Spot prices of high-density polyethylene (LDPE) in Europe fell in the second half of February amid weaker than expected demand and high inventories material from buyers, ICIS reported citing market participants.

The potential decline in ethylene contract prices in March also affected the mood of market participants, although at the moment there is no certainty that they will fall, as oil prices have strengthened.

Decrease in spot prices for LDPE was not widespread, and some buyers still bought material at EUR1,200 per tonne, FD NWE (north-west Europe) and more, but these were single transactions.

Market participants reported transactions at around EUR1,150 per tonne, while the lowest deals were at EUR1,100 per tonne. These price offers were not available to all buyers.

The approval of the March contract prices for ethylene is expected in the near future. Manufacturers are still unhappy with the significant difference between ethylene and polyethylene in recent months. They would like to restore their margin, while buyers disagree, because they have sufficient supplies of material.

According to the Price Review of ICIS-MRC, in Russia last week there was no significant change in the LDP market. Excessive supply and low demand continue to put serious pressure on the market. At the same time, individual sellers have raised the prices of LDPE this week, but even with this increase, the overall spread of prices across the market has actually remained unchanged. Some market participants still hope that in March the situation on the LDPE market will improve. Demand will grow due to the seasonal factor, and the market is balanced. Some sellers hope for the forthcoming stop to prevent the capacity of Kazanorgsintez (April 13-May 10), which in previous years led to a deficit and a rise in prices.