European linear low density polyethylene C4 contract prices logged a Eur20/mt ($26.50/mt) gain on the week to touch a four-and-a-half month high of Eur1,450-1,455/mt FD Northwest Europe, buoyed by tight supplies and oil price spike, sources said.
The previous high was in mid-April when LLDPE reached Eur1,472.50/mt FD NWE.
"We had excellent offtake in August, better than in July. We were 100% sold out," one producer said, pegging net contract prices at Eur1,330-1,340/mt FD NWE for medium size converters.
"There is some pre buying too," he added.
"To discourage pre buying we have closed our order book," another producer said, pegging prices at Eur1,460-1,480/mt FD NWE.
Feedstock naphtha climbed to $963/mt CIF NWE Wednesday as the threat of a military strike against Syria sent oil prices higher. This further ignited bullish expectations for September.
The August ethylene contract price settled at Eur1,210/mt FD NWE on July 31. Naphtha was assessed at $869/mt CIF NWE on the day.
European PE producers have been mulling increases of up to Eur100/mt for September, they said. Some sources said they were concerned that the recovery in economic activity would be negatively affected by ongoing geopolitical issues. Eurozone business activity picked up sharply in August, hitting a 26-month high point as the economy climbed out of a record recession, a survey showed last week.
