Initial reactions from Egyptian players to austerity measures
Players were shocked by the extent of these price hikes as they were expecting more modest increases. They are now evaluating the possible impacts of the newly introduced measures in the long-run.
The market response has been restricted so far as many players are still away from their desks, with some of them bridging the whole week to the next Monday after the Eid holidays.
However, the majority of market players think that the reflection of rising costs will be hike attempts on the producers’ side. “Egypt’s Minister of Electricity has recently announced price hikes and producers are likely to increase their offers in accordance with the higher costs,” a source from one of Egypt’s local PP producers said.
In the distribution channel, meanwhile, offers for most polymers have already posted slight increases compared to the pre-Eid week, which were attributed to the rising fuel, transportation and electricity costs. However, trading activity remains stagnant given the lingering holiday lull.
A seller noted, “Players are not fully back in harness whereas PP and PE prices rose in response to higher fuel prices as well as further appreciation of the USD against EGP.”
A distributor said, “PP, PE, PS and ABS prices in the distribution market rose by around EGP200-400/ton ($11-22/ton) compared to the previous week given the recent increases in costs. Buyers are upset with the recent hikes we issued as their end-demand is not supportive.”
Several players projected, “Despite the recent hikes in the local market triggered by higher costs, we believe that players will continue to buy their basic needs given tight liquidity. Some players might elect to take a wait and see stance until a clearer picture is drawn while traders are also cautious as they are not confident about the upcoming period.”
More free plastics newsPlastic resin (PP, LDPE, LLDPE ,HDPE, PVC, GPS; HIPS, PET, ABS) prices, polymer market trends, and more...
- Activity pick-up sends Asian spot C3 market into recovery mode
- Total polymer imports to EU28 hit record high in 2019
- March PE expectations in Turkey weighed by new capacities, cooling demand
- PP prices hit 4-year low in China as demand remains minimal
- Taiwanese major’s March PVC offers to Asia up despite virus fears
- Virus-impacted demand inflicts toll on Vietnam's PE market
- HDPE fails to track firmer trend of LD, LLDPE in Europe
- China’s ABS market on soft path dragged by subdued demand
- Softening trend prevails in SEA PP market as virus fears dampen sentiment
- Chinese producers cut PET offers further amid coronavirus outbreak