European PE suppliers did not manage to convert the ethylene reference’s rollover into polymer prices in May 2017. Despite their hopes, oil and naphtha prices solidly remained in lower ranges after their slump in mid-April. Sinking spot prices and a run on imports caused by a strengthening euro undermined any efforts for price increases. In the end, discounts dominated the landscape, especially on the films sector.

Speculative buying restraint contributed to further hefty discounts in a segment dominated by continuous and retroactively fixed contracts. By contrast, materials for use in the construction sector often experienced lesser decreases due to the high demand generated by a season in full swing.

At least the first half of June is likely to have seen further substantial discounts. The ethylene reference is setting a clear sign. In some segments, suppliers still might be tempted to go for a trend reversal.

Many special offers at the end of May indicated a targeted reduction of inventories. With a lower availability of materials, the remaining stock could then be sold at higher prices. Nevertheless, much will depend on how much buyers will give up their reluctance in the relevant segments.