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African PP, PE markets soar to record highs in March

by ChemOrbis Editorial Team -
  • 09/03/2021 (15:47)
African PP and PE markets continued to rise in March as the recent production disruptions in the US exacerbated the already tight global supply situation. Although demand was hardly changed from last month, the supply-driven hikes pushed prices to new highs in the regional polyolefin markets.

Petrochemical facilities along the US Gulf Coast were brought to a near halt by a winter storm that lasted from February 13 to February 17. As the winter storm idled almost 100% of resin and feedstock output in Texas, the supply situation tightened even further in global markets. The Middle Eastern suppliers’ allocations to the African markets too were heavily affected.

Although some facilities were heard resuming operations gradually in the US, a large capacity of output remains offline in the region.

Domestic markets continue to tack on gains in Nigeria

In Nigeria, the biggest polymer market in West Africa, March offers from a domestic producer were higher by NGN20,000-25,000/ton ($52-65/ton) over the latest February levels for PE grades. The producer’s PP offers saw a larger increase of NGN90,000/ton ($236/ton) from the previous levels.

These changes brought the producer’s March price list to NGN976,800/ton ($2563/ton) for PPH raffia and inj., NGN1,043,000-1,047,500/ton ($2737-2749/ton) for PPBC inj., NGN845,000/ton ($2217/ton) for HDPE b/m, HDPE film, and HDPE inj., and NGN777,000/ton ($2039/ton) for LLDPE C4 film, all on ex-Port Harcourt City, cash not including 7.5% VAT.

The local producer had previously revised their initial February offers higher by NGN20,000/ton ($53/ton) for most PE grades and by NGN50,000-90,000/ton ($132-236/ton) for PP grades, citing higher overseas landing cost, as well as an increase in port charges and transport costs, as factors behind the price increase.

Import PPH prices at all-time high in Nigerian markets

Import prices in Nigeria were also markedly higher from the previously available levels in February. A major Saudi producer’s PP offers surged by around $600/ton over last month, coming in at $2000/ton for PPH raffia and inj. and $2090/ton for PPBC inj., CFR Lagos, excluding 10% customs duty. These are the highest levels recorded since ChemOrbis started tracking data in 2013.

As compared to February, LLDPE C4 film offers were higher by around $180/ton while LDPE film and HDPE film offers were higher by around $270/ton and $290/ton, respectively. Accordingly, the latest import PE offers in Nigeria were at $1590/ton for HDPE film, $1850/ton for LDPE film and $1400/ton for LLDPE C4 film, CFR Lagos, excluding 10% customs duty.

Record high levels seen for PPH, LDPE film in Kenya

In Kenya, the largest economy in East Africa, new offers for Saudi PPH raffia and inj. materials were significantly higher by $400/ton over February at $1850/ton CFR Mombasa. Chinese PPH raffia and inj. materials were at more competitive levels at $1650/ton CFR Mombasa, albeit $200/ton higher from the previous levels. With these changes, the latest PPH inj. and raffia offers in Kenya climbed to their highest since ChemOrbis began compiling data.

Saudi PE offers also saw increases ranging from $150/ton to $200/ton over last month, coming in at $1450/ton for HDPE film, $1700/ton for LDPE film and $1350/ton for LLDPE C4 film, with the same terms. According to ChemOrbis Price Index, the current LDPE film prices stand at their all-time high.

“Supply remains very tight and some sellers refrained from offers this month. Demand is moderate and relatively better than last month but the COVID-19 continues to pressure the markets,” a trader based in Nairobi said, adding that curfew was still in place.

Offers skyrocket on tightness in Algeria

In Algeria, a reference market for North Africa, Saudi HDPE film materials were $320-330/ton higher from last month. LLDPE C4 film prices were $250-270/ton firmer while LDPE film prices surged by around $370/ton to reach their highest ever recorded levels.

Accordingly, the latest PE offers were at $1570-1580/ton for HDPE film, $1500-1520/ton for LLDPE C4 film and $1870-1890/ton for LDPE film, CFR Algeria, 90 days basis.

Saudi PPH raffia and inj. offers were at an all-time high at $1900-1920/ton CFR Algeria, skyrocketing by $450/ton month-on-month.

"The market is very short and we are struggling to find materials," a trader based in Algiers said.
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