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African PP, PE markets firmer on continued tightness in supplies

by Başak Ceylan - bceylan@chemorbis.com
  • 10/02/2021 (03:44)
In Africa, regional markets kicked off February on a strong note as a continued tightness in supplies kept sellers’ stance bullish. However, demand was moderate-to-weak across the continent as COVID-19 related concerns remained as the key driver.

Nigerian producer ops for hikes amid tight allocations

In Nigeria, a key market for polymers in Africa, February offers from a domestic producer were higher over January levels. Accordingly, the local producer ELEME announced increases of NGN40,000/ton ($105/ton) for PE grades and also increases of NGN110,000/ton ($289/ton) for PP grades.

These changes brought the producer’s February price list to NGN836,800/ton ($2199/ton) for PPH raffia and inj., NGN863,000-867,500/ton ($2268-2280/ton) for PPBC inj., NGN7800,000/ton ($2102/ton) for HDPE b/m, HDPE film, and HDPE inj., and NGN757,000/ton ($1989/ton) for LLDPE C4 film, all on ex-Port Harcourt City, cash not including 7.5% VAT.

“Market players are still waiting to hear more offers from the Middle Eastern before committing to any fresh purchases,” a converter said, adding that the local producer’s allocations were quite limited. ELEME was heard to be running at lower operating rates but this was not confirmed directly by the producer.

LDPE, PPH raffia-inj. prices at highest since 2015 in Kenya

New import PP and PE prices in Kenya, the largest economy in East Africa, remained on an upward trajectory in February. Saudi HDPE film and LDPE film grades saw monthly increases of $60-70/ton and $80-90/ton respectively while LLDPE C4 film offers increased by $100/ton over January. Offers for Saudi and Chinese PPH raffia and inj. materials were also higher by $90-100/ton from last month.

Accordingly, the latest prices in Kenya were at $1230-1250/ton for HDPE film and HDPE inj., $1280-1300/ton for HDPE b/m, $1200-1220/ton for LLDPE C4 film, $1520-1550/ton for LDPE film, $1420-1440/ton for PPH raffia, $1430-1440/ton for PPH inj., all on CFR Mombasa, Kenya, 90 days basis.

As ChemOrbis Price Index shows, these changes brought the weekly average of LDPE film and PPH raffia and inj. import prices to their highest since mid-2015. HDPE film and LLDPE film offers, meanwhile, stood at their highest in two and a half years.

“Supply remains very tight and some sellers refrained from offers this month. Demand is moderate but is a bit better than last month. COVID-19 situation is still worrying and the nightly curfew is in effect up to March 12,” a trader in Nairobi said.

Tightness brings hikes of up to $100/ton in Algeria

In Algeria, a key market in North Africa, LDPE film and HDPE film offers from a major Saudi supplier were $20-40/ton higher while LLDPE C4 film prices remained unchanged on a monthly basis. Saudi PPH raffia and inj. offers, meanwhile, increased by $70-100/ton from January.

The latest offers were at $1250/ton for HDPE film, HDPE inj., and LLDPE C4 film, $1500-1520/ton for LDPE film, $1420-1450/ton for PPH raffia and PPH inj., $1460-1470/ton for PPH film and PPH fibre, and $1580/ton for PPBC inj., all on CFR Algeria, 90 days basis.

“The availability for PPH, HDPE film and LLDPE C4 film is extremely tight. Demand is moderate and short availability has become a concern for market players as most of them are not able to source enough materials to operate their plants,” a trader in Algiers said.

Supply in balance as demand remains weak in S. Africa

In South Africa, February PE offers from the major Saudi supplier were $70-80/ton higher for HDPE film and LLDPE film, and also by $90-100/ton for LDPE film. The latest offers were at $1250-1280/ton for HDPE film, $1530-1560/ton for LDPE film and $1210-1230/ton for LLDPE C4 film, all on CIF, cash basis.

“Supply remains restricted but it is somehow balanced with demand. We think a market saturation point is near and sellers might not be able to push for higher prices next month,” a trader based in Durban said. As ChemOrbis Price Index shows, the monthly average of import PE prices in South Africa has risen by around 60% to 80% since mid-2020.
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