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PVC sellers aim for full c2 hikes, buyers reluctant to pay in Italy

by ChemOrbis Editorial Team -
  • 04/01/2017 (17:05)
In Italy, sellers who are willing to recover their lost margins plan to approach the market with increases matching monthly ethylene hikes. Back in December, some PVC sellers had conceded to discounts surpassing half of the €30/ton drop in the ethylene contracts. January ethylene contracts were fully settled at €985/ton FD NWE, up €45/ton from December.

A West European producer whose January sell ideas indicate €45/ton hikes from last month reported that they are yet to issue official offers. A producer source stated, “We will wait to see market reaction before deciding whether to trim our hike targets or not. We expect demand to be good and buyers to source regular volumes this month.”

A distributor reported that he did not receive official offers yet, but he thinks that suppliers will ask for half of the cost of the monomer increase, which is expected to refer to €20-30/ton increases. He added, “The market will remain quiet until next week since most converters are still on holidays.”

Meanwhile, a compounder who received a few January offers with €25-30/ton hikes reported that they are not willing to pay increases beyond half of the monomer hike and the buyer stated that they expect to pay €20-25/ton increases instead. The buyer also commented, “There are some suppliers aiming for larger hikes to recover their margins. Demand is good for now in the compound business line and import material is not abundant due to the euro-dollar parity. We also expect an upward trend for February.”

A different distributor also announced initial offers with larger hikes than half of the cost of the ethylene, claiming that prices were already low in December. The seller added, “We expect overall demand to be weak and producers might divert their cargoes to the export destinations in case their levels are not appreciated in Italy. Demand is to set the tone of the market if buyers decide to restock.”

In Italy, overall PVC ranges stand at €860-960/ton for k67 and at €870-990/ton for specialty grades on FD Italy, 60/90 days.
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