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October expectations revealed in Africa’s PP, PE markets

  • 21/09/2017 (04:10)
In Africa, October expectations in the polyolefin markets have started to surface on a steady to firmer note in the light of the global upturn and firmer upstream markets, regardless of the stagnancy in demand.

This was mostly the case in September since PP and PE players received offers from overseas and regional suppliers with rollovers to increases of up to $60-70/ton despite poor demand. Although initial offers were trimmed down in some countries later in the month due to unsupportive demand amid parity fluctuations and economical unease, some players had to pay September hikes due to the sellers’ firm stance.

In Tunisia, players reported concluding €30/ton lower deals for both PP and PE compared to the initial September offers from the Saudi major due to sluggish demand. A source remarked, “Supplies are sufficient while overall market activities are slow. Suppliers were open to negotiations as their sales have dropped compared to the previous month. Regarding October, the sentiment appears to be firm. However, lethargic demand might continue to put pressure on prices.”

In Nigeria, after applying $22-33/ton increases on PP prices early this month, ELEME kept its mid-month offers unchanged, although market expectations were calling for increases due to the lack of imports. A distributor in Lagos commented, “Players keep a close eye on ELEME’s October announcements, which are still expected higher, as most of the Middle Eastern offers disappeared from the market.”

In Kenya, a converter said, “Demand for PP is better than PE due to the ban on plastic bags.” A distributor offering on behalf of the Middle Eastern producers with hikes also confirmed limited demand especially for film grades due to the ban. However, he said, “Allocations are not ample this month. Prices are expected to post further hikes for October shipments in line with the global upturn.”

A distributor in Algeria also reported, “We expect prices to track a firmer trend amid higher monomer costs in the wake of Hurricane Harvey. Suppliers will raise their offers in sync with the global firming. Availability is not ample especially for PP cargoes, which is why some suppliers were firm on their offers and refused lower bids in spite of muted demand. As for end-demand, it is performing slowly amid economical challenges and political instability.”

Players are now waiting to see if sellers will be able to obtain their hike targets in October or if they will have to surrender to thin demand and step back from their hike targets as was the case in September. The degree of their sales pressure is likely to set the tone of the market, some argue.
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