June PP, PE prices drop further on weakened activities in Egypt
May was a month marked with an increasing resistance among buyers. Faced with a diminished buying interest, suppliers had little option but to revise down their initial offers.
Although discounts took PP and PE offers away from the record-highs, activities showed only a marginal change. “Prices still have some room to come down,” a trader said late last month, saying that it could take a while for the stocks to be depleted amid weak demand.
Drops announced for PP but buyers bid even lower
Middle Eastern suppliers started revealing their June PP prices last week at lower levels as compared to the previously available levels in May. Players also saw the range widening, particularly for PPH raffia and inj. grades.
“There is resistance towards the mid to high ends of the ranges. Most buyers are seeking discounts or bidding at lower levels,” a trader said.
PE falls in triple-digits, wait-and-see mood persists
A major Saudi supplier initially surprised the market by announcing rollovers for June. However, downward revisions ranging from $350/ton to $400/ton soon emerged, bringing their levels more in line with the market’s expectations.
The latest PE offers from several Middle Eastern producers also matched the expectations. According to players, a major factor influencing the pricing this month was a persistent weakness in activities. Most buyers were reported to have been waiting at the sidelines, eyeing the market for any further price drop. “Most are unsure about what’s in store over the next few weeks. Demand has hardly changed from last month and buyers are reluctant to buy in bulk in case prices fall further,” a trader reported.
According to ChemOrbis Price Index, import HDPE, LDPE, and LLDPE C4 film prices have declined by around 15-20% since peaking to a record high in April this year.
Hefty drops from local PP, PE producers
The local producers also lowered their offers for June. ETHYDCO and SIDPEC–the two PE producers- announced triple-digit drops as compared to their previous levels in May. Weak demand and the global downtrend were among reasons cited for the sizable drops.
The two local PP producers, OPC and EPP, approached the market with similar drops. Despite the hefty price cuts, both producers said that they were focusing more on the export markets, where they reported better demand as compared to the domestic market.
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