PVC buyers in Italy anticipate price rollover for April

26-Mar-10

In Italy, some sellers particularly from Central Europe opened the month of March on a firm note asking for increases of up to €50/ton, in a bid to improve margins, as per Chemorbis. However, some West European sources sustained February prices, offering competitive alternatives to regional buyers at the low end of the ranges. Relatively attractive prices have been prevalent for PVC through the month from West and South European sources, pressuring Central European sources to take back their hike targets, but they have still failed to match the competitiveness of West European origin PVC. Import offers from North and South America, which were considered a good option up until a couple of months ago, have also lost their competitiveness due to price pressures. Italy’s spot transactions have seen rollovers to €10-30/ton increases so far in March, with buying slowing down as buyers prefer to buy what they need given the poor end product markets. Almost all converters are complaining about their unsatisfactory orders and high stocks of finished products. Therefore, buyers appear to be in no mood to accept further increases for another month. Apart from fragile demand and comfortable supplies, the forthcoming Easter holiday in April will cause next month to be relatively short in terms of working days encouraging some converters to shut their production for an extended period in the midst of already low business. Another factor supporting buyers’ stability expectations is that the global upward pressure on Italy’s PVC market has waned with a rollover of the initial April offers in Asia. Considering the widespread stability expectations from the buyers, sellers may feel tempted to seek initial price hikes if the April ethylene contract posts a small increase in the days to come. There are also still some hopes about seeing a revival in PVC demand amongst some sellers since April should see better conditions with respect to the first three months of the year in line with the season. In March, the private sector business activity among the Eurozone countries posted the sharpest increase seen since August, 2007. This news provides some basis for sellers’ expectations to witness improved demand next month.