Italy’s PP market has been slow throughout April as buyers who did not want to pay April increases mainly refrained from building stocks from the local market while the extended Easter holidays and the earlier talk of stabilizing prices also contributed to the slowness in trading activity, as per ChemOrbis.
Even though sales were not so bright inside the country over the past month, according to players’ reports, April business was closed with rollovers to up to €30/ton increases over March. Following a €35/ton increase in May propylene contracts, which settled in the middle of last week, PP sellers have started to come with new increases for the 5th month in a row. Initial May prices in the spot market indicate monthly increases of €30-35/ton compared to April.
In comparison with other Mediterranean markets, Italy’s PP market has been carrying a noticeable premium over Turkey and Egypt. Apart from continuous increases seen in Italy since the start of 2011, the firm exchange rate is one of the factors contributing to the country’s current premium.
In Egypt, where initial May offers from Middle Eastern suppliers indicate a stable to slightly firmer trend, the highest import PP price stands at around $1778/ton CIF Alexandria, cash and in Turkey at $1860/ton CFR Turkey, cash, subject to 3% duty.
With the current exchange rate parity above 1.48, these USD based prices roughly translate to€1200-1260/ton, which means Italy carries an approximate premium of €100-160/ton compared to these other Mediterranean markets, where the lowest spot PP price wasat €1400/ton FD Italy, 60 days deferred payment terms last week.