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(ICIS) -- European polyethylene (PE) buyers are facing yet more price
rises for next month following a ?27/tonne ($36/tonne) increase in December's
ethylene monomer contract, market sources said on Monday.
The average November naphtha cracker contract margin was on a par with
that seen in March - and second only to January, the worst margin month in 2010
to date - following a sharp rise in naphtha prices and a drop in the dollar
versus euro rate.
Dow had already announced a ?70/tonne increase for all
its December PE sales before the ethylene contract was settled, and others now pitched
in, anxious to recover increased costs.
This price hike announcement had been met with a great deal of scepticism
by much of the market, but it was being followed by other producers who did not
intend to lose margin further in December. With some grades of PE becoming
increasingly tight, some sources said that it was not such an outlandish move
after all.
Net LDPE prices for monthly business were around
?1,280/tonne, while spot prices were moving higher, above ?1,300/tonne FD NWE in
some cases, where buyers could find no alternative supply.
High density PE (HDPE) grades were also getting tight, particularly HDPE
injection melt flow index 7, and also blowmoulding. Some sources were beginning
to wonder whether production had been cut back for these grades as the market
was showing signs of shortage.
mrcplast.com
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