Europe PE, PP buyers worry that price increases in September could lead to future crash; propylene contract prices for September rose €60/tonne from previous month to €1,150/tonne, ethylene contract prices up €50/tonne to €1,260/tonne

Allison Oesterle

September 26, 2013 (ICIS Chemical Business (CBNB Abstracts)) – Buyers of polyethylene (PE) and polypropylene (PP) are worried that the upward price momentum indicating huge increases in Sep 2013 could result in a crash in the months that follow. Polymer markets were monitoring the results of monomer contract negotiations. The settlement of European propylene contract price for Sep 2013 was at EUR 1150/tonne, an increase of EUR 60/tonne from the previous month. On the other hand, ethylene monthly contract for Sep in Europe was at EUR 1260/tonne, an increase of EUR 50/tonne from Aug. Polymer buyers fear of having too much of high-priced inventories in such an uncertain situation. The worry was that the prices of naphtha might drop as quickly as these have risen. Majority of producers were waiting for concrete prices before announcing Sep polyolefin pricing ideas, but modest increases are expected. Converters believe that price increase is inevitable; however, they questioned the magnitude of the hike of Sep monomer pricing. In a graph, entitled Europe polymer prices, it can be observed that polyethylene and polypropylene prices have been unstable in the period Sep 2012-Aug 2013. The graph shows the spot FD NWE prices of LDPE for GP film and polypropylene for homopolymer injection. Original Source: ICIS Chemical Business, http://www.icis.com/, Copyright Reed Business Information Limited 2013.

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