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Size of PE price hikes under discussion in Italy

by ChemOrbis Editorial Team -
  • 10/01/2017 (17:39)
PE sellers in Italy approached the market mostly with increases matching the €45/ton hike achieved in ethylene contracts as they do not expect demand to pick up due to the pre-buying activities in December. On the other hand, some suppliers were heard looking for larger hikes than that of ethylene, citing that their availability is limited.

A converter who has just come back from holidays reported, “We heard increases of €50-70/ton; however, we hope to pay only the monomer contract hikes. We plan to make more price inquiries before purchasing.”

A distributor offering on behalf of a Qatari producer reported that their supplier seeks to obtain €60/ton increases, citing their allocations are very low for January. Their offers are reported at €1240-1260/ton for film and bm, and €1220/ton for LLDPE on FD Italy, 60 days deferred payment basis, standing close to the high end of the overall ranges in Italy.

A trader from the Netherlands reported applying further hikes for January PE prices and added, “We are willing to revise our new offers depending on demand in the following weeks. Imports are uncompetitive due to firm Asian prices and unfavorable exchange rate.”

However, players are generally finding the sellers’ attempts to seek larger increases than ethylene on PE unrealistic as some buyers are unwilling to pay even the full ethylene hike in their monthly PE deals. Buying interest is expected to be slow as most buyers are reported to be covered for January.

A South European producer is sure that customers are able to pay €45-50/ton hikes without resistance. “Although they are ready to accept the full ethylene hike in PE deals, they are ordering small quotas,” a producer source said.

A converter receiving official offers from his regular South European supplier with €45/ton hikes commented, “We assume that producers may not be able to obtain hikes beyond €20-30/ton due to the weak demand.”

Another converter reported a West European producer is seeking the entire ethylene hike, but the buyer refused to pay as he prefers to negotiate the price down for a modest hike.

In Italy, overall PE ranges currently stand at €1280-1350/ton for LDPE, at €1160-1220/ton for LLDPE and at €1190-1300/ton for HDPE film and b/m on FD Italy, 60 days.
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