Several PE converters in Italy are doing definitely better than the same period of last year, despite the lackluster performance of their end product markets, as per Chemorbis. A buyer who has recently concluded his LDPE agreements with West and South European producers paying €100/ton increases stated that end product demand for compounds has improved with respect to 2009 while other converters from the packaging industry also said that their end product demand has been regular in January. Forced to accept the large increases ranging from €60-100/ton this month, they are facing difficulties in passing their higher raw material costs to their downstream customers.
Additional hike requests of €100/ton are on the table for February. The firming trend is caused by the surge in the ethylene contracts and persistent tightness. Demand has also been satisfactory for some time as buyers have been pre-buying since early December to avoid paying much higher prices. Buyers also need to secure their requirements albeit on a needs only basis since their end product business has been going relatively well. However, they still want to keep the size of the increases they will pay for next month to relatively smaller figures of €50-70/ton due to their problems to pass them down to their customers.