5 June, 2018
In Europe, PE suppliers have announced initial June offers with increases mostly beyond the monthly monomer hikes of €63/ton in line with the widespread expectations. Although the upward pressure on LDPE and LLDPE prices, which recently hit a more-than-three-year low, was more visible; ampler availability for those was an obstacle in front of larger hike attempts.
Accordingly, a South European producer revealed its initial PE offers for June with increases of up to €100/ton while sellers in the distribution channel started to offer mostly with increases of €70-80/ton.
They are now waiting for the reaction of the market, which has not been satisfactory so far. A large-scaled distributor opined, “The state of demand will determine whether large increases pass on June deals or not.”
Although sellers’ margin recovery intentions are supported by higher upstream costs, the prevailing market conditions are not deemed as convenient to allow them to achieve initial hike attempts. A seller who started offering with €80/ton increases for all PE grades admitted, “Demand is still weak and large increases therefore might not work.”
Regional buyers do not seem to be in a rush to buy as they expect competitive offers to emerge as the month wears on. In Italy, a distributor projected, “Considering weak demand and the ongoing ample availability, June deals might be closed with smaller increases of €30-40/ton instead of initial €80/ton hikes.”