European polyethylene spot prices have increased. How will this affect the domestic polymer market?

Spot prices for polyethylene this week have increased significantly up to 50 EURO/tonne, because of the demand of market operators who strongly purchased in advance. This demand come up almost every year, but this time it is because of bigger fear of a possible significant prices increases for polyethylene in the future.

Ukrainian and Russian traders feverishly restocks, and this will "feed" some of them almost the entire first half of 2013. Selling the polyethylene during this period allows to have a positive profit at the end of each working year in the domestic traders' business.

Raw material producers CIS countries were given loyal prices until the end of November, actively participating in this massive New Year sale. But this process can be quickly stoped because of growing European prices.

Spot prices in November for polyethylene of high pressure held within 1, 200 EURO/tonne, FD NWE. Now they are at a minimum level of 1, 300 EURO/tonne FD NWE.

Domestic traders are now actively engaged in returning the funds from their customers processors, and having financial difficulties to make large-volume purchases. As a result, the logical increase in prices of raw materials producers CIS may not be supported by a similar increase in demand from traders and large processors.