European spot ethylene prices slumped to their lowest since April on flat demand because of the holiday season, sources said.
Northwest European spot prices were assessed at a discount of 5% to the August and September monthly contract price, on Friday. Prices were assessed at Eur871/mt ($973/mt) down Eur15 on the week.
Derivative offtake was said to be weak because of the summer holiday season and the drop in the ethylene contract price of Eur20 to Eur925/mt for August
Despite the bearishness in both ethylene and low density polyethylene spot prices, margins are expected to remain solid looking forward, analysts said last week.
The LDPE-ethylene margin has been consistently increasing over the last few years. In 2014, the average European margin over the year was $379/mt, rising to $488/mt in 2015, and $500/mt so far in 2016.
This margin is expected to remain solid, Dow said in an earnings call at the end of July.
"Polyethylene prices reflect the current level of robust demand. Derivative demand is much tighter than ethylene demand and will remain the case. We continue to see delays forecast in later startups."
