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Oct PP, PE offers emerge firmer in Europe in midst of unpromising demand

  • 05/10/2017 (04:21)
In Europe, PP and PE sellers adopted a firmer stance for another month in line with the earlier expectations, following the settlement of monthly monomer contracts with €30/ton hikes. The extent of the stock pressure on the sellers’ side seems to have determined the size of hike attempts for October. However, buyers are widely skeptical if sellers will achieve margin improvement in October after they already did it in September.

As for PP, some sellers are offering with hikes matching the propylene’s upsurge or more modest increases due to slow demand while others are asking for larger increases, citing their limited allocations.

A West European producer, who announced €50/ton increases for PP, said, “The number of the orders we receive is limited and demand is calm given the second consecutive month of price hikes. Overall supplies are in balance with demand except for some tightness in PP copolymer grades.”

“Our West European supplier applied €60/ton hikes, pointing to the dwindling supplies from the Brazilian plant. We prefer to stick to the sidelines for now as we believe that sellers might revise their offers down if they cannot reach their sales target,” added a buyer in Italy.

In the PE market, October offers are revealed with rollovers to increases of up to €50/ton both from the regional and overseas suppliers.

A distributor from Italy noted, “As for LDPE, the pressure is stronger. Therefore, we offer West European and Iranian origins with increases of €30-40/ton. However, we think that producers will adjust their current offers down given quiet demand.”

A reseller in Switzerland also commented, “Demand is weak for HDPE inj. in particular. Therefore, we didn’t apply any hikes on our import and locally held prices for Middle Eastern origins. Moreover, buyers already built stocks in August, which might help them resist the current hike requests.”

The fact that buyers’ stocks are already high and they will try to avoid building stocks towards the year-end might convince sellers to step back from their initial hike attempts. Some market participants have claimed that lower prices are already available in the distribution channel.

A buyer in Belgium has already settled October prices, paying €30/ton increases. He commented, “We received some spot PP offers for Central and West European origins with €40/ton hikes. We only source as needed as we still have good stock levels. Furthermore, we are not sure if the trend will remain bullish in November and December.”
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