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Tight supply prompts steep PE hikes from Saudi major in global markets

  • 02/02/2018 (08:37)
Global PE markets continued to move north for February while a Saudi Arabian major pioneered steep increases in major markets. The producer pointed to its tight allocations while justifying its increase decisions across the board.

In China, the producer raised its prices by $120/ton for HDPE film, $80-90/ton for LDPE film, $60-70/ton for LLDPE film when compared to its last January offers. According to players, a relief in seller’s HDPE film supplies is unlikely any time soon since it continues to focus on HDPE pipe production. This was in line with widespread market comments in Turkey, arguing that Middle Eastern producers have directed their HDPE pipe cargos to China, where demand was vivid owing to the infrastructure renewal.

Turkish buyers, meanwhile, received hikes of $100/ton from the Saudi major for HDPE and LLDPE month over the month despite the previous expectations for $70/ton. A manufacturer stated, “We had no choice but to pay the full hike considering the shortage that has been valid for HDPE,” while another buyer reported that the seller does not have any prompt material in the south region at the present time. “That’s why their prices are even higher for deliveries to the west,” he added. Some players hope that the major will trim its hike target for LLDPE, if not for HDPE, in the latter part of February, in the meantime.

In the Middle East, the producer applied remarkable increases of up to $70/ton in its own domestic market. Players in United Arab Emirates also received import HDPE offers from the producer $80/ton higher and LLDPE offers $40/ton higher on the month.

Buyers in Jordan were also offered $50-90/ton higher import PE offers from the supplier, while the seller’s most recent requests represented $30-60/ton hikes in Lebanon. A converter in Jordan highlighted, “The producer’s increases came in line with our expectations. Supplies are tight particularly for HDPE grades, which is supporting the uptrend. Sellers are standing firm on their offers given their limited allocations. However, we are trying to obtain some discounts as demand remains sluggish and our end sales are not satisfactory.”

In Egypt, the major’s PE offers indicated increases of $50/ton for HDPE 100 pipe (black) and up to $170/ton for HDPE film, injection, b/m, LLDPE c4 film and LDPE film. A player who received fresh offers from the producer stated, “We were surprised by the sizeable hikes from the supplier although we were expecting to see some increases in line with higher costs and firming global trend. However, we think that we can achieve discounts in done deals as the producer is open to negotiation. We will wait to hear other Middle Eastern suppliers’ February announcements.”

Buyers in Kenya and Tanzania also received $130/ton increases for February HDPE film offers from the producer.
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