Tight supplies in the European linear low density C4 spot market have sent prices higher and narrowed the premium of LDPE over LLDPE, sources said this week.
Spot offers for both LDPE and LLDPE C4 were heard at Eur1,440-1,480/mt ($1,802-1,852/mt) FD NWE this week.
"The premium of LDPE to LLDPE C4 has been between Eur50-100/mt most of the year but has been reduced to Eur20/mt," a source said.
Availability of Melt 1 LLDPE C4 has become particularly tight, with the discount to LDPE narrowing as converters opt for a blend ratio more in favor of LLDPE C4, a buyer said.
According to Platts data, the premium of LDPE over LLDPE C4 has averaged Eur61/mt this year. Last Wednesday, LDPE was assessed at Eur1,402.50/mt FD NWE and LLDPE C4 at Eur1,322.50/mt FD NWE.
In the UK, LDPE and LLDPE C4 offers this week were heard at GBP1,160-1,180/mt FD and GBP1,130-1,140/mt FD respectively, with the gap narrowing, sources said.
Availability of import-driven LLDPE C4 was squeezed due to a delay in deliveries from the Middle East, sources said. In addition, European PE producers said they had no incentive to run flat out amid energy price volatility that was adding to tight supplies. The supply tightness triumphed over underlying demand weakness, sources said, keeping both LDPE and LLDPE C4 prices buoyant in Europe.
