Despite low demand for European PE, prices cannot go any lower as PE, ethylene spread narrows, crude and naphtha prices stay robust, industry players say; most spot PE prices currently below headline ethylene contract price of €1,095/tonne FD NWE

Lorena Madrigal

LOS ANGELES , November 18, 2011 (Industry Intelligence) – Despite the bleak outlook for European polyethylene demand, industry sources say that prices cannot go any lower as the spread between PE prices and ethylene prices narrow and the prices crude and naphtha continue to be robust, ICIS news reported Nov. 18.

While one PE producer said keeping production rates low should maintain stable prices. Another producer said the industry expects prices in December to stay the same from November. A slight increase of between €10 per tonne ($14/tonne) and €20/tonne may come in January or February as producers are beginning to see some uptick in demand for January.

Most spot PE prices in Europe are currently below the headline ethylene contract price of €1,095/tonne free delivered Northwest Europe--a situation that is not sustainable over the long-term.

Commodity prices for LDPE and linear low density C4 have reached a 22-month low at €1,040/tonne FD NWE and €1,000/tonne FD NWE, respectively.

The primary source of this article is ICIS news, Sutton, England, on Nov. 18, 2011.

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