European polypropylene and polyethylene producers are targeting a May contract price increase because of low stock availability and seasonal demand, sources said.
PE producers were aiming for increases of Eur20-60/mt ($28-83/mt) and PP producers were seeking Eur50/mt, sources said. The April PP contract price settled at Eur1,455.5/mt FD NWE and the April low density polyethylene contract price at Eur1,442.5/mt FD NWE
The aim of an additional Eur50/mt on the PP contract price came despite the May propylene contract price only settling Eur10 higher on Wednesday at Eur1,150/mt FD NWE.
The rise in the propylene CP contrasted the fall in the ethylene CP, which also fully settled on Wednesday at Eur1,160/mt FD NWE, a decrease of Eur5.
Despite the fall in the ethylene contract price, PE producers were targeting a rise of between Eur20-60/mt, citing low stocks and a need to build margins. The need to build margins has been mentioned by a number of polyolefins producers since the beginning of the year.
However, the premium of PP to propylene was Eur297/mt for the first quarter, which is the highest for Q1 since 2011. Similarly, the Q1 premium of LDPE to ethylene was Eur270/mt, which is also the highest for a Q1 since 2011.
The recent uptick in naphtha has added to polyolefins producers' bullish outlook. Naphtha was assessed at an average of $926/mt CIF NWE in April, compared with March's $911/mt.
Polyolefin converters have yet to express their expectations for May contracts.
Naphtha and other hydrocarbons are feedstocks for olefins like ethylene and propylene. Ethylene and propylene are feedstocks for polyolefins like PE and PP.
