European polyethylene contract prices for November fell further this week as converters tried to narrow the gap between contract and spot prices, industry sources said.
Net contract prices were still higher than spot material available, sources said. In the LDPE market for instance, according to Platts data, the premium of contract price over spot touched a record high of Eur305/mt ($409/mt) on June 29, this has been reduced to Eur230/mt Wednesday. Converters looked to close this gap further, they said.
Converters tried to lever decreases in the contract price following the Eur20/mt decline in the feedstock ethylene contract price for November. With the expectation of a rollover or a "minor" drop in the December ethylene contract price, converters were "urgently" trying to use their bargaining power for November PE contracts.
Further upstream, average naphtha values in November have been "relatively stable" compared to October, triggering expectations of a rollover or a "minor" decrease for the December ethylene contract price. Naphtha has so far averaged Eur637/mt CIF NWE in November, down Eur6/mt on October's Average.
Although converters reported "better" end-user demand in November relative to September and October, they maintained that polymer end user markets were slow. Converters said that while order books for technical applications of stretch and shrink films were frail, demand was marginally better in flexible food packaging.
PE producers, on the other hand, were trying to restrict the price decline in contracts to the monomer drop of Eur20/mt.
LDPE CP price nudged down by Eur10/mt this week, representing a fall of Eur40/mt on the month. Prices were assessed at Eur1,270-1,275/mt FD Germany Wednesday.
LLDPE CP butene closed Wednesday at Eur1,150/mt FD NWE, dropping Eur10/mt on the week or Eur30/mt on the month.
In the HDPE contract market, injection and blowmolding grade prices were assessed down Eur10/mt on the week, representing a fall of Eur50/mt on the month at Eur1,255-1,260/mt and Eur1,250-1,255/mt FD NWE respectively Wednesday. Uni modal film was assessed at Eur1,180-1,185/mt FD NWE Wednesday, moving sideways on the week, and a fall Eur40/mt on the month.
