Mid-Eastern PP, PE markets plunge in June, nearing 3-year lows

In the Middle Eastern polyolefin markets, offers for June have been announced with sharp price decreases as compared to May. PP and PE prices in the UAE, Lebanon and Jordan have seen their lowest since late 2020 amidst dampened demand. Meanwhile, most players see further demand weakness given the approaching Hajj season.

Saudi markets succumb to subdued demand

In Saudi Arabia, local polyolefin producers were pressured for further discounts through June based on a global weakness in PP and PE markets, as well as disappointing demand among domestic market players. A major local producer’s new offers came with decreases of SAR92-112/ton ($25-30/ton) for PP grades, and SAR187-300/ton ($50-80/ton) for PE grades from May. Offers from another local producer were announced with similar drops of SAR112/ton ($30/ton) for PP and rollovers to SAR375/ton ($100/ton) decreases for PE on a monthly basis, driving the overall price ranges to their lowest since 2023 kicked off.

Although local Saudi Arabian prices have not recorded major decreases like other Middle Eastern countries, it is important to note that average PP and PE prices have hovered slightly above and below the SAR4,000/ton ($1066/ton) threshold since late last year, which is also the lowest levels seen since December 2020, according to ChemOrbis Price Index.

“The new offers met our expectations amid persistently weak demand while trading activities are expected to retreat further as the Hajj season is around the corner,” a local trader remarked.

Slide deepens in Emirati markets

In the United Arab Emirates, Middle Eastern suppliers revealed their initial June offers with notable decreases when compared to the latest May levels. However, Emirati players obtained further price concessions with another round of price revisions issued amidst weak market sentiment. Generally, PP prices recorded decreases of more than $150/ton whereas PE offers were down by $120-200/ton when compared to initial May levels.

Also, the country’s local produce, Borouge, addressed the market with $60/ton decreases compared to May offers. Meanwhile, local sellers noted that the producer offered an additional $60/ton reductions.

According to ChemOrbis Price Index, both local and import PP and PE prices hit their lowest since November 2020 on average.

“Trading remains flat amid weak market sentiment as the downward trend is raising concerns across the market,” a local manufacturer commented.

East Med markets hit their more than 2 ½-year-lows amid competitive US offers

ChemOrbis Price Index also suggests the lowest levels since late 2020 in East Mediterranean markets. New June PP offers to Lebanon were down by $120-130/ton as compared to the initial May levels. Also, prices for PE grades recorded more than $200/ton decreases when compared to the latest May deals.

According to local sources, Middle Eastern sellers, especially PE grades, are negotiating their offers given the competitive US materials; however, the overall purchasing activity remains below average considering the current declines.

On a related note, initial May offers to Jordan surfaced with $100/ton decreases for PE and $110-120/ton drops for PP when compared to May; however, sellers stepped back from their initial offers and additional discounts of $40-100/ton were reported.

Is bottom nearing in Middle East?

Players across the region expect the bear run to remain in place until the end of the month, citing weak market sentiment amidst the global economic instability, not to mention the approaching Hajj season and Eid-Al Adha holidays. Meanwhile, expectations for July call for additional drops, albeit in more modest amounts compared to June. Sellers are relying on the possible rebound of oil prices following Saudi Arabia’s production cuts as well as speculations of a possible pick up in Asian demand.