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Irregular Asian PP, PE cargos offer competitive edge in Africa

by ChemOrbis Editorial Team -
  • 07/04/2017 (03:57)
African polyolefin markets started April on a stable to firmer note as limited allocations from several Middle Eastern producers as well as unexpected supply issues emerging on the part of South African Arya Sasol supported PP and PE sellers on their pricing policies.

By the end of March, South African Sasol’s PE and PP exports were delayed due to a serious fire that broke out in a warehouse in Durban. All PP, LDPE and LLDPE stocks, which were being prepared for March and April orders, were reportedly lost after the fire.

Nevertheless, the dynamics have been fragile in the regional markets due to a number of factors including fluctuating exchange rates and a recent plastic bag ban in Kenya which kept buying activity muted in general.

In the meantime, competitive PP and PE offers from Asia showed up in Nigeria which stood at or close to the low ends of the import homo PP, LLDPE and HDPE price ranges. Players attributed this to the fact that demand has not been spectacular in China where players were out of the market for the Tomb-Sweeping Day holiday earlier in the week.

Furthermore, China started boycotting South Korea’s Lotte in early March after the company decided to hand over its golf club in Seongju to US THAAD (Terminal High Altitude Area Defense) after the Chinese New Year. The boycotts had a negative impact on South Korea’s polymer exports to China in early March as Chinese banks refused to provide loans to Lotte’s customers, which pushed South Korea to shift exports to other markets. “This might have paved the way for Korean PE offers to surface in the Nigerian market this week,” said players.

Irregular Indian homo PP prices also appeared in Nigeria, with a player opining, “These offers are more competitive compared to the prevailing offers from Mid-Eastern and African sources this week.”

Although PP and PE demand is not that encouraging in Africa these days and buyers hope to achieve some discounts depending on product, expectations center on an improvement in activities ahead of Ramadan.
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