Feb expectations encouraging PVC buy interest in Italy, Mexican PVC, PP and PE markets

Feb expectations encouraging PVC buy interest in Italy

19-Jan-11

After tracking a mainly stable trend over the last three months of 2010, Italy’s PVC market turned upwards in January, as per Chemorbis. Having met with noticeable hike requests of upto €50/ton following the Christmas holidays, Italian PVC buyers are now conceding to pay €20-50/ton increases depending on the grade. PVC buyers, who had purchased in reduced volumes last month, are actively inquiring about prices these days as early speculations of further increases for next month are prompting buyers to secure new cargoes. A distributor offering West European origins expects to see a further increase in February ethylene contracts on top of this month’s €105/ton jump, leading him to plan to raise his PVC prices further in February. A trader reported that his Central European supplier already raised their prices by €30/ton compared to the beginning of the month blaming their limited allocations. Now that PVC sentiment is headed towards further firming just like the widespread expectations in the country’s PP and PE markets, buying interest for PVC is reviving once again since buyers have started to make price inquiries in order to be prepared ahead of the anticipated increases for next month, with many turning to Mexican supply sources in order to fulfill the larger portion of their needs at relatively lower prices. A compound producer, whose end product business is performing well, reported that he is looking to secure new shipment cargoes this week as he expects to see further increases next month. The buyer already ordered 600 tons of Mexican material on DDP Italy basis which will be delivered in the first half of February at a level €55/ton below the lowest local PVC price in Italy. “Mexican suppliers are offering the most competitive prices this month and they are able to supply large volumes of k70 grade,” he commented. Another converter producing pipes reported that he prefers to purchase import cargoes paying relatively lower prices for large volumes and keep his local purchases limited due to his narrowing margins. Similarly, he purchased 500 tons of Mexican PVC on DPP Italy basis, although the cargoes are scheduled to be delivered in March while he concluded deals with various local suppliers for smaller volumes.