Hikes for December PP, PE start to pass in Italy's spot markets, naphtha prices, oil prices

Hikes for December PP, PE start to pass in Italy’s spot markets

09-Dec-10

Following a round of increases passed on November done deals for PP and PE in Italy, sellers have been revealing December spot offers with additional increases for the past couple of weeks, as per Chemorbis. Based on sellers’ reports so far, December price hikes are meeting with acceptance, with increases of €20-30/ton passing on PP and PE done deals. In the PP market, sellers, who managed rollovers to small increases of €10-20/ton on their spot deals last month, came with additional increases of €20-30/ton this month while some suppliers who had been offering at the upper end of the price range preferred to leave their prices unchanged. Higher propylene contracts, which settled with a €22/ton increase for December, along with surging naphtha and crude oil costs supported sellers in their hike pursuits. The fluctuating exchange rate parity, which has partially caused Italy to attract less imports, also helped higher regional prices to meet with acceptance despite slowing demand amidst year-end bookkeeping and the approach of long Christmas holidays. This week, a source at a Central European producer reported to have almost closed December spot PP business at stable to €20/ton higher prices from November. The producer plans to ask for another €50/ton increase in January given higher naphtha and crude oil prices nearing the $90/barrel threshold. In Italy’s PE market, where November spot PE business was closed with increases of €10-30/ton from October, sellers came with further hike requests of up to €50/ton for December amidst a €27/ton increase on ethylene settlements, tight regional supplies especially for HDPE and LDPE, combined with existing demand. Traders and distributors reported this week that they were able to achieve increases of €30/ton on their LDPE and HDPE sales albeit smaller than what their suppliers had initially asked for. “Currently the supply is short from the suppliers while we are receiving good orders from converters,” a trader commented.