PP, PE markets head for second month of firming in Mid-East, Africa
Although slight discounts were applied from the initial hike requests in the latter part of the month in some parts of the region including Egypt, Tunisia and Jordan, the trend was largely considered firm.
Low demand was cited as the main reason that buyers in these countries could obtain discounts from their suppliers’ initially higher offers. However, PP and PE prices remained steady throughout January in Algeria, Morocco, Kenya, Tanzania as well as Saudi Arabia and the UAE as sellers did not want to step back from their initially stable to firm offers despite unsatisfying demand.
As for February, players across the Middle East and Africa expect to receive new offers on a stable to firm note again, primarily due to the ongoing tightness on the side of Middle Eastern producers, promising polyolefin markets across the globe as well as strong crude and naphtha prices.
Borouge’s and Petro Rabigh’s PE plants will be shut for maintenance in February and March. Middle Eastern players have also been making good sales to China. Thereby, their allocations to Africa and the Middle East are expected to be limited, supporting them in their quest for hikes for a second month.
Demand is also expected to improve in sync with the firming trend as the global uptrend, bullish energy costs and limited supplies may overshadow the overall weakness of demand.
A trader in Tunisia said, “Demand is thin; however, restricted availability is supporting a firmer February outlook.”
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