Based on players' reports, there has not been much buying activity in Italy's polymer markets following last month's long summer holidays, as per ChemOrbis. As opposed to sellers' earlier expectations of relatively better demand in the post-holiday period, buyers avoid committing to new purchases which has led to a stagnant atmosphere in the polymer markets including PP, PVC, PE and PS this month. Lower monomer settlements for September, as well as the slower than expected demand from converters, most of which will face the low season for their end products soon, has led to sellers' loss of confidence this month, pushing European suppliers to come with stable to softer September prices.
"Current PVC prices are justifying the weak demand conditions," a PVC converter stated. The gloomy economic outlook was another factor causing the sentiment to cool off in Italy. According to market sources, European stock markets tumbled early this week on warnings of a broad crisis in the region's financial sector. The developed economies are said to have slowed down, with Euro-area growth stopping over the past few months. Analysts argue that Italy's debt might be unsustainable as the country's debts are considered to be too big to restructure. Under the influence of economic woes, most buyers, especially those who have some stocks from last month, have elected to remain on the sidelines in hopes of seeing more attractive prices in the weeks ahead. "Demand is not good for either PE or PP. No one is interested in new purchases," a distributor confirmed.
Considering the abovementioned factors, many sellers, who are trying rollovers in their initial prices, agree that price reductions will be unavoidable in the coming weeks. "Given a sizeable decrease of €37/ton in the new propylene contracts, the fragile economic conditions and the gloomy economic outlook worldwide, PP prices are likely to decrease by €20-30/ton so we may need to revise our initial prices down later," a source at a West European producer who came with rollovers this month commented. A distributor who is planning to reveal his new PP prices at rollovers said he doesn't expect to see great demand this month. "PP prices are likely to post even small decreases in the coming weeks," he noted. A local PVC seller complained that his customers are yet to order any materials despite stable prices. "Buyers are apparently looking for some small discounts," he commented. "The market is still very slow. We prefer to wait for a while before engaging in new purchases as we expect to obtain some discounts from August," a PS converter said.