European polyethylene spot prices have extended their gains this week, rising Eur10/mt ($13.40/mt) on the week to Eur1,270-1,275/mt FD Northwest Europe, which market sources attributed to tighter supplies as European LDPE producers scale back their operating rates to ease the pressure on their margins.
Spot prices continued a slow ascent that started in mid-October, according to Platts data. Similar dynamics were seen in the linear low density and high density PE spot markets, sources said.
A few producers said they had closed their order books and expected the gains to carry into December.
Rising feedstocks aided the momentum.
Naphtha climbed to $930.25/mt CIF NWE Wednesday, compared with $914.25/mt CIF NWE on November 1.
However, while European producers said that they were witnessing better-than-expected demand, the gain in LDPE spot price was restricted to Eur10/mt as the demand was not characterized as buoyant.
"The converters are swallowing the increase in prices, but there is no urgency to buy or prebuying," one distributor said.
Offers in NWE were heard from Eur1,270-1320/mt FD NWE. Converters were reluctant to commit to "big" positions, another distributor said.
One converter said that end-user demand was expected to be stable until the end of the year. Another said that, while retail and horticultural packaging is seeing good offtake, offtake from industrial applications has been suffering.
