High density polyethylene (HDPE) spot prices have fallen sharply in recent weeks in Europe, and sentiment is still weak.

• HDPE spot prices tumble

• Planned cracker turnarounds imminent

• Global concerns add to uncertainty

Imports are offered in greater volume, for end-August/September delivery, but also for prompt. Many prices talked for such material are below €1,000/tonne FD (free delivered) NWE (northwest Europe).

Some buyers saw low-end levels- below €1,000/tonnes- available only for delivery in the weeks to come, with current business still at or above that level.

Some local distributors are offering below €1,000/tonne as they prepare to leave for holiday, unwilling to return with higher-than-market priced stocks in the warehouse.

On the other hand, prices are so low that some sources believe they can go no lower, and may bounce back after the holidays.

The second phase of planned cracker turnarounds is imminent, and this should limit ethylene output. On the other hand, the first phase, which was heralded for several months, ended with no issues, so PE buyers are a little more cautious ahead of this phase. There is still some underlying concern over potential problems.

Low water levels are also now being reported from the Rhine, and this too could add some concern for buyers in September, combined with the turnarounds.

These elements, along with new imports being offered from new US capacities, are leading to uncertainty in the widespread polyethylene (PE) market, not just the HDPE sector.

On top of this, uncertainty surrounding the US/China trade war, Europe’s stalling economies, and Brexit, are adding more concern to PE markets globally.

China's polyolefin sentiment is greatly dampened amid escalating trade tensions with the US in the wake of Donald Trump's new tariff threats.

In the morning on 2 August, the US president took to social media to declare the country's intention to impose 10% tariffs on $300 billion of Chinese goods starting September 1.

The latest tariff threat has sharply heightened fears about the risks of a global economic slowdown.

HDPE is used in packaging and the manufacture of household goods.

Source: ICIS