Geopolitics set back trading activities in Middle East

Across the Middle East, PP and PE markets have exhibited a steady to slightly softer path for October. The bearish pressure from dwindling demand along with ongoing geopolitical developments, particularly the continuing war in Gaza and Lebanon, continued to shape October price trends despite the developments in feedstock markets. Meanwhile, arising supply concerns amid broader and intensifying hostilities result in a gloomy seen for November.

Saudi markets remain on soft note

In Saudi Arabia, October PP offers marked a third month of consecutive decreases after a short-lived uptrend recorded in June and July. Nevertheless, the size of price concessions continued to be relatively small amid margins preservation targets. Generally, PP offers were slightly down by SAR53/ton ($14/ton) when compared to September levels.

Also, October PE offers from a Saudi major indicated rollovers to SAR37/ton ($10/ton) decreases when compared to a month earlier. Generally, LDPE and LLDPE offers have stabilized at their highest levels since May 2023, according to data from ChemOrbis Price Index, while slight decreases were reported for HDPE grades. “Demand in Saudi Arabia remains moderate yet, ongoing economic uncertainty linked to oil price volatility and global inflation continue to restrain any significant demand revival,” a market source opined.

UAE sellers confirm subdued demand, plan to gauge supply front

In the United Arab Emirates, Middle Eastern suppliers revealed their initial October PP and PE offers mostly with rollovers when compared to the latest September levels. Similarly, local PP prices were assessed largely stable on a monthly comparison.

“Currently, there is no widespread expectation of a near-term surge in purchasing activity amid macroeconomic challenges and approaching year-end lull hence, sellers kept their offers unchanged to evaluate firm bids from customers in the midst of supply disruptions concerns,” commented a manufacturer.

War woes hit East Med markets

In the East Mediterranean region, the recent war outbreak has severely impacted trading activities, introducing heightened risks and uncertainties into the market. Coupled with chronical economic challenges and currency depreciation, buyers are questioning whether supply concerns will continue to shape prices during Q4 or discounts on deals amid dull derivative demand and year-end destocking activities could be obtained.

In Jordan, players received October PP and PE prices mostly with rollovers when compared to September levels. According to players, the recent political unrest had contributed to October pricing as the market relies heavily on import flows and any disruption in regional supply routes could lead to tighter supplies and higher prices.

In Lebanon, October PP offers emerged largely stable from a month earlier whereas PE offers were assessed stable to slightly softer from September, with competitive US origins forming the low ends of the overall price ranges. Earlier this month, Israel invaded Southern Lebanon in an escalation of the ongoing Israel–Hezbollah conflict, a spillover of the Israel–Hamas war.

Eyes to stay on costs, political developments

Over the near term, players discuss if November prices will extend decreases under current conditions. The unpromising downstream demand along with prolonging economic challenges and traditional year-end destocking activities, all call for a bearish trend to prevail for November. Nevertheless, feedstock markets fluctuations along with supply chain dynamics amidst the current political unrest keep potential decreases under check.