Skip to content


Asia Pacific

  • Africa

  • Egypt
  • Africa
  • (Algeria, Tunisia, Libya, Morocco, Nigeria, Kenya, Tanzania, South Africa)

Filter Options
Text :
Search Criteria :
Territory/Country :
Product Group/Product :
News Type :
My Favorites:

Activities on hold in Egypt as players monitor bullish environment

by Başak Ceylan -
  • 29/03/2022 (10:00)
Egypt’s domestic polyolefin markets witnessed a fresh round of price increases last week, driven by the central bank’s surprise interest rate hike which allowed the EGP slip against the USD. Activities suffered from weak demand and liquidity issues while expectations were for further price increases in April amid high costs and tightened supplies.

Largely steady uptrend on high costs, tight supply

Local markets have been on a steady uptrend since early-to-mid February, which coincidentally followed another decision taken by the Central Bank of Egypt (CBE). The decision instructed banks to stop accepting documentary collections to finance imports and required importers to open letters of credit to import goods.

The decision roiled the markets as most traders believed that it would drive up costs and worsen the activities in the market, which had already been grappling with tight cash liquidity. As distributors moved on to use these new set of rules as leverage in price discussions, local PP and PE markets started seeing sharp increases.

A fairly steady uptrend followed until mid-March, during which local sellers took a step back and trimmed prices standing at the top end of the ranges. However, these discounts proved to be short-lived as sellers returned to the market with renewed price increases, citing tighter local availability and higher replenishment costs.

Further increases follow rate hike and devaluation

Although assessments are still ongoing, the unfolding events in Eastern Europe look set to leave a negative short-term impact on global economic growth. Global economies are expected to face numerous spillover effects from the conflict and emerging markets like Egypt remain particularly vulnerable.

With a three-year high inflation looming over the financial markets, the CBE raised interest rates for the first time since 2017 after calling a special monetary policy meeting on March 21. The CBE allowed the EGP slide against the greenback and the currency hit as low as 18.50 per dollar last week.

Following this rate hike announcement, the Egyptian authorities requested support from the IMF to mitigate the impact of the Ukrainian crisis on the Egyptian economy. This reminded players of the devaluation in 2016, which came as part of demands by the IMF to secure a $12 billion loan.

The devalued currency added to already elevated price pressures and brought sharp increases in local market. Local HDPE film offers rose as much as EGP6,500/ton ($355/ton) while LLDPE film and LDPE film offers ended last week with increases of EGP4,500-5,500/ton ($245-300/ton). Local producer SIDPEC revised their initial offers for March, announcing increases for all its PE grades of EGP3,000/ton ($164/ton).

Domestic PPH inj. and raffia offers also saw increases of up to EGP6,000/ton ($328/ton) during the week ending March 25. However, these rapid and sharp jumps in domestic prices pushed buyers further away. Buyers largely held off on purchases and only committed to immediate requirements amid the volatile pricing environment.

Outlook bullish but how will demand hold out?

“More price increases are anticipated in April unless oil steps back significantly on de-escalation of the crisis in Ukraine. At the same time, a large number of traders are still facing challenges in importing materials and liquidity is very tight. The near-term outlook is bullish but demand is still subject to concerns. Ramadan is nearing and it is traditionally a slower month,” a distributor noted.
Free Trial
Member Login