LLDPE moves below €1000/ton in Europe, eyes on awaited US PE cargoes
LDPE prices stand at their lowest levels in nearly 4 years in Europe
Apart from lower ethylene settlement, weak demand and abundant supplies continued to hold prices at multi-year lows despite sellers’ quests for a margin recovery.
According to ChemOrbis Price Index, the weekly average of spot LDPE prices both in Italy and Northwest Europe stand at their lowest levels in nearly 4 years.
LLDPE prices traded under the €1000/ton threshold in Northwest Europe
The LLDPE market saw three-digit prices for the first time in years. In the Netherlands, LLDPE was dealt below the €1000/ton threshold on local terms.
According to ChemOrbis Price Index, spot LLDPE prices have been on a bearish run since the start of the second half of 2018.
US mLLDPE arrives in Europe at competitive levels
Players also reported that mLLDPE prices from the US started to emerge at competitive levels.
Players think that the downward pressure will remain in place in the following months as more US PE cargoes are awaited to hit Europe.
HDPE still shines out as the firmest PE grade, will it follow other grades lower?
Balanced supply-demand dynamics have supported HDPE prices so far. A distributor confirmed that the downward pressure on HDPE prices is more moderate than it is onLDPE.
However, a player argued that the HDPE market may also face a downward pressure from the US in the next months.
PE sellers aim to avoid discounts beyond C2 drops
Sellers are not willing to concede to discounts beyond the ethylene drop, considering LDPE and LLDPE prices at multi-year lows, margin recovery concerns as well as the firmer energy complex.
Although some players voiced their early expectations for an upturn in February, widespread projections are calling for a mostly stable trend as the market might redress the balance between higher crude oil futures and weak market fundamentals.
A reseller in Italy said, “We expect to see a stable trend in February as PE prices might be under the pressure of the US PE cargoes.”
Will spring maintenances take the edge off the downward pressure on PE?
A number of crackers will be undergoing maintenance shutdowns in the second quarter of 2019, which will reduce the monomer availability in the region. This will also prop up the PE market, some argue. Several PE plants are slated to undergo maintenance works during the same period to coincide with the cracker shutdowns.
However, others argued that the arrival of US PE cargoes may offset the possibly reduced PE availability during the cracker maintenance period.
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