Mid-Eastern PP and PE markets join rally in September
Saudi markets see first hikes since April
In Saudi Arabia, new September offers from a major domestic producer indicated SAR38-75/ton ($10-20/ton) increases for PE and SAR113/ton ($30/ton) increases for PP grades. Likewise, another domestic producer adopted a similar pricing policy for September, announcing SAR75/ton ($20/ton) increases for PE and SAR113-188/ton ($30-50/ton) increases for PP grades as compared to last month.
“Generally, these increases were largely in line with expectations, which had called for an improvement at a global scale following the energy rally. Several players suggested that the ongoing outages as well as planned plant shutdowns across the region may have also contributed to tighter supplies, which translated into higher pricing,” a local distributor opined.
Players reported improving demand in UAE
Middle Eastern producers had also opted for price hikes in the United Arab Emirates, with import prices rebounding from their lowest levels since September 2020. A major Saudi producer applied increases of $30-50/ton onPE and $50/ton increases on PP compared to August.
Also, offers from the country’s local PP producer, Borouge, were $50/ton higher from their latest August levels. According to market sources, demand has started to show some signs of improvement during September as the summer holidays have ended. “However, it’s not demand driving prices higher. Rather these price hikes have stemmed from the increasing cost and firming sentiment in other markets,” a distributor opined.
East Med markets bullish, Lebanese PP defied upturn
In East Mediterranean region, a major Saudi producer’s PP and PE offers to Jordan were announced with increases of $30/ton and $50/ton respectively from the previous month. “However, buyers are indifferent to the recent price hikes as end sales remain below average,” a market source commented.
On a related note, Lebanon is still struggling with a deep financial crisis, which has significantly affected purchasing activities. September PE offers emerged with $30/ton increases from August while PP offers were largely unchanged month-over-month. “Concerns about the value of the currency continue to alarm all players, keeping purchasing activities at basic needs, hence, discounts could be achieved for serious bids,” opined a trader.
Will further hikes follow in October?
Players across the region expect resin prices to remain on the firm side during October. Considering supply tightness and the ten-month highs in oil prices, feedstock costs are likely to retain their firm footing, lending additional cost support to polyolefin prices. On the other hand, concerns over sluggish end-user demand and economic struggles across the region keep any potential hikes in check.
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