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Europe PE spot prices soar as sellers withdraw from market

December 15/2010

(ICIS) -- Polyethylene (PE) buyers in Europe who are trying to obtain extra volumes in an effort to avoid higher prices in January face increased spot prices from traders and closed order books from producers, market sources said on Wednesday.


December monthly business was progressing normally. Many large retroactive accounts had not yet settled, and there were expectations of price increases of ?30/tonne ($40/tonne) from November, which would cover producers increased ethylene costs.


Extra sales, on top of contractual volumes, were reported at much higher levels, particularly for low density PE (LDPE) and high density PE (HDPE) injection grades.


LDPE gross contractual prices were now reported above ?1,400/tonne FD (free delivered) NWE (northwest Europe), netting back to around ?1,300/tonne in some cases as discounts were applied.


Many sellers had taken the decision to hold on to inventories and sell at higher prices in January. As a result, when there was material available, spot LDPE prices were now being offered at ?1,340-1,350/tonne FD NWE on a net basis. In comparison, November spot LDPE levels had been trading at ?1,230-1,240/tonne FD NWE.


Price increases were most pronounced in the HDPE sector. After trading around the ?1,000/tonne FD NWE level for many months, HDPE injection prices now traded as high as ?1,160/tonne FD NWE on a net basis. Several buyers said that they were unable to get all the extra volumes they needed.


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