Sabic expects to raise prices even higher

Polyethylene prices are poised to break the psychological barrier of E1,000/tonne in Europe. A proposed E100/tonne rise would put all PEs above E1,000/tonne – the old psychological barrier – according to Sabic’s LDPE/LLDPE business director, Huub Meessen.

“Due to structurally higher oil prices, the new upper barrier will be closer to E1,200/tonne,” he said. European PE buyers also face growing competition from Asian consumers. “The Asian market is particularly strong, and even for a European producer, prices for deliveries to Asia are substantially more attractive than the current European level,” said Sabic.

Meessen added a blunt warning to PE buyers: “These increases are only a first step to bring margins back to an acceptable level. Significant increases are necessary to restore profitability. With today’s oil price level we are still at the bottom of the cycle.”