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Mid-Eastern producers cut PE prices in Egypt, raise Aug outlook

by ChemOrbis Editorial Team -
  • 16/07/2012 (04:13)
In Egypt, Middle Eastern producers had approached the PE market at the start of July with lower prices when compared to their last June offer levels. As the month of July proceeded, the producers issued further decreases on their offer levels unlike the pattern they followed in other global markets including Turkey and China. Despite the recent price cuts, Middle Eastern producers are already pronouncing firmer price ideas for August in the Egyptian market.

A major Saudi Arabian producer offered $70-120/ton decreases to Egypt for their initial July offers before conceding to further decreases. The supplier first revised down their prices by $30/ton for HDPE injection, HDPE film and LLDPE film and then they issued further decreases of $30-80/ton on their LDPE film, LLDPE film, HDPE film, injection and blow moulding offers as of last week.

Meanwhile, a Qatari producer approached the market with $100/ton decreases for LDPE film and $60/ton decreases for LLDPE film. On top these decreases, the seller was also willing to offer $30-50/ton extra discounts for purchases of around 200 tons. However, a week after their announcement, the producer reported selling out their LLDPE film quotas while having very limited LDPE film availability left and therefore, they raised their LDPE film offers by $40-60/ton and pronounced a $20/ton higher LLDPE film sell idea.

A third Middle Eastern producer had announced relatively smaller July decreases of $10-30/ton on their LLDPE film, HDPE film and blow moulding offers before revising them down by another $20-50/ton last week for HDPE and LLDPE film. A trader offering on behalf of the producer commented, “We adjusted down our prices given the weak sales performance as buyers still hesitate to make purchases beyond their urgent needs. However, given the firmer oil prices we are mulling over issuing $50-70/ton increases on our August prices.”

A plastic end product manufacturer, who concluded a deal at the lower revised prices remarked, “We have started to see some improvement on our end product demand and we believe that the market has been performing better when compared to the previous years. We are currently running our plant at full capacity and we are covered until the end of this month due to our purchases.”

Looking at other global markets, regular Middle Eastern suppliers disappeared from the Turkish PE market last week as they target higher offer levels based on higher energy markets. On a week over week basis, Middle Eastern HDPE film offers rose $10-95/ton, LDPE film offers moved up by $180-120/ton and LLDPE film offers gained $80/ton at the low end of the range in Turkey.

A similar situation was observed in China. Most sellers reported targeting higher offer levels on their late July and August prices given the firmer upstream costs.
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