Q1 turnarounds uplift Mid-East PP, PE markets in February; will it spill over to March?

In the Middle East, players reported restrained PP and PE supplies for February amidst the annual turnaround season in Q1. This has helped leverage polyolefin markets following a stable January and mostly bearish Q4. All eyes are now on March, with weak derivative markets and nearing Ramadan lull on one hand and ongoing and/or upcoming turnarounds on the other.

Saudi PP, PE move back up but only slightly

In Saudi Arabia , new February PE offers from a major domestic producer indicated slight SAR38/ton ($10/ton) increases from January. LLDPE was an exception as it rolled over. Likewise, the major’s PP offers were assessed SAR15/ton ($4/ton) up, following the SAR41-78/ton ($11-21/ton) price decreases announced during January.

These price increases – albeit in minimal amounts – have followed SAR41-78/ton ($11-21/ton) price decreases announced for PP and mostly rollovers for PE in January.

Saudi shutdowns underway and ahead

Apparently, this upward adjustment has found support from the ongoing shutdowns in the country as Tasnee’s SEPC and Saudi Kayan both had their HDPE plant turnarounds in the latter part of January to end around the first half of February. Yansab is also undergoing a turnaround at its HDPE and LLDPE plant in Al-Jubail for around two weeks. Moreover, Saudi Petro-Rabigh is planning to shut its cracker along with four PE units in April for three months. In PP news, both NATPET and Yansab have been undergoing maintenance shutdowns at their PP plants in Yanbu.

CIF UAE sees large hike requests after 3 months of stability

In the United Arab Emirates, Middle Eastern suppliers revealed their new February PP and PE offers with $40-60/ton and $30-70/ton respective increases when compared to the latest January levels. This upward movement came after 3 months of stability in UAE CIF prices.

Initial hike requests fail in UAE local market, eyes on upcoming turnaround at Borouge III

In the local market, PP offers were initially released with price increases of $30/ton, but they were later scaled back to rollovers as buyers resisted any increases in February after having already paid $30/ton increases last month.

In production news, Borouge’s No 3 cracker is having an unplanned maintenance shutdown in February, which is not directly confirmed by the producer. Meanwhile, the same cracker along with 3 PE plants and 2 PP plants under Borouge 3 project will be shut for scheduled maintenance in April, according to ChemOrbis Production News Pro.

East Med markets also bolstered

In the East Mediterranean region, a bullish sentiment also permeated the markets.

In Jordan, Middle East offers came with $60/ton increases for LDPE while LLDPE and HDPE saw a smaller increase of $10/ton on month. As for PP, players received PP offers $60/ton higher than last month.

In Lebanon, LDPE and LLDPE offers were reported $30/ton higher from the Middle East while HDPE was up by $10/ton. PP offers, meanwhile, were assessed stable from January.

“Polyolefin markets were up this month driven by supply constraints; nevertheless, economic and political headwinds continue to weigh on overall trading activities,” a local source opined.

Will Mid-Eastern markets maintain uptrend in March?

PP and PE markets in the Middle East may remain on firm footing next month given the spillover impact of Q1 maintenance shutdowns. On top of PP turnarounds in Saudi Arabia and the UAE, Kuwait’s PIC is also undergoing a maintenance shutdown this month. In the meantime, there are two big turnarounds in April for Saudi PetroRabigh and UAE’s Borouge.

These factors are helping to maintain a floor under the prices and bolster market sentiment. However, the reduced supplies are not anticipated to lead to substantial price increases given the Ramadan lull and overall weakness of demand.