Mid-eastern producers to approach PP, PE markets with further hikes
Since OPEC’s consensus on an oil output cut, Nymex oil futures rose by around 18% which enabled Middle Eastern producers to start January with increases. According to Middle Eastern players, the regional producers will extend their firm stance to February for PP and PE amidst the strong upstream costs.
In line with these expected price hikes out of the Middle East, local producers in Turkey and Africa are also expected to stand firm on their offers due to the supply constraints from the Middle East. In Africa, regional players closed their January PE deals on a steady to softer note while they have started to voice their firmer anticipations for February amid the higher upstream costs and the Middle Eastern suppliers’ higher price announcements for February to the Asian markets.
In Egypt, a PE producer source reported, “Regarding February, we expect the uptrend to remain in place and new announcements to be revealed higher.”
Similarly, a buyer stated that supplies are not ample, although, they can meet their needs for now as demand is in balance with tight availability. “The firm stance is expected to persist during the upcoming month with higher costs of the import materials and fluctuating exchange rates,” added the buyer.
In Turkey, a converter reported, “A few Middle Eastern suppliers have already applied $30-40/ton increases on their February PE prices while others prefer to wait for February to reveal their new prices.”
A distributor commented, “Our expectations are firm for February on an increased number of inquires towards the end of the past week. We think that we may face some delivery delays next month due to a temporary output issue at a Saudi producer.”
In Lebanon, a manufacturer reported that a Saudi major adjusted their offers up twice for this month. The buyer stated, “We postponed our purchases due to high prices, counting on our existing stocks to meet production needs. However, we consider making some limited purchases as February expectations are calling for further hikes.”
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