Plastic World

Will hike targets fail in Europe's PE market?
Updated on: 08/11/2018
In Europe, initial PE offers for November emerged with mostly rollovers to modest hikes following the lower ethylene settlement. Although two producers continue to stand firm on their hike targets of €40-70/ton for LDPE, players think large hikes will not be absorbed. 

These producers aim to hike their prices especially for LDPE and LLDPE, pointing to the narrowing gap between the ethylene contract level and PE prices.

A reseller from Italy commented, “Our supplier might apply large increases, which we are not willing to pay. We are offering with rollovers from our existing stocks. Buyers are also taking a waiting stance as they are sure that increases are not workable.”

Despite their earlier expectations for large hike intentions, some sellers have adopted a more moderate pricing policy in line with buyers’ resistance. A South European producer approached the market with small increases of €10/ton for all PE grades except for LDPE, which was rolled over.

At this point, more players appear to be acknowledging that large increases are highly likely to wane in the midst of slow end business markets as well as ample supplies. Buyers are not willing to pay hikes ahead of the year-end, when most sellers deplete their stocks.