Price rally subsides in African PP, PE markets through October

Africa’s major regional polyolefin markets remained on the upswing during October, despite the below-average demand. This was largely in correspondence with the earlier gains in feedstock costs and firming trends in global markets. However, some regional markets have seen price hikes slowing down this month after having rebounded from three-year lows in September.

Saudi major issues small hikes in Nigeria

In Nigeria, the biggest polymer market in West Africa, a major Saudi addressed the market with minor increases of $20/ton for all PE and PP offers from September. “Sellers have initially attempted to issue larger hikes; however, buyers resisted their hikes attempts, and prices were revised,” a trader commented. This marked the third month of consecutive hikes with the pace of increases fading amidst disappointing demand.

ELEME’s PP, PE offers spike for 3rd month, hitting all-time highs

Nigeria’s local producer, ELEME, announced NGN70,000-95,000/ton ($91-124/ton) increases for PE and NGN85,000-100,800/ton ($112-133/ton) increases for PP as compared to latest September levels. According to data from ChemOrbis Price Index, ELEME’s PP prices have reached their highest since ChemOrbis started compiling data, following in the footsteps of PE.

ELEME had pioneered the price increases back in August, while the rest of the region was still under downward pressure. Unlike the rest of the region, which saw the lowest levels since 2020 throughout a downtrend between April and July, the producer’s list prices for PP and PE did not witness such a considerable loss.

Buying activities remain pressured in Kenya

In Kenya, October saw the second consecutive month of increases, largely following the global bull sentiment rather than a real improvement in demand. “New prices came in line with firming global trend; however, the stumbling demand has put a cap on the hikes amounts,” a trader said.

Generally, October PP and PE offers from a Saudi major indicated around $20-30/ton increases over the latest September levels.

PE price hikes are smaller than PP hikes in North Africa

In Algeria, North Africa’s largest oil and gas producer, players received October offers with $50/ton increases for PP and rollovers to $10/ton increases for PE when compared to initial September levels. Buyers preferred to remain on the sidelines as end business demand remains sluggish.

Likewise, October PP and PE offers in Morocco were announced with increases of €50/ton ($52/ton) and €10-20/ton ($11-21/ton) respectively as compared to September levels. A Casablanca-based distributor reported weak market movements amidst rising economic concerns.

Players in Tunisia received October offers from Saudi suppliers with €50/ton ($53/ton) increases for PP and €20-30/ton ($21-31/ton) increases for PE as compared to latest September levels. Generally, tightening global financial conditions and high inflation continue to constrain economic activity across the region.

Will polyolefin markets reverse direction in November?

Considering the weakening bullish factors amidst volatile energy markets, long supplies from major export outlets and chronically dull downstream demand, all call for steady to softer pricing during November. Nevertheless, players across the continent keep a close eye on the ongoing conflict in the Middle East and its effect on crude oil futures.