High European polyethylene prices are attracting import offers for October delivery from Asia and the Middle East, industry sources said this week.
According to Platts data, low density FOB NWE prices have steadily climbed after touching 2012's low of $1,227.50/mt June 1. Prices in Asia that day were at $1,240/mt CFR FE. However, since then a clear divergence has emerged with European FOB NWE accelerating to $1,737.50/mt Wednesday, while the Asian price had moved up only to $1,294/mt CFR FE Asia.
"We have begun destocking in September with the import offers clouding expectations of another big increase," a converter said. "We are not in a hurry to buy and availability seems plentiful in October."
Converters said they were receiving imports spot offers from the Middle East, Korea, Thailand and China for October deliveries for most PE grades.
The soaring value of the euro against the dollar was supportive of the open arbitrage economics, sources added.
PROMPT SUPPLIES REMAIN TIGHT
Prompt supplies, however, for most PE grades remained tight with a spate of production issues and cracker turnarounds.
Four steam crackers combining 2.67 million mt of ethylene capacity are in maintenance from August-October: Total Petrochemicals and Ineos' Naphthachimie steam cracker in Lavera, France; LyondellBasell's Wesseling cracker in Germany; Borealis' Porvoo steam cracker in Helsinki, Finland, and the Shell and ExxonMobil jointly owned ethane cracker at Mossmoran in Scotland. In addition three NWE petrochemical producers are currently on allocation for high density PE supplies due to production issues.
Sources said that linear low density PE C4 remained tight, with converters looking to replace immediate needs with near to prime LLDPE C6 or metallocene. Prompt LLDPE offers were heard at Eur1,430-1,480/mt FD NW, in line with LDPE offers.
HDPE injection and blowmolding were heard offers at Eur1,420-1,500/mt FD NWE. "Injection molding melt 4 and melt 8 are on allocation from several producers and [are] very scant," a trader said.
NWE PE producers said that they expected the market to remain a "European game" till import arrivals in October. The added that their utilization rates were reduced to keep inventories under control due to pressure on margins which was adding to prompt tightness in the market.
