Some Europe PE sellers gear up for higher prices on feedstocks, outages

Higher feedstock prices, some pre-buying in the UK, several planned cracker outages, and a force majeure at a major plant are leading some polyethylene (PE) sellers in Europe to expect higher prices in March. Net prices are also lower than the ethylene contract in some cases. A couple of producers have already closed order books on some PE grades, and one has said extra volumes for February will incur a surcharge of €50/tonne. Some spot prices are looking up, but sentiment is also weighed down by fresh import volumes from the US, and not all sellers are convinced prices will go up in March. Brent crude prices have increased steadily in recent weeks and, while naphtha has been lagging behind, an upturn has been seen there too. Any move in naphtha will be used as an argument for price moves in the upcoming ethylene contract for March, and any move in the ethylene contract is likely to influence pricing in the PE market. Some buyers have ethylene-linked PE contracts, so any monomer move automatically transfers to these PE prices.