London- SABIC Europe announced today that it will increase prices in Europe by ˆ 50 per ton for all HDPE, LDPE and LLDPE, effective July 1st and for PP effective August 1st .
“This increase is driven by a globally strong demand for polyethylene. In Europe , demand really picked up in June, after a period of several months of destocking by the converting industry,” says Huub Meessen, Business Unit Director LDPE/LLDPE. “In Asia , the demand is increasing by the day due to the low level of stocks at converters, the start of the agricultural season and the sudden sharp rise in feedstock costs of more than $ 200 per ton.”
“For Middle Eastern and even European producers, prices for deliveries to Asia are becoming substantially more attractive, due to very low prices in Europe and the strengthening of the dollar against the euro,” says Jo Mastenbroek, Business Unit Director HDPE. “As a result of these enhanced export opportunities, followed by a lower level of PE imports into Europe and recent capacity reduction of European producers (caused by outages and plant closures), the market is tightening rapidly.”
“PP demand has been very high in June,” says Eric Hogenboom , Business Unit Director PP. “It shows the resilience of a fundamentally strong and healthy European PP market which is also tightening quickly, now that stocks are low throughout the value chain. PP export opportunities have increased considerably on the back of a more favourable dollar-euro exchange rate. In Asia , PP prices have recently risen by $100 per mt. In Europe , the pricing floor for PP has definitely been reached”
“These increases are only a first step in bringing margins back to an acceptable level. With today’s oil prices of close to $ 60 a barrel in the US , significant increases are necessary in order to restore profitability.” He added.