Acceptance for Jan PP hikes in Italy

11-Jan-12

After a round of decreases in the last few months of 2011, Italy’s PP market has turned around in January on the back of higher feedstock costs, as per ChemOrbis. European PP suppliers have returned with larger price hikes than the €20/ton seen in the January propylene contracts due to their need to recoup their margins. European PP sellers have come to Italy’s spot market with increases ranging between €40/ton and €100/ton over December levels while January offers from Central Europe to the nearby Turkish market have been announced with €20/ton increases. “Almost all other suppliers are implementing similar price hikes this month on the back of higher feedstock costs and the recent signals of better demand for the coming term,” a reseller who raised their prices by €70/ton in Italy commented. As the Italian market shrugs off the holiday lethargy this week, players have started to report more activity in the PP market while no done deals for European origins have been reported in Turkey at new prices yet. Based on distributors’ reports so far, sellers’ hike requests for January are meeting with acceptance in Italy, although buyers are apparently not happy with this month’s larger than expected increases. “Many PP suppliers are seeking large price hikes but we don’t want to ask for more than €50/ton increases in order to achieve smooth sales this month. Thanks to our comparatively smaller increases, we were able to sell some volumes at our new prices this week,” a distributor who is offering West European origin stated. Another distributor reported obtaining a larger increase of €70/ton over December on spot done deals for West European origin. A converter, who purchased a small volume of Central European PP early this week, said he had to purchase some volumes to cover an urgent need. “Prices in Italy are too high, we want to wait until the second half of this month,” the buyer noted.