PE buyers remain cautious ahead of Easter holidays in Italy

16-Apr-14

In Italy, the PE market is tracking a stable to slightly firmer trend after sellers stepped back from their initial hike requests of up to €40/ton amid resistance from the buyers’ side, as per ChemOrbis. The latest LDPE and HDPE prices are below early April levels while LLDPE prices are slightly higher on the high end due to limited availability. A distributor commented, “We are giving April offers with increases of €20-30/ton while our suppliers were aiming for larger hikes of €40/ton due to their limited availability for HDPE. However, buyers are still giving counter bids with rollovers from March.” Another distributor reported concluding some deals with rollovers from March due to sluggish demand despite targeting to raise his prices by €30/ton at the beginning of the month. Converters are continuing to limit their purchases ahead of the upcoming holidays. Trading activities are expected to slow down starting from April 18 due to Easter and other Bank holidays on April 25 and May 1. Softer ethylene prices were also cited as another factor behind cautious buying activities. Supply is continuing to outpace demand in the ethylene market and spot prices are standing around €35-40/ton below early April levels, remaining below the €900/ton threshold. Meanwhile, spot naphtha prices on a CIF NWE basis moved slightly higher week over week while they are not suggesting major changes compared to the beginning of the month. Regarding gentlemen’s agreements, a converter settled his April contracts with rollovers for both West and South European cargoes after receiving slightly higher initial offers from his West European suppliers. The buyer commented that hike targets lacked support from demand and the short working days in April. According to ChemOrbis, in Northwest Europe, PE prices are tracking a largely stable trend as buyers remain cautious. Several distributors in Germany reported giving April offers with rollovers as the market is not strong enough to absorb increases. For May, players are anticipating a trend similar to April for now while some of them think that small decreases may also be possible depending on the demand situation and monomer settlements.