Major producer leads way in higher April PP, PE pricing in Saudi Arabia
Triple-digit increases extend into April prices
A major producer announced April offers with increases as compared to March levels. The producer’s PE prices saw increases ranging from SAR375/ton ($100/ton) to SAR563/ton ($150/ton) while PP offers surged by SAR1013/ton ($270/ton) from last month.
This was in continuation of an uptrend that started in the middle of last year. The trend was largely as a result of an uptick in demand amid loosened lockdowns and tightening supply, reversing the weakness seen in the first couple of months of 2020.
Saudi polyolefin markets on uptrend since H2 2020
Local PP and PE markets have been rising since the second half of 2020 in Saudi Arabia, with a growing optimism regarding the prospects for the markets following the pandemic-led slumps. A global shortage of supplies that has become more prominent in the recent months added to the momentum, extending the price gains.
Q1 ends at multi-year highs in Saudi Arabia
Saudi Arabian PE markets surged triple-digits in March amid the bullish conditions stemming from the limited supply availability and increased feedstock costs. Sharp increases were also evident in PP prices in March, during which prices skyrocketed to more than a six-year high.
Supply tightness remains as major price driver
Although some players had been sceptical of the sustainability of additional triple-digit hikes, the major local producer’s new offers show that there might be room for further increases but not far above current levels. The supply tightness remains a major factor in pricing for April in Saudi Arabia. “We are closely watching the timing and the strength of production recovery domestically,” a player said.
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