Published On: Tue, Mar 31st, 2015

European PE producers aim for three-digit hikes for 2nd month

According to ChemOrbis, the European PE market is seen extending its upward trend into April as producers are aiming for three-digit hikes for a second consecutive month despite the relatively slower gains in the upstream market. An initial April ethylene contract settled up €35/ton from March towards the end of last week while the contracts are yet to be finalized.

Hike requests for PE were already expected to outpace the increases in feedstock costs given rising supply concerns. Following Borealis, Versalis and LyondellBasell, SABIC also declared force majeure on the output from its LDPE/HDPE swing plant in Gelsenkirchen, Germany, according to market sources. The company reportedly faced technical issues at their 175,000 tons/year plant. As a result, almost 1.4 million tons/year of PE capacity in Europe has been impacted by these force majeure declarations.

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European PE producers aim for three-digit hikes for 2nd month

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A West European producer announced their initial April PE prices with hikes of €130/ton both in the contract and spot markets. A source from the producer reported, “Supply is quite tight and we think that ethylene contracts will be finalized with increases larger than €35/ton.”

After settling their March PE contracts with increases of €120-130/ton, a South European producer announced their new April PE prices with hikes of €100/ton for LDPE and LLDPE and by €130/ton for HDPE. A producer source cited higher feedstock costs and short supply as the main reason behind their sharp hikes.

A distributor in Italy lifted his Middle Eastern HDPE prices by €100/ton for April citing tight supply from his supplier as per ChemOrbis. Another distributor expressed his April sell ideas with increases of €60/ton for West and South European PE and added that he is yet to contact his suppliers. The seller commented, “We heard talks of €100/ton increases while we are unsure whether such hike requests will receive acceptance from buyers considering the €35/ton rise in the initial ethylene settlement.”