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Middle Eastern PP, PE markets slide as demand disappoints in June

by Başak Ceylan - bceylan@chemorbis.com
  • 07/06/2022 (09:59)
The slump, which first started to take hold in the Middle Eastern polyolefin markets in May, has also been extended into June. The drops were largely due to the global weakening in demand, as well as ample supplies across the markets.

Saudi markets decline as expected in June

A major Saudi supplier’s new PE offers to their local market indicate drops of around SAR112-188/ton ($30-50/ton) as compared to last month. The major producer also cut PP prices by around SAR375/ton ($100/ton). New offers were mostly in with the market expectation, which had been shaped by weaker global sentiment.

New PP and PE offers from another local supplier also showed monthly drops of SAR112-300/ton ($30-80/ton) from May levels.

"Some local players were expecting even steeper drops, particularly for PP grades,” a trader said, also reporting steady, albeit modest market activities.

Emirati producer cuts local offers by $50-70/ton

Middle Eastern producers also announced lower offers in the United Arab Emirates. A major Saudi producer’s new offers were largely lower by $10-20/ton as compared to May levels while offers from two other suppliers suggested a similar pricing policy for June.

A local PP supplier also revealed their new PP offers with $50-70/ton decreases as compared to their May levels.

“We expect the major Saudi producer to revise their offers as they are still very high and not really compatible with the market’s current state,” a player said.

In another news, the ban on single-use plastic bags came into force as of June 1 in Abu Dhabi. According to sources, bags used by pharmacies for medicines, thin plastic bags used for for vegetables, meat, fish, chicken, grains and bread in supermarkets, and garbage bags and bin liners of different sizes and types were exempt from the ban. However, several local players noted that the new policy was not expected to affect the trading activity significantly over the near term.

Lower offers fail to spark interest among Lebanese buyers

In East Mediterranean market, a major Saudi supplier’s new PP offers to Jordan were down by as much as $200/ton as compared to the initial May levels. New prices for PE grades were also softer by $50/ton. Players noted that purchases remain tied to basic needs as unfavorable economic conditions continue to hinder trading activity.

Lebanon is still struggling with a deep financial crisis, which has significantly affected purchasing activities in the country. According to a recent survey, the Lebanese private sector economy deteriorated to the weakest extent in nearly six years in May.
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