European polyethylene (PE) prices have risen for the first time since June 2018.
Some traders breathed a sigh of relief.
“The past few months have been really tough and prices have been falling,” one of them said.
Another trader said, “It’s great to hear that after several months of decline.”
The last time most PE prices rose was in June 2018.
For several months, some PE spot prices have been lower than contract prices for ethylene.
Since July 2018, the spot low-end price of low-density polyethylene (LDPE) has been significantly lower than the contract price of ethylene, and the net low-end price of C4 (butenyl) linear low-density polyethylene (LLDPE) has performed worse.
The last time the spot low price of C4 LLDPE was higher than the contract price of ethylene in March 2018, the upward pressure was the greatest in March, because there were fewer imported materials available.
Most of the low density polyethylene C4 used in Europe is imported, so the relationship with ethylene may not be the same as other brands, but the price of global exports to Europe has been very low.
Last week, spot prices of C4 LLDPE fluctuated sharply, some quotations were still below the level of ethylene contracts, and some buyers were forced to raise prices substantially to get the volume they needed.
The net price of LDPE has also risen, with FD quoting more than 1,000 euros per ton in Northwest Europe.
Low density polyethylene (LDPE) and C4 low density polyethylene (C4 LLDPE) are in short supply due to production problems and reduced imports. Although some buyers have to accept higher prices, they are well supplied.
High density polyethylene (HDPE) has mixed tastes. The price gap between ethylene and HDPE has always been higher than LDPE and LLDPE, but sellers are also pushing up prices.
Rising prices and weak demand
Despite the sharp rise in prices, demand from smaller sellers did not all improve in March.
One of them said: “Prices are rising, but sales are not. There is no shortage of anything and not many customers want to buy it.
Big customers may sell better, and some buyers are making sure their needs are met once the plant maintenance plan is in place.
Sources said May was an important month for ethylene supply, but they also expected that as long as everything went according to plan, there would be no shortage.
Some sellers had predicted price increases of up to 50-70 euros per ton, but buyers were very skeptical that the price would not be higher than the increase in the contract price of ethylene.
PE negotiations usually take a long time to reach an agreement, and retrospective pricing still exists in many regions.
PE is used in packaging, household goods manufacturing, and also in the field of agriculture.