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African PP, PE markets slip amid lull in activities and demand

by Başak Ceylan - bceylan@chemorbis.com
  • 19/07/2022 (23:35)
Overall PP and PE market levels slipped amid weakened market activities and unpromising end-product demand across African markets in July. Buyers were particularly reluctant to engage in new purchases in North Africa amid a holiday-shortened month while trading in West and East Africa was subdued, with players reporting comfortable supply levels.

Prices drop by triple-digits in Kenya

In East Africa, a Saudi Arabian producer’s new PPH raffia and inj. offers to Kenyan markets were substantially lower by $220-230/ton month-on-month while offers for South Korean PPH raffia and inj. grades slumped by $300/ton as compared to overall price ranges in June.

PE offers in Kenya were also lower by $140-150/ton for LLDPE C4 film, and $160-170/ton for HDPE film and for LDPE film from June levels.

The overall ranges were reported at $1550-1570/ton for LDPE film, $1440-1450/ton for LLDPE C4 film, $1420-1430/ton for HDPE film, $1300-1380/ton for PPH raffia and inj., $1420-1450/ton for PPH fibre and film, all offers on CFR Kenya.

Purchases hand-to-mouth in Nigerian market

In West Africa, depressed demand amid rainy season and comfortable supply levels brought continued price reductions as compared to June. A major Saudi producer’s July offers were announced with monthly decreases ranging between $40-80/ton. According to Nigerian market participants, activities remained limited, with most buyers purchasing hand-to-mouth.

The country’s local supplier ELEME’s offers also reflected weak sentiment. The producer’s initial PP offers decreased by NGN65,000-70,000/ton ($155-167/ton) as compared to June levels while PE offers were largely unchanged when compared to last month.

However, a continued weakness in trading and demand pushed the local producer to announce a new round of price cuts by mid-July. New offers were slashed by NGN25,000/ton for PE and NGN60,000/ton for PP grades.

Following these changes, local prices were at NGN1,033,600/ton ($2495/ton) for PPH raffia, NGN1,023,900-1,047,800/ton ($2471-2529/ton) for PPH inj., NGN1,079,000-1,107,500/ton ($2065-2063/ton) for PPBC inj., NGN1,065,000/ton ($2570/ton) for HDPE film and HDPE inj., NGN1,070,700/ton ($2584/ton) HDPE b/m, and NGN1061000/ton ($2561/ton) for LLDPE C4 film, all on ex-Port Harcourt City, cash not including 7.5% VAT.

North African players take caution

In North Africa , players continued to take caution while buying as most of them forecast further price drops ahead. Announced during the week preceding the Eid al-Adha holiday, new PE offers in Morocco suggested rollovers to €50/ton decreases. PP offers were also announced lower by as much as €150/ton from last month.

Despite the monthly drops for most grades, activities failed to show a significant improvement in Morocco as most players had expected steeper price discounts for July. As a result, expectations were largely for continued price concessions from Saudi producers following the Eid holiday.

July offers in Tunisia were announced with decreases of €30-50/ton for PE grades. PP offers also decreased by as much as €100/ton.

In Algeria, the size of price drops failed to meet expectations. New offers for PP grades were lower by $10-20/ton from last month at $1630-1640/ton for raffia and inj., and $1680-1690/ton for fibre and film. "The current offers are still very elevated and not at all compatible with the market conditions. So we are holding off purchasing and waiting to hear more offers," a trader based in Algiers said.
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