October Expectations Falter in Italy’s PP, PE Markets
23 Sep 2010 • by Natalie Aster
Expectations regarding October have started to surface in Italy’s PP and PE markets. As per Chemorbis, sluggish demand in both markets is weighing down on the market sentiment, causing buyers to wait for softer prices. Acknowledging the dullness of demand, even sellers have not pronounced firm expectations for October while some say that they will inevitably have to give in to price decreases albeit only in small amounts. In the PP market, September spot deals have mostly been concluded at a rollover in Italy while some slight discounts of €10-20/ton have also been achievable by buyers who preferred not to rush their purchases and met their requirements at prices close to the low end of the ranges particularly in the second half of the month. Recently, some resellers have also admitted giving in to slight discounts or adjusting their offers modestly downwards in an attempt to attract some buying interest. Even though a trader reported his plans to roll over his Middle Eastern PP offers for October pointing to his tight supplies, many local traders and distributors agree that the market will track a stable to soft trend in October given stalled buying interest, lethargic end product demand and weak upstream markets. Plus, as has been the case in September, non-European cargoes may still continue to exert pressure on Italy’s local market owing to the premium it carries over the neighboring markets. Furthermore, the appreciating euro against the US dollar may enhance the competitive position of non-European offers to Italy as it will cause lower values on euro terms.
When looking at the PE market, rollovers to small increases of €20/ton have passed in spot September LDPE deals. Although producers were quite adamant about price hikes early in the month, their determination has started to falter as the month has worn on since they have come to terms with poor demand in line with the low season for PE applications and they revised their hike requests to smaller amounts or even to rollovers. Particularly after mid-month, expectations about seeing lower LDPE and LLDPE prices in October have prevailed amongst buyers. Having met their urgent requirements, converters are now in a waiting stance. Sellers also affirm the difficulty in making sales these days, which is not helping them voice firmer expectations for the near term. Players feel that sellers will mostly seek rollovers initially and they will have to surrender to softer prices in the later days of next month. As for HDPE, players do not think that this product will face a great pressure since the offers particularly close to the low end of the overall range are already considered low. However, the high end of the range may continue to be subject to some resistance from buyers as lower offers are easily obtainable in the spot market.
Source: Plastemart
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