PE prices in UK rise as currency falls, likely price increases in future

01-Jul-16

UK polyethylene prices have risen following reaction to the UK's Brexit vote last week to leave the EU, as per market sources in Platts. The Brexit vote led to a fall in sterling to Eur1.2166 on Wednesday from Eur1.3039 on June 22.
A UK-based trader said this week there was an expectation for a further price increase next month, particularly following the rise in the July ethylene contract price by Eur10 to Eur945/mt.
"I expect prices to increase a lot because of changes to the forex and the exit. The same thing happened last time when the forex dropped dramatically in October 2015," the trader said. He added that there would be a lag of a week or two before the effects were felt. Two other converters said they were braced for "significant increases" in polymer prices in the coming months.
UK low density polyethylene was GBP4 higher on the month to GBP1,222.50/mt FD UK, while the German LDPE price fell Eur10 on the month to Eur1,530/mt FD.