European producers have started to reveal their April PVC offers in Italy and Germany with rollovers to modest decreases of €10-20/ton following the return of players from the Easter holiday, as per ChemOrbis. However, further decreases are obtainable, according to buyers, due to the large drop in ethylene contract.
A West European producer said, “After settling our March gentlemen’s agreements €20/ton higher for PVC in Italy, we are asking for rollovers in April and we are planning to be firm at our initial offers.” Another West European producer who concluded March gentlemen’s agreements with €20-25/ton increases is seeking rollovers for April in Italy. “Demand showed a very bad performance in Q1. Germany’s pipe and window profile sectors posted significant losses while Italy’s and Spain’s markets have already contracted. That’s why, we need to recoup our lost margins,” a company producer said. “Rather than revising our offers, we may consider focusing more on exports,” he added. A South European producer is offering with a €20/ton decrease from March in Italy’s spot market. “We will probably keep our €20/ton decrease target as we need to recover our margins. The Italian market is not so profitable due to political and economic woes, but demand from the construction sector may pick up as May is the high season,” a company source said.
When looking at the buyers’ side, a cable manufacturer in Germany reported receiving rollover requests from different West European suppliers, similar to Italy. However, he thinks that decreases of up to €30/ton or even more can be obtained at the end of the negotiations. “This is because demand in Germany is quite slow due to weather conditions, which doesn’t help the construction sector,” he said. A compounder in Italy is also waiting to see discounts in April owing to persistently poor demand. “No major revival is likely for April due to unstable political conditions in Italy,” another compounder commented. Nonetheless, some buyers voiced their concerns regarding the availability of Kem One, who filed for a state of insolvency late last month and opened the way for official receivership. Although buyers reported that they were assured about smooth deliveries from the producer for April as the company announced their operations will continue under the new receivership, a converter said, “We had to purchase urgent material from other suppliers as we were not able to receive our orders from the producer, although they will supply us later during the month. Players are now wondering if possible delays from this producer will cause any restraints on supply on a large scale across Europe and help sellers remain firm on their initial requests for rollover to small decreases according to ChemOrbis. However, the majority of buyers do not think that this factor will overshadow the persistently poor demand and the US$60/ton decrease of the ethylene contract for April.