May prices for polyethylene (PE) in Europe are falling relative to the April level, as contract prices are not yet agreed, ICIS sources told the market.

“May started well, but there are downward sentiments in the market,” said one of the producers.

A similar situation with consumer activity in the market was in April, when customers started using the reserves accumulated in the first quarter, amid fears of a potential shortage, as several cracking units were closed for routine maintenance.

Some buyers insisted on reducing more than EUR20 per ton, which had already been provided to several suppliers, and in the low-pressure polyethylene sector (HDPE), in particular, the excessive supply put pressure on market sentiment.

Growing oil quotes and volatility also hamper activity, and although oil prices rose after falling earlier this week, many sources of the PE market began to expect a fall in the June contract price for ethylene, which would inevitably affect the prices of polyethylene.

It is expected that price negotiations will continue this month.

According to the Price Review of ICIS-MRC, in Russia the last working week was short due to the continuation of the May holidays (the 8th and 9th May were the days off). There was a small spike in consumer activity in the PE market, but this was largely due to long holidays. Last week the May contract prices of the Russian PND were finally agreed. Some manufacturers prolonged the April prices of HDPE, some manufacturers went for a small price reduction.