European polyethylene converters have rejected contract prices increases for April announced by PE producers, they said this week.
PE producers announced increases of Eur20-40/mt, while converters were eyeing at a rollover in prices. Converters said fundamentals did not warrant an increase in contract prices, as feedstock ethylene contract prices had slipped.
The ethylene contract price settled last week at Eur1,165/mt ($1,603.5) FD NWE for April, down Eur15/mt on the month.
Producers cited as a combination of factors relatively tighter supplies, the beginning of seasonal demand and an improvement in margins needed as reasons behind their targets for higher prices.
"We expect in April seasonal demand for packaging and consumer goods to take off," one producer said, adding he was targeting a Eur20-30/mt increase.
Converters did not share this optimistic outlook for a demand uptick.
"Ethylene is down on the month, we have been educated to follow ethylene. Now even though ethylene is down, they want an increase," one converter said, adding that he had sufficient stocks to "sit on."
Contract prices were assessed stable on the week at Eur1,442.50/mt FD NWE for low density PE on Wednesday.
