European polypropylene and polyethylene producers are targeting a May contract price increase because of low stock availability and seasonal demand, sources are reported in Platts.
PE producers were aiming for increases of Eur 20-60/mt (US$28-83/mt) and PP producers were seeking Eur50/mt. The April PP contract price settled at Eur 1,455.5/mt FD NWE and the April LDPE contract price at Eur 1,442.5/mt FD NEW.
The target of an additional Eur50/mt on the PP contract price came despite the May propylene contract price only settling Eur10 higher on Wednesday at Eur1150/mt FD NWE. The rise in the propylene CP contrasted the fall in the ethylene CP, which also fully settled on Wednesday at Eur1,160/mt FD NWE, a decrease of Eur5.
Despite the fall in the ethylene contract price, PE producers were targeting a rise of between Eur20-60/mt, citing low stocks and a need to build margins. The need to build margins has been mentioned by a number of polyolefins producers since the beginning of the year.
However, the premium of PP to propylene was Eur297/mt for the first quarter, which is the highest for Q1 since 2011. Similarly, the Q1 premium of LDPE to ethylene was Eur270/mt, which is also the highest for a Q1 since 2011.
The recent uptick in naphtha has added to polyolefins producers' bullish outlook. Naphtha was assessed at an average of US$926/mt CIF NWE in April, compared with March's US$911/mt.
Polyolefin converters have yet to express their expectations for May contracts.
03-May-14 
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