Saudi and Emirati players: Are production cuts on the horizon?
A converter operating in Saudi Arabia reported receiving new PS offers from a major local producer with decreases from last month. The buyer received new prices at SAR4988/ton ($1330/ton) for GPPS and at SAR5288/ton ($1410/ton) for HIPS on an FD Jeddah, cash basis. “Buyers are still cautious when it comes to making fresh purchases, although we are starting to see relatively better end product demand,” he added.
Meanwhile, a trader operating in Saudi Arabia also reported receiving new September PP, PE and PS prices from the same producer. The trader commented, “Overall September prices are still considered high amidst globally weak demand. We continue to be cautious on our purchases as the market is not very stable after the recent recovery on crude oil prices. We mostly prefer to observe the market in order to get a clearer picture. Regarding availability, supply levels are comfortable from all producers. Nevertheless, we heard from the market that one Saudi producer might have a 45 day long maintenance shutdown. The start date has not been pronounced while we think that it might be after the Eid Holiday.”
The trader received LDPE film at SAR4538/ton ($1210/ton), LLDPE c4 film at SAR4463/ton ($1190/ton), LLDPE c4 injection at SAR4650/ton ($1240/ton), HDPE film at SAR4500/ton ($1200/ton), HDPE b/m at SAR4538/ton ($1210/ton), PP raffia and injection at SAR4125/ton ($1100/ton), PET bottle at SAR3748-3785/ton ($999-1009/ton), GPPS at SAR4988/ton ($1330/ton) and HIPS at SAR5288/ton ($1410/ton) on an FD Jeddah, cash basis.
A different trader in Saudi Arabia said, “Saudi Arabia sees softening prices and buyers have mostly suspended their purchases as they push for lower done deal levels.” The trader purchased PP raffia and injection from one of the local producers at SAR3900/ton ($1040/ton) on an ex-warehouse Saudi Arabia, cash basis.
In United Arab Emirates, a trader reported receiving new September HDPE film prices from a major Saudi producer at $1250/ton on a CIF Jebal Ali, United Arab Emirates, 90 days deferred payment basis. “Despite the September decreases, we still think that prices have room to come down as overall demand remains thin. However, buyers are now generally worried that suppliers might attempt to limit their production in order to prop up the market.”
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