Sentiment shifting in Europe’s PP, PE markets

PP and PE prices in West Europe and South Europe have followed a downward path for more than two months in the midst of weak demand and softer costs, as per ChemOrbis. Even though ethylene and propylene contracts registered monthly decreases in relatively modest amounts, the decreases recorded in the spot polyolefin markets have well outpaced the losses of the monomer contracts. As November draws to an end, players in Italy and Germany report wrapping up of November deals up with another round of decreases. In Italy, spot PP deals have been concluded with €20-40/ton decreases from last month while decreases of up to €60/ton have been reported in spot PE deals, as per ChemOrbis. In Germany, traders also reported selling PP and PE in the spot market with decreases ranging from €30-50/ton when compared to last month. Nevertheless, a feeling that the bottom is nearing for both markets is prevailing amongst market players. Speculations about some price hikes have even surfaced recently. In Germany, a trader said, “Some converters already reported receiving higher prices from their suppliers when compared to the beginning of the month.” He thinks that sellers will come with rollover requests and will close their sales early in December. “As we feel that the bottom is near, we are now trying to secure as many cargoes as possible to avoid being left with no stocks when our suppliers sell out,” he added. Another trader in Hamburg said that he found these increase talks unrealistic for now. However, he underscored, “Regional producers have relieved their stock pressure and they are no longer aggressively selling. Hence, they may try to achieve a stable trend next month.” A similar situation is in place in the Italian market. A homo PP buyer admitted, “Competitive prices are not heard as widely as before. Plus, sellers do not appear to be under so much sales pressure anymore and they are not likely to give into further decreases next month.” The spot PE market was also reported steady this past week in Italy for the first time since the recent downturn started in mid September. “In order to avoid a situation like we experienced in July of this year, when the trend turned upward all of a sudden and we were left with empty stocks, we would like to guarantee some stocks before prices hit the bottom,” a buyer commented. Even though some buyers continue to believe that a firming trend is unjustified in the midst of low demand, comfortable supplies and softer costs, several buyers have started to engage in more purchases in recent days.