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African PP, PE markets extend gains into Sept on tightness

by Başak Ceylan - bceylan@chemorbis.com
  • 14/09/2021 (03:08)
In Africa, PP and PE offers for September were firmer as compared to August, largely as a result of diminished supplies from the Middle Eastern and Asian suppliers. Although demand was little changed from last month, the tight supply situation dictated the higher pricing across the regional markets.

No Saudi availability in Nigeria

The biggest polymer market in West Africa made a strong start to September, as a major Saudi supplier cut allocations to Nigeria by a large margin, citing their supply and logistics problems. Meanwhile, new offers for South Korean and Indian materials indicated large increases over August. “Korean supplier’s allocation is also quite limited,” a trader reported. “Limited supplies and higher freight rates fuelled sharp increases,” another trader said.

The latest import offers in Nigeria were at $1690-1710/ton for PPH raffia and inj., $1790-1800/ton for PPBC inj., $1900/ton for PPRC inj., and $1590-1600/ton for LLDPE C4 film, HDPE film, HDPE b/m, and HDPE inj., all on CFR Lagos, excluding 10% CD basis.

ELEME announces rollovers to increases

ELEME, Nigeria’s domestic producer, announced rollovers or NGN20,000/ton ($48/ton) increases for PE. For PP, some grades saw very small increases of around NGN400-700/ton. Demand remained disappointing, with buyers purchasing hand-to-mouth.

Accordingly, the latest local offers in Nigeria were at NGN1,012,500/ton ($2464/ton) for PPH raffia and inj., NGN1,079,000-1,084,000/ton ($2625-2638/ton) for PPBC inj., NGN790,000/ton ($1922/ton) for HDPE b/m, HDPE film, and HDPE inj., and NGN816,000/ton ($1985/ton) for LLDPE C4 film, all on ex-Port Harcourt City, cash not including 7.5% VAT.

Asian PP offers in Kenya surge

In Kenya, East Africa’s largest economy, a major Saudi producer’s new PE offers were higher by around $10-30/ton at $1340-1350/ton for HDPE film and LLDPE C4 film, and $1630-1670/ton for LDPE film, CFR Kenya, 90 days. The Saudi major’s PP offers also increased by a similar amount to be reported at $1440-1450/ton for PPH raffia and inj., with the same terms.

Meanwhile, PPH raffia and inj. offers for Chinese materials surged to $1700-1710/ton while South Korean materials were at $1680-1690/ton, largely due to record-high freight costs and an ongoing tightness in supplies.

“Supplies from the Middle East are limited and offers from China and India are very high due to increased freight rates,” a trader based in Nairobi said. The trader also said that they were expecting to see further increases over the near-term, largely due to the ongoing shipping issues and tight availability.

Saudi LDPE, LLDPE unavailable in Algeria

In Algeria, North Africa’s largest oil and gas producer, new HDPE film offers from a major Saudi producer increased by around $70-90/ton over August levels to $1450-1470/ton CFR Algeria while there was no availability for LDPE film and LLDPE C4 film.

The producer’s PP offers, meanwhile, were up by around $50-75/ton from levels in August to stand at $1500-1550/ton, with the same terms.

South Africa market follows suit despite low demand

South African markets saw rollovers to moderate increases ranging from $10/ton to $30/ton as compared to August levels. “Supplies from Saudi producers are very restricted this month and this is supporting the firm trend. But sales are disappointing and demand is still weak,” a trader in Durban said.

The September price range in South Africa was at $1320-1350/ton for HDPE film, $1570-1670/ton for LDPE film, and $1300-1350/ton for LLDPE C4 film, all on CFR Durban, 90 days basis.
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