard that a major West European producer may settle their June ethylene contracts with increases of €10-20/ton due to firmer naphtha costs,” he commented. Regarding gentlemen’s agreements, a German converter reported receiving May offers with small hikes of €10/ton on short availability, but added that he is negotiating to obtain rollovers. The buyer thinks that prices will remain mostly unchanged in June.