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Bearish sentiment largely pervades Mid-East PP, PE markets in May; eyes on June outlook

by Nada Samir -
by Esra Ersöz -
  • 22/05/2024 (13:32)
Players in the Middle Eastern PP and PE markets received May offers mainly with slight decreases and some sporadic rollovers from April. This is the second month in a row the sentiment remains weakened across the region amid loosening availability. Eyes are now on June amidst questions of whether the markets will follow the global uptick, or the approaching festivities will impede demand further, keeping prices on the weak side.

Saudi markets head south in May first time since February, except for LDPE

In Saudi Arabia, May offers from a major domestic producer indicated SAR75/ton ($20/ton) decreases for PE; except for LDPE prices which remained unchanged. Also, PP offers indicated SAR73-109/ton ($19-29/ton) decreases as compared to April levels after three consecutive months of increases.

According to industry sources, SEPC (Saudi Ethylene and Polyethylene Company) shut its LDPE unit in late April for maintenance, which can be blamed as the stable pricing for LDPE.

On the flip side, players reported comfortable PP supplies inside Saudi Arabia as Advanced, Al-Waha and Yanpet all returned from their shutdowns latest by April. “Trading activity is a tad better. Buyers need to replenish their stocks, yet they are hesitant to commit to large-volume purchases amid the ongoing uncertainty,” a distributor opined.

Imports down in UAE, local PP prices stable for 2nd month

Middle Eastern producers also opted for price concessions in the United Arab Emirates. Major regional suppliers applied rollovers to $20/ton decreases on PE and $20-40/ton decreases on PP compared to latest April levels.

On a related note, May offers in the local market emerged with rollovers from April, marking the second month of steadiness. The producer resumed operations by mid-April following a maintenance shutdown. “Demand has seen improvement subsequent to the less prompt supplies; however, margins on end products have concurrently diminished,” commented a local source.

Sluggish demand, political woes keep bear sentiment in East Med

In East Mediterranean region, a major Saudi producer’s PP and PE offers to Jordan were announced with minor discounts as compared to April ranges. Players reported thin trading activity remains amid the growing political tension in the region.

On a related note, players in Lebanon received May PP and PE offers from a Saudi major with $20/ton decreases when compared to April levels. Players complained that Lebanon’s infrastructure is suffering dramatic losses from the ongoing war in the region, hindering the country’s economy further. Hence, purchases remained tied to the immediate needs.

Will further declines follow in June?

Players across the region expect resin prices to remain on the soft side during June, with slow derivative demand considered a key driver behind the bear footing, especially with an extended Eid al-Adha holiday during June. “Despite the hikes requests seen in other global outlets, players do not find hike attempts feasible considering the state of derivative demand, political tensions and nearing Eid al-Adha holiday,” a regional source opined. The upstream markets are also not providing leverage for sellers’ possible hike requests; however, the rebounding sentiment in Asia and partly in Türkiye may put a floor under bearish sentiment next month.
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