Market and product
NWE PE prices rising on tight supply fundamentals
Tight supply fundamentals in the European polyethylene market aredriving price increases, industry sources said this week.
Low density polyethylene spot prices were assessed at Eur1,302.50/mt($1,604/mt) FD NWE Wednesday, up Eur10/mt on the week. LDPE contract priceswere up Eur40/mt on the week to Eur1,352.50/mt FD NWE.
The spike was partly attributable to European producers maintaining lowruns to avoid costly inventory builds as feedstock prices rise.
"We have learnt our lesson from 2011, when we ended the year with highinventories. We do not want a repeat of that this year," one producer said.
Feedstock naphtha prices accelerated to 921.75/mt CIF NWE Wednesday,gaining $68/mt on the week.
European producers were heard contemplating order stops on Augustdeliveries because of "unusually buoyant" demand.
Congestion in the Middle East transport system due to Ramadan was alsodelaying deliveries of imports, sources said. They added that while currencymovements and increases in European prices made Europe an attractive exportdestination, the congestion and long lead time from Asia had dried up importsfor prompt delivery.
On the buying side, converters said that the demand outlook remainedvulnerable, particularly in Southern Europe.
"Demand to carry on these increases isn't present," a specialized filmconverter said, adding that improvement in buying activity since end July wasdriven by depleted stock levels.
"Demand for high value brands in detergents, lubricants, personal care,pharmaceuticals and food is down this year, especially in the south ofEurope," another converter said.
Low density polyethylene spot prices were assessed at Eur1,302.50/mt($1,604/mt) FD NWE Wednesday, up Eur10/mt on the week. LDPE contract priceswere up Eur40/mt on the week to Eur1,352.50/mt FD NWE.
The spike was partly attributable to European producers maintaining lowruns to avoid costly inventory builds as feedstock prices rise.
"We have learnt our lesson from 2011, when we ended the year with highinventories. We do not want a repeat of that this year," one producer said.
Feedstock naphtha prices accelerated to 921.75/mt CIF NWE Wednesday,gaining $68/mt on the week.
European producers were heard contemplating order stops on Augustdeliveries because of "unusually buoyant" demand.
Congestion in the Middle East transport system due to Ramadan was alsodelaying deliveries of imports, sources said. They added that while currencymovements and increases in European prices made Europe an attractive exportdestination, the congestion and long lead time from Asia had dried up importsfor prompt delivery.
On the buying side, converters said that the demand outlook remainedvulnerable, particularly in Southern Europe.
"Demand to carry on these increases isn't present," a specialized filmconverter said, adding that improvement in buying activity since end July wasdriven by depleted stock levels.
"Demand for high value brands in detergents, lubricants, personal care,pharmaceuticals and food is down this year, especially in the south ofEurope," another converter said.
