European linear low density polyethylene and LDPE spot prices fell for the first time in two and a half months this week due to destocking, industry sources said.
LLDPE and LDPE spot prices shed Eur25 ($32.38) and Eur50 week-on-week to be assessed at Eur1,400-1,405/mt and Eur1,350-1,355/mt FD NWE, respectively, on Wednesday.
Converters said that high raw material prices were deterring them from running at high utilization rates.
"Some of our machines are on standstill as our customers don't want to pay these high prices," one converter said. "We don't want to overstock on finished product on either industrial or consumer packaging," another converter said. Bearish expectations for October deterred incremental buying.
Price expectations for October were bearish because feedstock naphtha tumbled by $90.75 week-on-week to be assessed at $908.25/mt CIF NWE Wednesday. Naphtha followed benchmark crude futures lower, which were down on a build in US crude stocks, fears about the the fragility of the global economy and indications that Saudi Arabia was pumping more oil to bring down prices.
"Offers [in the spot market] are cheaper this week as traders and distributors are trying to sell June-July positions aggressively," a converter said.
"There are still orders for the first half of October, but for the second half of October inquiries have gone silent," a trader said.
Supply conditions were described as more relaxed. "I feel that distributors are still waiting for LLDPE containers from the Middle East and are constrained on volumes. However, demand is not high," a converter said.
Another converter said that he struggled on carrier bag production at the beginning of month due to tight butene availability but added that he refused to pay some of the high prices being offered.
