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Italy’s PE market stays bullish ahead of supply relief

by ChemOrbis Editorial Team - content@chemorbis.com
  • 13/05/2015 (14:58)
In Italy, the PE market remains bullish as sellers are maintaining their firm stance while pointing to the prevailing tightness. A West European producer issued hikes of €150-160/ton on their May PE contracts, bringing their prices to €1600/ton for LDPE film and to €1580/ton for HDPE blow moulding on an FD, 60 days deferred payment basis. A producer source commented that overall supply remains short.

In the spot market, the latest PE prices are at €1550-1650/ton for LDPE, at €1560-1650/ton for LLDPE and at €1530-1650/ton for HDPE FD Italy, 60 days. These levels are up by €30-50/ton on the low ends compared to last week while they are suggesting rollovers to €20/ton increases on the high ends.

Distributors are reporting increases between €150-200/ton on their May PE deals. One distributor commented, “We have almost sold out our May allocation as supply is quite short this month while buying interest is good. For June, we have heard different expectations. Some players think that PE prices are near the peak while others consider further hikes to be possible.”

A converter received offers for May PE contracts with hikes of €150/ton due to short supply, commenting that he is concerned as the upward trend seems unlikely to end soon.

However, supply concerns are expected ease in the upcoming weeks as European producers have started to lift their force majeure declarations on PE. SABIC lifted a force majeure on supply from their LLDPE/HDPE swing plant in Gelsenkirchen, Germany on April 28. The force majeure was issued on March 30 due to technical issues. In addition, Versalis lifted their force majeure on PE from Dunkirk, France, according to reports late last week.

Borealis has also lifted their force majeure on PE supply from Schwechat, Austria as of today. Market sources said that the company’s plants are operating at full rates following restart and that their monomer availability has returned to normal levels.
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