Europe PE market visibility murky for September

Polyethylene (PE) players are looking toward September, with expectations of more material arriving from the US and demand remaining uncertain.

A series of planned and unplanned cracker outages has not had much impact on the European ethylene or PE markets. Spot ethylene has traded at contract minus 13.5-14% this week

Low end PE spot prices remain below the current ethylene contract price in most cases, and offers of US material are keeping pressure on the market, particularly in the high density polyethylene (HDPE) sector.

Competition between US sellers in Europe is adding to the cautious attitude seen in August.

Low demand is also a feature of the market.

“Volume in the market is down significantly,” said one large PE buyer.

End-month August PE settlements are now being done, and some buyers are reporting a drop of €10/tonne, slightly lower than the rollover that was offered earlier in the month, in spite of a similar increase in the August ethylene contract.

Some buyers are expecting to be faced with a price hike in September, as cracker outages potentially tighten upstream supply but, with naphtha down by close to €50/tonne lower than when the August ethylene contract settled, a decrease in the September contract is unlikely to lead to a PE increase.