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Offers of polyethylene from China to Europe have grown quickly

March 22/2011

(ICIS) -- Offers of polyethylene (PE) from China to Europe have grown quickly as prices in Europe rise and those in Asia remain flat, sources said on Tuesday.

An HDPE buyer, who admitted paying well above ?1,300/tonne FD (free delivered) NWE (northwest Europe) to its European supplier, said: I have been offered product at ?1,250/tonne [DDP]. The sticking point for buyers to accept offers from overseas sellers is the amount of time it will take for the material to arrive.

The trader said the minimum amount of time it would take to receive material would be six weeks, plus time for clearing and loading the material onto pallets. If you ask me, its closer to eight weeks than six in total. Sailing time alone is six weeks, the trader said.

A major European producer agreed with the trader, adding that that April would be another strong month. We expect a slender increase in the April ethylene monthly contract, and we will go for margin improvement in HDPE. Product is still tight and imports wont arrive before May, the producer said.

Not all European producers are expected to target margin improvement in April, however. Some major sellers had aimed to cover just the increase in ethylene in March, and they are also expected to follow this strategy in April, maintaining that the PE market cannot support continued price hikes, which have led to record high prices for some grades.

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