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Weak PE and PP demand in Europe led to increased exports

October 21/2011

(ICIS) -- Weak polyethylene (PE) and polypropylene (PP) demand in Europe has led to increased export activity and some low-priced spot deals at prices that many players consider below the current market level, sources said on Thursday. European demand is very disappointing, but we hope to reach our projected volumes by selling to export markets, said one producer.


Targeted markets include Africa and South America, with some volumes also secured to Asia, with low density polyethylene (LDPE) and PP seen as the most commonly traded material at present.


FOB) (free on board) levels below $1,400/tonne (?1,022/tonne) are said to be on offer for PP homopolymer, and levels barely above this level are said to be available for LDPE exports.


Most exports are being done directly from producers, without the involvement of traders, but some say current levels are too low for them, as it would be below variable costs.


European buyers and sellers are reluctant to push for a big price reduction in their monthly discussions with producers, as any price drop will have to be passed on to buyers own customers downstream, and would probably not generate increased activity, given the economic situation in Europe at present.


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Tags:PP, PE.
Category:General News
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