Italian PP buyers agree to pay sellers’ hike requests

14-Mar-12
European PP suppliers have come with price hike requests of up to €140/ton month over month, for March, as per ChemOrbis. The hikes were backed by the higher propylene contracts, plus talk of supply limitations at some producers. Converters initially replied to the new hike targets saying they would resist making purchases until later in the month with the hope of keeping the increases minimized. Several buyers claimed that some resellers were willing to negotiate on their initial prices. “A distributor offering locally held Middle Eastern homo PP asked me to place a bid, hinting that he may concede to a smaller increase on a done deal. This shows that local supply is not so tight in Italy. Sellers are ready to go below their initial prices,” a buyer told ChemOrbis. However, seeing that strong naphtha and crude oil costs as well as higher spot propylene prices, which have stabilized after rising around €40/ton compared to the start of March, are supporting sellers in their hike pursuits, PP buyers are showing interest at the lower end of the spot market recently. Amidst the newly emerging speculations about new price hikes in April, some buyers agreed to pay monthly increases ranging from €90-140/ton in the spot market over the week. Some converters have decided that they didn’t want to risk being without material, although inventory levels are believed to be normal especially on the resellers’ side. “At the start of March, demand was really poor but for the last few days, orders from our regular customers have started to come,” a source at a South European producer reported, adding that they expect to see further increases in April. “Despite the large increases sought by suppliers, we may purchase some homo PP this month as we heard about further increases in April. We do not want to take the risk of paying further increases next month,” a compounder commented, voicing, at the same time, his discontentment with the continuous price hikes. Buyers are not happy with the higher price levels they are currently paying. Many complained that they are facing difficulty in passing down their higher costs to their end customers as quickly. “Our end product business is performing badly. Consecutive price hikes from PP sellers are affecting our business negatively,” he complained. “PP producers are mulling over new price hikes for April. If they come with further price hikes next month, our sales performance will worsen as demand is already very slow this month,” as per a distributor.
  More News  Post Your Comment

Previous News

Next News

{{comment.Name}} made a post.
{{comment.DateTimeStampDisplay}}

{{comment.Comments}}

COMMENTS

0

There are no comments to display. Be the first one to comment!

*

Name Required.

*

Email Id Required.

Email Id Not Valid.

*

Mobile Required.

Email ID and Mobile Number are kept private and will not be shown publicly.
*

Message Required.

Click to Change image  Refresh Captcha