NWE polyethylene prices set to move lower for September in Italy

Players in Europe report that PE prices are set to move lower following the softer trend in August and the €55/ton drop on the September ethylene contract in the region, as per ChemOrbis. Most initial price proposals have been given with decreases of more than half of the ethylene decline, although one distributor in Germany reported receiving decrease amounts in excess of the ethylene drop. An Italian converter in the food packaging sector purchased Middle Eastern MDPE film with a €40/ton decrease, adding that they were offered West European HDPE film with discounts of €30/ton from the prior month. “We decided to purchase Middle Eastern cargoes instead of West European materials as prices for Middle Eastern cargoes are more competitive. In addition, the reseller offering Middle Eastern goods is a reliable company and we secured advantageous delivery terms from them,” the buyer stated. Another packaging manufacturer in Italy reported receiving offers for West European LDPE with €40/ton decreases from August from two different suppliers. “We are still collecting offers from our suppliers and are not planning to purchase just yet. We are in no rush to restock as we are not receiving very many orders from our customers so far,” the buyer commented. A stretch film manufacturer based in Italy said that they received initial offers for Gentlemen’s agreements with €35-40/ton reductions for both West European LLDPE film and South European LDPE film. “We plan to contact another South European supplier to receive their offers before deciding on any new purchases,” the buyer stated. A manufacturer of pipes and compounds said that they were offered the full ethylene decrease of €55/ton for West European LLDPE film while the offers they received for West European and Middle Eastern HDPE blow moulding were down €45-50/ton. “We have only purchased a small volume of competitively-priced Middle Eastern LLDPE film so far. Demand for our end products is not very strong these days,” the compounder reported. Similar decreases are also being announced to the German market. A distributor based in Germany said that they lowered their offers for West European LDPE film and HDPE blow moulding by €70-80/ton while implementing a smaller reduction on their offers for LLDPE film given comparatively tighter supply for this product. “We are not giving offers for HDPE film as we have no availability for this product. We matched the decreases given by our supplier in order to maintain our competitiveness in the market,” the distributor stated. Another distributor reported giving initial September offers with €50/ton decreases for South European material and €40/ton reductions for Middle Eastern cargoes. “The market is fairly quiet now. We decided to give a €50/ton reduction on our offers for South European cargoes as we did not think that buyers would agree to any smaller decreases,” the distributor reported. According to ChemOrbis, a third German distributor said that they lowered their offers for West European LDPE film by €45/ton while lowering their prices for West European HDPE and LDPE injection by €55/ton. “We are feeling free from stock pressure as we had sold out in August and have only replenished in small amounts this month. We believe that sellers will try to conclude their September business before the middle of the month in order to ensure that they do not have to agree to discounts larger than the ethylene decrease,” the distributor stated.