MOSCOW (MRC) -- The November contract price of ethylene in Europe was agreed by EUR90/tonne lower compared to October. Nevertheless, despite such a major fall in feedstock prices, European producers intend to limit the decrease in export polyethylene (PE) prices for the CIS countries by EUR20-60/tonne, according to ICIS-MRC Price report.
A slump in oil prices has led to a similar fall in the prices of refined oil products. Thus, the November contract price of ethylene in Europe was agreed by EUR90/tonne below the October level. In their turn, European producers said they had a strong demand from the domestic market and restricted export quota. Therefore, they do not intend to reduce PE prices proportionally to the cuts in ethylene prices.
The import duty on PE for producers from the Gulf countries and Brazil was raised to 6.5% from 1 January 2014 , leading to lower imports to Europe. The weakening of the euro in recent months has made imports even more unprofitable. And European producers managed to completely balance the market by reducing their capacity utilisation.
Low capacity utilisation and strong demand from the domestic market for several months were the cause of limited export quotas of European producers, particularly, for low density polyethylene (LDPE) and pipe grade high density polyethylene (HDPE).
Nnegotiations over November export prices of European PE began this week. Deals for HDPE were negotiated in the range of EUR1,160-1,200/tonne FCA, down by EUR20-40/tonne from October. Deals for LDPE were negotiated in the range of EUR1,200-1,260/tonne FCA, down by EUR40-60/tonne from October.