Volumes of European LLDPE imports in June down 40% year-over-year, driving tightening of supply, rising prices; Europe had seen strong demand since May 2013

, September 17, 2013 () – The volumes of linear low density polyethylene (LLDPE) being imported into Europe are decreasing, leading to supply tightness and consequently higher prices. Data from Eurostat revealed a 40% drop in LLDPE imports into the EU in Jun 2013 compared with Jun 2012. This is making a huge effect on availability and pricing because Europe is a major net importer of the material. Europe has been seeing strong demand since May 2013, in the wake of quite weak volumes for several months. Cracker and polymer yield has been carefully set to keep them aligned with demand, given high upstream costs. Few players have the capability to maintain huge inventories, which are closely controlled along the chain. The reason for import reduction has been questioned. Truck deliveries were affected by shorter working hours and port congestion was reported in Saudi Arabia as a result of the recent religious holidays in the Middle East. Others cited lower demand in Europe as the reason for the lower imports, although this could not be verified. LLDPE sellers in Europe have focused on speciality grades in view of a significant rise in LLDPE capacity from low-cost producers, mostly in the Middle East. Producers are sure of additional price hikes in Sep 2013, after increases of EUR 40-60/tonne the previous month. Spot prices of LLDPE C4 were trading at roughly EUR 1320-1330/tonne FD NWE on 19 Aug 2013 on a net basis. This compares to a low of EUR 1260/tonne FD NWE in mid-Jul 2013. A table shows permanent closures of PE plants in Europe. These include the closures of the 190,000 tonnes/y HDPE plant of Dow in Tessenderlo, Belgium, in end-2012; the 100,000 tonnes/y HDPE plant of LBI in Wesseling, Germany, in 3Q 2013; and the 150,000 tonnes/y LLDPE plant of Versalis in Priolo, Italy, in Sep 2013. Original Source: ICIS Chemical Business, http://www.icis.com/, Copyright Reed Business Information Limited 2013.

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