Tightness brings further price hikes in African PP, PE markets

In Africa, regional polyolefins markets kicked off 2021 on a firm footing as tightness continued to add pressure on prices. Overall demand in Africa started to pick up after the year-end holidays, but varied from region to region.

PPH deals done at increased levels in Kenyan markets

In East African polyolefins markets, HDPE film and LLDPE C4 film materials were offered at a modest increase of $20/ton over last month while LDPE film offers saw a larger monthly hike of around $160-170/ton.

A major Saudi supplier’s PPH inj. and raffia offers were also offered at an increase of $80/ton. However, done deals for Chinese materials were reported at a much higher level. A trader in Kenya cited severely restricted availability of Middle Eastern suppliers as to why deals were concluded at increased levels.

Demand ticks up as buyers start seeking cargoes

In Nigeria, the local producer ELEME increased their list prices for PPH raffia and inj. by NGN100,150/ton ($261/ton) over December while PE offers increased by around NGN81,300-104,900/ton ($212-274/ton) from last month. Players reported that the domestic producer was offering at limited quantities to the West African market as their production remained affected by feedstock supply issues.

Nigerian markets also witnessed monthly increases ranging from $270/ton to $380/ton for Saudi PP and PE materials. Reduced allocations from Saudi suppliers were cited among key factors driving the prices higher.

Demand, on the other hand, started to move upwards in Nigeria as more players started seeking cargoes amid tight supplies.

Saudi players leave little room for negotiations in Algeria

In Algeria, a reference market for North Africa, January HDPE film prices increased by around $30-60/ton while LDPE film and LLDPE C4 film prices saw larger hikes of as much as $150-200/ton. PPH raffia and inj. offers surged by around $190-220/ton while PPH film and fibre offers increased by $210-230/ton over the previous levels.

A major factor driving prices higher was tightness in supplies in Algeria. In terms of demand, the market moved in a steady rhythm while purchases remained limited to immediate needs. Although buyers started approaching the suppliers to negotiate the initial prices, large discounts were deemed unlikely amid a continued tightness in supplies.

Will expected US cargoes prove relief in South Africa?

South African markets also faced the pressure from limited availability. The pressure resulted in a $130-140/ton hike from December for LDPE film offers. Offers for Saudi HDPE film and LLDPE C4 film grades also increased by $20-30/ton and $50/ton respectively over December levels.

January allocations were limited in South Africa. Several Middle Eastern suppliers were also reported to have refrained from offering. However, a glimpse of relief emerged on expectations of seeing increased US cargoes in February.