MOSCOW (MRC) - European makers aim to increase export prices of polyethylene (PE) by EUR140-210/tonne for August. Some market participants doubt that they will be able to achieve the wishful result, according to MRC analysts.
On rising oil quotations ethylene contract price in Europe for August was increased by EUR140/tonne, from July. However, despite this, many European makers have to raise the export prices of polyethylene for August by EUR140 - 210/tonne, while export quotas are still limited.
The June drop in prices of oil and low demand for polyethylene in Europe in the first half of the year have forced local producers to decline prices seriously. The contract price of ethylene in July was reduced by EUR170/tonne, from the June level. European makers, in turn, were forced to drop prices of polyethylene EUR70-170/tonne. Export offers for July shipment of European HDPE fell on average to EUR1,000-1,080/tonne, FCA. Some deals in the supply of LDPE reached the level of EUR900 - 940/tonne, FCA.
A serious fall in the price of polyethylene has intensified the demand in July. Local converters, and companies from foreign markets have been actively buying European material. As a result, by mid-July, many European makers sold the August volumes, and were forced to suspend further deals.
European makers aim a more serious rise in prices for August on the back of a significant increase in the price of ethylene and July sales. Export prices of polyethylene for the CIS markets are increased on average by EUR140-210/tonne, from July, depending on the grade of polyethylene. Price quotations of HDPE were at EUR1,200-1,280/tonne, FCA.
However, some market participants doubt that European makers will be able to achieve such a serious rise in prices. This significant increase in the price dictated by the desire to offset the price decline in July, and, very importantly, not supported by the real growth in demand for polyethylene.
MRC