PE demand better than PP in Italy

10-Feb-10

Although both PP and PE markets are under upward pressure from rising monomer costs and limited availability in Italy, PE demand is performing much better than that of PP as per Chemorbis. Both the markets have seen large price hikes of €80-100/ton; however, many sellers affirm that PP demand is slow. Several buyers are buying their bare minimum requirements while others prefer to take a waiting stance in anticipation of a price correction. They complain that the PP market is not strong enough to support these large increases given the fact that their end product businesses have still not revived. Therefore, there is resistance built against offers standing above €1100/ton for homo PP on FD North Italy, 60/90 days deferred payment. Despite the slow demand, the outlook remains firm for PP in the near term due to the constantly rising propylene prices across Europe. When looking at the PE market, sellers mostly continue to report satisfaction with their sales. Amidst tight supplies, some producers are already sold out. Traders also report having low stocks and making smooth sales particularly at the low end of the ranges although they are asking for €100/ton higher prices. Accordingly, early speculations about seeing further increases in March have already surfaced in Italy’s spot PE market.