While the recent measures implemented by the government have not yet affected petrochemical production and deliveries within the country, market participants expect potential delays in the weeks ahead.

"Truck drivers don't want to go to Italy," a trader said, adding that health concerns were growing. "Coronavirus is affecting all businesses" a second trader based in Italy said.

Prime Minister Giuseppe Conte extended Italy's emergency coronavirus measures on Wednesday evening and announced the closure of "non-essential" commercial businesses. This follows the announcement of a nationwide lockdown on Monday, limiting the movement for around 60 million people. Under these measures people will only be allowed to leave their homes for work or health reasons.

Italy is the second largest plastic consumer market in Europe, making up for 13.9% of European plastic converter demand, according to the PlasticsEurope Market Research Group. In 2019 total demand in Europe was 51.2 million mt, with 39.7% of demand coming from the packaging segment, the data showed.

According to S&P Global Platts Analytics data, Italy has the largest trade deficit in Europe in polypropylene and linear density polyethylene.

In 2019, Italian net imports of polypropylene from European and non-European countries were around 964,300 mt, the most imported polymer grade in the country. The only producer of polypropylene in the country is LyondellBasell.

LyondellBasell was not available for comment.

Italy's second most imported polymer grade was PVC, with PVC sources bearish looking forward but noting Italian demand had been stable so far. Italy imported some 543,500 mt of PVC during 2019. "Soon the whole of Europe will be on lockdown for minimum two weeks and prices will nose dive," a PVC trader said.

"Right now we do not feel any effect of the corona virus related to PVC -- but everything can change fast," a PVC producer said. "Despite [coronavirus], PVC demand from Italian customers was normal this month. I suppose it will decrease next month [but] our haulier partners informed us that they [will] keep delivering to Italy," the producer continued.

Sources also noted the impact on PE and PP grades may be stronger due to its use in packaging. PVC is used primarily in construction with March and April typically strong months.

Despite logistical disruption in much of the country, some polymer sectors were heard to be experiencing increased demand levels. "Demand wise the situation is strange because some industries have greater demand, including some extra demand for single-use [plastics] because of the new need for this kind of item due to the epidemic," a source said.

Others remained optimistic noting that production was still ongoing with some companies continuing deliveries. "Industrial production has not been stopped but we must have safety measures in place, [but] material is coming and we are delivering," a converter said.

Meanwhile, operations at Italian biggest petrochemicals producer Versalis have not yet been affected by quarantine measures the company told Platts Thursday.

Versalis has three steam crackers in Italy, capable of producing 1.675 million mt of ethylene, 750,000 of propylene and 285,000 mt of butadiene a year, according to Platts Analytics.

Italy's imports and exports of polymers from all countries in 2019

Unit: mt

Source: Eurostat, S&P Global Platts