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African PP, PE markets start Q4 in limbo amid varying pricing policies

by Başak Ceylan - bceylan@chemorbis.com
  • 09/10/2019 (04:15)
In Africa, buyers and sellers struggled to find a common ground in pricing for October. New offers ranged in a variety of different policies, from rollovers to increases or decreases, depending on the suppliers’ inventories and the state of demand.

Buyers try to negotiate Saudi major’s offers in Egypt

In Egypt, price discussions began taking place for October, while players deemed that it was still too early for determining a clear direction for price targets. Even though the initial talks with a major Saudi producer indicated notable increases as compared to last month, the majority of players reported confidence that the producer would be willing to negotiate the offers down in the coming days.

Other Mid-Eastern producers reveal flat-to-higher offers to Egypt

The other Middle Eastern suppliers also unveiled their new offers to Egypt with rollovers to increases from last month. Suppliers said that hikes were necessary mainly due to lower-than-average prices in September, as well as the increases seen in feedstock costs in the latter half of September.

Buyers, meanwhile, highlighted the fact that energy markets erased the previous gains after Saudi producers resumed normal feedstock supplies.

This gradually pave the way to doubts that the recent steady-to-firm trend in Egypt’s import PP and PE markets would not be sustainable in the short-term.

Egypt’s local PP producer rolls prices while PE producers announce hikes

One of the two local PP producers of Egypt snapped a trend of four consecutive month-on-month falls and rolled over its new PP raffia and fibre prices from last month. On the other hand, two local PE producers revealed increases ranging between EGP600/ton ($35/ton) and EGP1000/ton ($59/ton), citing increases in the import market.

Saudi supplier justifies hikes in Morocco on limited supplies

The dim outlook and mixed pricing strategies spread to the other parts of North Africa. The Saudi major’s new offers to Algeria were largely stable, with reports of discounts to stir sluggish demand. Prices were also largely stable in Tunisia as substantial hikes would have been unworkable amid weak buying in the market, players reported.

Early offers in Morocco were higher from last month as the Saudi supplier was reportedly struggling with delayed deliveries and limited allocations. Buyers, on the other hand, still prefer to remain sidelined, monitoring the global market trends before procuring cargoes for October.

Initial Oct offers steady in East Africa

Early PP and PE offers in Kenya were steady compared to last month. A distributor who reported rollovers from the Saudi major said, “This year has been unsatisfactory for our businesses, so we remain cautious about our purchases. Demand is still weak and prices remain elevated.”

According to ChemOrbis Price Index, the average of current PP and PE offers in East Africa currently stands 15% and 20% lower, respectively, as compared to a year earlier period.

October offers largely soften in West Africa

Contrary to the other parts of the continent, import PP and PE markets in Nigeria were predominantly stable, or saw some decreases compared to last month. However, stable-to-lower pricing strategy failed to prop up demand in the country as buyers reported sticking with hand-to-mouth purchases.

Nigerian producer cuts prices as support from cost-side fades

The local producer, ELEME’s latest offers in Nigeria went down by NGN12,000-26,000/ton ($33-72/ton) from September. A buyer said, “Feedstock costs started retreating after crude oil prices fell back to earth,” referring to the drone attack that sent oil prices skyrocketing during the second half of September.

Another Nigerian distributor opined that the domestic producer’s prices would undergo another round of decreases by the middle of the month due to weak buying activities.
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