African PP, PE markets see first hike attempts in January after almost a quarter

In Africa, polyolefins markets ended the weak undertone that prevailed across Q4 2024, as firming upstream markets, shipping hiccups and tight supplies from Mid-East producers have bolstered the sentiment and renewed sellers’ confidence despite weak derivative markets.

Nigeria’s import markets partially recoup December losses

In Nigeria, the largest African market, January PP and PE offers from a major Saudi producer indicated increases of $20-60/ton after they incurred up to three-digit decreases in December given year-end destocking activities and aggressive US offers.

ChemOrbis Price Index suggests more hikes on the low ends due to the absence of the US origins for January. A local distributor argued that slight discounts could be achieved for firm bids, succumbing to the pressure from thin buying appetite and holiday lull looming over the market.

Dangote set to start up by May

Meanwhile, Dangote Petroleum Refinery was set to commence its PP production in October last year. Although the refinery started operations as the largest in Africa, the producer delayed the start-up of PP plants to April-May, with plans to reduce Nigeria’s reliance on imported polypropylene. The plant, which is capable of producing about 900K tons of polypropylene per annum, is expected to come online in stages.

ELEME bucks the overall trend amid stock, FX pressure

Nigeria’s local producer ELEME announced NGN175,000-176,200/ton ($113-114/ton) decreases for PE offers and NGN125,000-131,200/ton ($81-85/ton) decreases for PP when compared to December levels. According to players, tepid derivative demand and sales pressure enforced a price cut from the local producer for January despite higher imports.

US cargoes’ absence, ME pull CFR Kenya higher

In Kenya, East Africa’s largest economy, a major Saudi producer’s new PE and PP offers were assessed $10-60/ton higher from December. According to players, the absence of US cargoes this month along with supply constraints from the Middle East supported a firming sentiment despite thin derivative markets. “While prices were on the rise, demand remained dull during the holiday season, which kept hikes bounded in a limited scale, especially the PE,” a distributor remarked.

North Africa market sentiment buoyed after 3 months

In North Africa, January prices have seen substantial increases across the region, following the stable to softer trend observed since October. Nevertheless, players across the region question the sustainability of the firming trend amidst weakly performing economies.

In Algeria, players received January PE and PP offers with up to $80/ton increases from a month earlier. According to a local trader, high freight rates and firming global markets supported January prices despite poor buying interest.

In Morocco, players received January PP offers with €40-80/ton ($41-81/ton) increases from latest December levels. Also, PE offers were assessed €20-60/ton ($21-62/ton) higher from December.

In Tunisia, January PP and PE offers in Tunisia were also assessed €40-70/ton ($42-73) higher than December. Shortly after, a Saudi major revised their initial PE prices by €20-70 /ton ($21-73/ton) given buyers’ resistance. “Aggressive US offers which weighed down on December markets were absent this month, which lifted the sentiment despite revised prices,” a local source stated.

Will bullish sentiment persist in February?

Looking ahead, polyolefin players across Africa are wondering whether further hikes requests would be seen for February amidst restrained supplies for Middle Eastern origins. “Prices are likely to hover around their current levels or experience slight fluctuations as demand remains unpromising,” a regional source opined. Although the US has mostly been absent this month following year-end destocking, they may surface again February.