Middle Eastern players voice February expectations
In Jordan, a buyer commented, “Prices remain on a softening note as trading activities are still sluggish. Despite lower January prices, players keep pushing for even lower deal levels. Meanwhile, some regional producers have already sold out their limited cargoes at competitive levels. Yet, the market feels no supply issues at all since most converters, including ourselves, suffer from thin end product demand. We see no light at the end of the tunnel as our end product trade performs slowly. Therefore, we are not expecting any changes on the current bearish trend into February, either. ”
Another converter highlighted the state of political turmoil in the Middle East region and said, “Given the closed borders with Syria and Iraq, we continue to suffer from weak end demand. Around 20% of the plants in the country are shut due to this reason.”
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In Lebanon, players continue to highlight thin buying interest and comfortable supplies. A converter operating in the country said, “Overall supply levels are ample but demand, on the other hand, remains very thin. Although some market players have started to question if prices have reached the bottom or not, we are not expecting a quick recovery at least until after March since winter conditions will remain in place and will slow down business. Most converters have already halved the run rates at their plants, pointing to their poorly performing end product demand.”
Another converter in Lebanon also confirmed the further decrease expectations, underlining the fact that the trade has been limited since the year-end holidays.
In order to track weekly developments in the Middle East’s PE market, please see our bi-weekly Polymer Digest Middle East Weekly PE Analysis (For members only)
In Saudi Arabia, a trader said, “Overall demand remains sluggish as buyers refrain from making any purchases that go beyond their needs. One of the Saudi producers had shut their PP and PE plants by around mid- October for maintenance while another major local Saudi producer has been limiting their deliveries in order to prevent further decreases. However, overall demand is still slow and upstream costs are still weak. Therefore, we do not think there will be any change on the current bearish trend in February, either. Plus, the producer who was conducting a maintenance shutdown has already restarted their PE plant by mid-January and they are expected to resume their PP operations, soon, too.”
In upstream news, crude oil prices, which closed last Thursday below $30/bbl, went above this threshold during intraday trading on Friday. Some players think that the recent uptick on crude oil prices may spread the question of whether the bottom has been reached or not. However, others continue to highlight that supply and demand dynamics will continue to determine the direction of the polymer markets, especially in the absence of China during their New Year holiday in February.
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