Italy under pressure from non-European origins

Offers for non-European origins of PP, PE, PS and ABS have started to emerge again recently in Italy at attractive prices both on local and import terms, contributing to the pressure from flagging demand inside the country, as per ChemOrbis. In the PP market, non-European origins form the very low end of the overall market level. A locally held Middle Eastern homo PP injection offer showed up late last week at a very competitive price, breaking below a new threshold at the low end of the price range. It also stands at least €40/ton lower than the lowest European offer seen in the market while buyers’ bids for Indian and South African materials also stand well below the European offers. Distributors offering European cargoes at the high end of the ranges complain, “We are seeing stiff resistance from buyers as they argue that there are competitively priced Indian and Saudi Arabian cargoes available in the market.” A buyer told ChemOrbis, “We are in no hurry to buy more as I am sure I will be able to find prices matching my buy ideas soon.” Locally held Middle Eastern origins have also started to be widely offered with competitive prices in the spot PE market. Apart from the pressure coming from lower feedstock costs and poor demand, these competitively priced non-European origins are exerting extra sales pressure on sellers for their European materials, particularly for HDPE and LLDPE, as the price gap between European and non-European origins is as wide as €200/ton. A Switzerland based trader offering Middle Eastern origins on local terms commented, “We have already revised our offers down by a considerable amount. For LLDPE, a buyer asked for an additional decrease of €30/ton and we agreed. However, he still didn’t accept it as he said he found much lower offers with decreases of up to €100/ton from last month.” In the PS market, import cargoes are seen for Indian and Pakistani GPPS in addition to the locally held cargoes offered with local terms at the low end of the overall GPPS range. Up until last week, Indian and Pakistani GPPS offers on import basis were in line with the offers seen in the Turkish market, providing a competitive edge against the local market. Unlike the PP and PE markets, where large price decreases are occurring, Italy’s PS market is facing price hike targets this month with sellers asking for increases on the back of higher monomer contracts. Accordingly, players believe that import cargoes may provide alternatives for Italian buyers this month even though a couple of buyers said, “We are bidding for much lower import offers as we believe that local sellers will face pressure from lethargic demand.” A distributor also reported receiving some import offers for ABS in the spot market. The premium the Italian spot ABS market carries may attract more import cargoes to the country as stable to firmer prices are sought for local European cargoes whereas the trend is soft in other global markets.