Petrotahlil - Spot LDPE, LLDPE rise more than €100 in 3 months
Spot LLDPE prices have gained more than €100/ton since March to currently climb to 10-month high in Italy while the 60% of this increase is mainly achieved in May.
Likewise, spot LDPE prices have risen by more than €100/ton in the past three months to reach the highest levels of the last 8 months. Furthermore, more than 50% of this cumulative increase is recorded this month.
LDPE, LLDPE hikes fueled by tightness
Sellers have sought monthly hikes of €40-50/ton for LDPE and LLDPE in an attempt to improve margins across Europe while some buyers have recently agreed to pay €40/ton higher. Players widely confirm the tightness for these two products, which helped sellers obtain more than the €30/ton increase in monthly ethylene contracts.
Comfortable supplies keep HDPE upturn somewhat in check
The HDPE film market, meanwhile, has also been steadily moving up since March with cumulative increases reaching around €80/ton on average in Italy.
Nevertheless, supply for HDPE products is considered comfortable and therefore, sellers could not push for margin improvement in this market. The index also suggests a €30/ton increase in May.
A compounder in Germany closed his deals for LDPE €40/ton higher, and HDPE film and injection €30/ton higher. “European producers may continue to have limited supplies in June and this may give them an upper hand in negotiations to push the market further higher,” he claimed.
Statistics for LLDPE imports sharply down in France, Netherlands
As for LLDPE, which is largely dependent on imported supplies, statistics suggest a drop in imports to Europe. This also explains the lack of LLDPE supplies across the region.
Although cumulative LLDPE imports of Germany were only down by 2% in January and February from the previous year to around 51,000 tons, the Netherlands witnessed a drastic yearly decrease of 45% to around 28,000 tons. In France, where statistics for the first three months were revealed, total imports show a year-over-year decrease of 13% to around 49,000 tons.
Crackers disrupted, lower PE production ensues
Production disruptions in several regional crackers have also resulted in a reduction in LDPE production, some players claimed. “Several buyers have limited their purchases. They have accepted to pay our hikes because of supply restrictions. If these concerns persist, the markets may remain stable to firm in the near term,” argued a trader in Italy.