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African PE, PP markets extend slide into May

by Nada Samir -
  • 23/05/2023 (02:14)
In Africa, PP and PE markets saw lower offers from the Middle Eastern supplies for May, marking the second consecutive month of price cuts. The recent decreases came amid weakened market activities and demand, following rising inflation and recession woes hitting the region.

Nigerian PP, PE markets down considerably for May

May kicked off in West Africa’s largest market, Nigeria, on a weak footing, after the market was assessed largely stable all through April. Players in the import market reported initial May offers from a major Saudi supplier with rollovers to $70/ton decreases for PE and $40-70/ton decreases for PP when compared to initial April levels. However, the landscape in Nigeria became increasingly competitive following an influx of South Korean and South African PP and PE cargoes to the market at more competitive levels as compared to their Middle Eastern counterparts. This pressured Middle Eastern suppliers into offering additional discounts of up to $100/ton on the initially announced levels.

On a related note, the country’s local producer, ELEME, revealed the new May offers with NGN39,700-40,000/ton ($86-87/ton) decreases for PE and NGN58,400-75,100/ton ($127-$163/ton) decreases for PP from April. “We are closely monitoring the global markets for a sense of direction as global sentiment remains weak. Slow demand and high inventories are also pressuring prices," a trader based in Lagos said.

Kenya’s PP, PE markets fall as Saudi major steps back

In East Africa, offers from a major Saudi producer in Kenya were more or less unchanged from April, which marked the second consecutive month of prices steadiness. However, poor buying appetite has forced sellers to concede to lower deals, and discounts of up to $80/ton for PP and $100/ton for PE were achievable on deals. Generally, players complained about the continuous inflation hikes which slow down economic growth and make it more challenging to keep their business running.

Mid-Eastern sellers backpedal in North Africa

Over North Africa, players in Morocco reported receiving new May offers with rollovers to €30-60/ton ($33-66/ton) decreases when compared to initial April levels. A Casablanca-based trader reported weak buying appetite amid bearish sentiment in the end-use market hence, sellers revised their offers again by up to €60/ton ($66/ton) later compared to the initially announced levels.

Likewise, initial May PP, PE prices in Algeria indicated rollovers from April, while the latest deals stood lower than the initial prices by $60-120/ton. “Sellers have offered more competitive prices inan attempt to trigger demand; however, purchases remained from hand to mouth amid slow overall activities,” opined a local trader.

Similarly, initial May PP, PE offers emerged in Tunisia with rollovers from April. Sellers, meanwhile, were forced to concede to lower deals given muted trading activity and up to €50/ton ($54/ton) discounts were passed on May deals.

Further bearishness ahead for June

Now, the attention has turned towards possible pricing scenarios for June. Expectations call for further price declines, given lower crude values in addition to weak global sentiment amidst slow economic growth and recession woes. All these factors keep the outlook disappointing for June
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