European Polyethylene And Polypropylene Market Is Booming

　　 London (ICIS) - European polyethylene (PE) and polypropylene (PP) buyers are unable to ensure that raw materials are purchased at a low price at the end of 2010, because most products have limited supply, market sources said on Monday. Buyers have been looking forward to easing this temporary high price, but clearly the high price is the general trend this year. However, the new production capacity in the Middle East has been postponed, and European output must be carefully monitored. Last month, France was restricted by strike production, which meant that most polyethylene and polypropylene products would not be oversupplied. The supply of global low-density polyethylene (LDPE) products is limited, and buyers in Europe even face higher quotations in November. Although there are two new ones. low density Polyethylene production capacity opened in Sweden and the United Kingdom. The capacity for permanent closure in 2009 has not yet fully recovered, especially for British buyers in November. "Our bid has increased by 50 pounds / ton (US $81 / ton, 57 euro / ton), which is the highest price we can afford." A large British PE buyer said. One major producer agrees: "low density in Britain. polyethylene The total price is 80 pounds / ton, if the buyer can not accept it, then we will not sell it. "

along with Pound Falling against the euro, the price of the UK has been lower than those of the European continent. But in the European continent, buyers are also under pressure from rising prices. In Europe, many LDPE has traceability, although the product has been shipped, but the price stays at the end of the month, which means that the discussion on the price negotiation has been delayed and not yet fully implemented, but the upward trend is obvious. "They are talking about adding 20 euros / ton to the November contract, but I will strive for a roll over. There is no reason why prices will rise. Their profits are enough, "said a medium-sized buyer. However, producers complain that profits are squeezed by rising prices of crude oil and naphtha. The weakening of the US dollar has a relief effect on the high price of the upstream, but the cost is higher. With the Brent crude oil reaching US $87.65 / barrel on Monday, the price of naphtha to northwest Europe is 784-794 dollars / ton.

High density polyethylene (HDPE) and polypropylene are also stronger than most buyers expect. "We cannot maintain extra production at the same price," said a buyer of a large HDPE blow molding method. The HDPE blow molding method to the northwest Europe price is less than 1000 euro / ton (free shipping), but the spot market quotation is higher than 1000 euro / ton. Similar cases also occur in the HDPE injection and film industry. "I expect this situation to be eased in December," said a large HDPE jet buyer. "But I hope there will be no more than 30 euros / ton decline now. Of course, I do not think there will be a reduction of 100 euros / ton."

Compared with some PE level products, there are more imported PP available, but the price is stable, and the net price to the northwest of Europe is less than 1120 euros / ton (free shipping). Some PP producers even agreed that the price increased slightly, and the propylene monomer contract price rose by 18 euros / ton in November. Some sources attributed the strength of the current market to the impact of the October strikes in France.

　　 According to market sources, the only weaker PE product is C4 linear low density polyethylene (LLDPE). Low density polyethylene (LDPE) and C4LLDPE have grown from the traditional 50 euro / ton gap to 150 euros / ton. Most people say they expect this gap to continue because the new capacity is already formed in Europe.