European polyethylene spot prices are being weighed down as sellers step into the market to liquidate positions in an environment of falling feedstock prices and slack end-user demand, sources said.
Feedstock naphtha was assessed below $1,000/mt CIF NWE Wednesday for the first time since February 8, to close at $997.50/mt. Down the chain, ethylene spot offers fell to Eur1,200/mt ($1,576/mt) FD NWE, and there were widespread expectations of a rollover for the May contract price, sources said.
In the PE spot market, comparably high prices in Europe continued to attract offers from Asia, the Middle East and North America. Re-export offers were mainly heard from China, sources added.
In the low density polyethylene spot market this week, sources reported that competitive offers from Turkey were heard at Eur1,350-1,370/mt FD NWE.
Offers continued to trickle in from Asia and the Middle East too at Eur1,370-1,400/mt FD NWE, with European product being offered at Eur1,400/mt FD NWE.
In the linear low density polyethylene C4 spot market, competitive offers were heard from Kuwait at Eur1,200/mt CIF NWE.
Another Middle Eastern producer reported offering at Eur1,320/mt FD NWE. "Most offers are at Eur1,300-1,320/mt FD NWE and while availability has improved, there is some tightness in the market," a trader said.
In the high density polyethylene spot market, European producers stepped into the spot market after being absence since the beginning of the year.
For injection grade, European product was heard being offered at Eur1,360-1,370/mt FD NWE.
"Offers for near to price have gone to Eur1,280/mt FD NWE. We expect prices to go even lower so we are not buying," one converter said.
"Communities and municipalities are not buying dustbins and crates, which has hit demand," one producer said.
In the blowmolding market, offers came down to Eur1,370-1,380/mt FD NWE.
HDPE blowmolding grade 5502 was heard being exported from America into Europe. Re-export offers from Asia also weighed on prices.
In the film market too spot prices came under pressure. Improved availability in the HDPE bi-modal film market exacerbated the slide in prices, sources said. Bi-modal film offers were heard at Eur1,370-1,380/mt, while uni-modal film offers had slipped below Eur1,350/mt FD NWE.
In the downstream market, converters reported that inflationary pressure had begun to choke end-user demand.
Converters have begun or are mulling destocking as fears of further prices increases abated, sources said.
"Europe end-user demand is not strong enough to sustain prices that we have right now," a converter said, adding that post Easter holidays order intake was lower from all areas of production.
"Demand for defensive sectors like pharmaceutical and high value medical applications and seasonal sectors like agriculture is fairly reasonable," one converter said.
"For the first time in 35 years we have no orders from the building industry," a converter said, adding that even food packaging was starting to feel pressure of dull demand.
