European PP, PE prices could hit peak as oil prices ease and European and Asian prices diverge, say buyers; producers point to lower production, inventories bolstering pricing

Philip Goldsmith

Philip Goldsmith

LOS ANGELES , April 16, 2012 () –

Prices for polyethylene (PE) and polypropylene (PP) in Europe could be approaching the top of the current cycle this month, based on what happened in 2011, say buyers, reported ICIS news on April 13.

Crude oil prices are falling and the difference in pricing in Europe versus Asia is nearing the same level as when prices for some grades dropped last year. May and June are being watched by many market players.

With buyers expecting prices to decline in May, their orders are off and they are whittling down inventories. Demand this month also is lower due to holidays throughout Europe, according to the Surrey, England-based chemical news service.

However, pricing is not expected to collapse in May and June, despite weak orders in April, said most sources. Some buyers, though, have bought for May to try to push European suppliers to drop their prices, ICIS reported.

Producers say the situation currently is different than in 2011. Last year, production was high due to strong margins, but now margins “only just moved into positive territory,” said a producer, noting that supplier inventories are “under control.”

European imports have been normal for prompt delivery. With Iranian volumes expected to be unavailable in May and traders hesitant to bring material into Europe for May delivery, producers feel reassured, reported ICIS.

Currently, net homopolymer PP injection prices are at €1,330 (US$1,748) to €1,350 per tonne, free delivered (FD) to northwest Europe (NWE). This is up from €1,045/tonne FD NWE in early December, after prices had fallen from a 2011 high of €1,410/tonne FD NWE.

A similar trend in pricing occurred for PE, ICIS reported.

The primary source of this article is ICIS news, Surrey, England, on April 13, 2012.

 

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.

Share:

About Us

We deliver market news & information relevant to your business.

We monitor all your market drivers.

We aggregate, curate, filter and map your specific needs.

We deliver the right information to the right person at the right time.

Our Contacts

1990 S Bundy Dr. Suite #380,
Los Angeles, CA 90025

+1 (310) 553 0008

About Cookies On This Site

We collect data, including through use of cookies and similar technology ("cookies") that enchance the online experience. By clicking "I agree", you agree to our cookies, agree to bound by our Terms of Use, and acknowledge our Privacy Policy. For more information on our data practices and how to exercise your privacy rights, please see our Privacy Policy.