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Saudi major adopts softer pricing for May in global PP, PE markets

by Başak Ceylan - bceylan@chemorbis.com
  • 10/05/2022 (02:46)
A major Saudi Arabian producer lowered PP and PE prices for African and the Middle Eastern markets, reversing a bullish trend that had been in place since the start of the year. The major producer’s offers in China were also lower in May, reflecting increasing concerns over the state of demand amid the ongoing lockdown in Shanghai.

Three-digit drops in PP offers in West Africa

The major producer’s new PP offers in Nigeria, West Africa’s regional powerhouse, slumped sharply by around $220/ton as compared to April levels while HDPE and LDPE film prices saw decreases ranging from $60/ton to $90/ton as compared to April levels.

May levels for LLDPE C4 film were stable to modestly lower by $20/ton, which indicated relatively tighter availability for this grade.

Despite the recent price cuts, reaction from buyers was limited in Nigeria. Throughout April, demand and activities were quiet in the regional market as players chose to remain on the sidelines, monitoring price fluctuations. Although traders are a little more optimistic for May, largely due to the high season for agricultural applications, a visible improvement in sales has yet to unfold. The approaching monsoon season also continues to weigh on outlook, supporting expectations of further drops.

Producer’s price cuts fail to spur demand in Lebanon

Saudi major’s LDPE film offers in Lebanon were $30-40/ton lower while HDPE and LLDPE C4 film offers saw larger drops of around $110-170/ton as compared to last month. New offers for PPH grades rolled over from April. However, this provided little relief for buyers who had for months been grappling with inflated prices in an unfavourable economic environment.

For the past two years, Lebanon has been gripped by a devastating economic and financial crisis, which was further exacerbated by Covid-19, and lastly, the war in Ukraine. Given Lebanon’s economic collapse, and the resulting inflation, most Lebanese players are likely to purchase hand-to-mouth in the near-term.

Modest decreases amid tightened supply in Jordan

The major producer’s May pricing in Jordan was $20/ton lower for PP grades and $30-40/ton for LLDPE C4 film and HDPE film grades. According to traders, Jordan markets started shaking off the Ramadan lull after a largely muted trading in April. "Demand has been showing some improvement after the Eid holiday,” a converter said, adding that supplies were somewhat restricted.

Producer cuts offers to China for first time in 3 months

After three months of stable to firmer pricing, the major Saudi producer’s offers to Chinese markets dropped by $10-50/ton for PE grades, and $60/ton for PPH raffia as compared to April. Players cited weakening demand amid China’s Covid-19 restrictions in the global trade hub of Shanghai. Reports of delayed shipments and concerns over further congestion at ports also weighed on the sentiment.
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