European low density polyethylene spot prices have come under pressure as converters step out of the market amid faltering end-user demand that could see stocks last longer than expected, sources said.
Also, the sources said, a downturn in geopolitical risk has weighed on feedstock prices — hydrocarbons like naphtha are used to produce ethylene, the feedstock for LDPE, adding there were few short positions in the market needing to be covered.
Naphtha prices were assessed at $919/mt CIF NWE on Wednesday, down from $942.50/mt CIF NWE a week ago, while ethylene spot prices were down Eur20/mt ($27/mt) on the week at Eur1,115-1,120/mt FD NWE.
“LDPE is not short anymore in Europe. Even LDPE with additives does not carry a premium any more,” one trader said, adding that, given there were production issues, some local producers were still bullish.
“It is good for us that there are a few production issues in the market, otherwise the market would have been in a surplus,” a distributor said.
Dow’s Tarragona cracker in Spain was heard to be still offline after an unplanned outage. A source had said it will be shut for the first half of the month.
Elsewhere, SABIC said its Olefins 4 cracker at Geleen in the Netherlands started maintenance last week and sources said Ineos’s No.5 cracker in Cologne, Germany, also began planned work last week.
A converter said some traders were distressed, with prices being offered to him this week falling to Eur1,380-1,390/mt FD NWE.
He said while European producers were offering product over Eur1,400/mt FD NWE, the expectation was that prices would fall.
“It is too early to say whether we will see a downward correction in prices. The deal we did at Eur1420/mt FD NWE maybe cannot be repeated this week, but we have not been actively offering,” a producer said.
Prices were assessed down Eur10/mt week on week at Eur1,380-1385/mt FD NWE on Wednesday.
Source: platts.com
