European linear low density polyethylene contract prices rose for the first time this month, as tightness from reduced imports and stockpiling ahead of an anticipated rise in ethylene tightened supply and boosted demand.
Platts assessed Germany FD NWE at Eur1,142.5/mt, up Eur5/mt week on week.
European imports of LLDPE collapsed 33% in 2014 compared with a year earlier, largely due to a sharp rise in import duty imposed at the start of 2014.
LLDPE pellets brought through customs fell to 759,166 mt in 2014, down from 1,140,146 mt in 2013.
Meanwhile, a sharp rise in the price of naphtha over the past month triggered fears of the ethylene contract price rising significantly for March compared to February.
With naphtha rising 23% to $509.75/mt from $413.25/mt when the February ethylene contract settled, buyers of LLDPE have rushed to build stocks.
A Total company source confirmed that order books across all grades of PE were closed, adding that demand was much stronger than usual, while other traders confirmed other oil majors had stopped taking orders, too.
Looking forward, the strong demand seen during February was expected to continue through March, producers said this week.
One producer said that inventories remained low despite some stockbuilding due to a run down of inventories that occurred at the end of last year.
– Platts.com
