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US PE offers remain discounted to Mid-Eastern materials in Africa, Mid-East

by Başak Ceylan - bceylan@chemorbis.com
by Esra Ersöz - eersoz@chemorbis.com
  • 21/04/2020 (09:18)
Import PE markets have been hovering around historical lows for the past few weeks across the Middle East and Africa. Pressured by the overall weakness in the global trend amid the ongoing COVID-19 crisis, offers for most PE grades have so far declined by 10% on average from a month earlier. Demand, which was already on a decline before COVID-19, has been another factor in multi-year low levels.

US PE offered 5% below Middle East PE in Egypt

In the midst of this bearish environment, US PE offers continued to provide a competitive edge in Egypt’s import market.

Last week, US offers were reported as low as $740/ton for LLDPE and at $840/ton for LDPE, both not subject to duty, while US HDPE film was offered at $740-760/ton CIF Egypt, subject to 5% customs duty. According to ChemOrbis Price Index, these levels represent the lowest since 2009.

As compared to Middle Eastern PE offers, US materials are currently offered at a discount of around 5% in Egypt.

Gap between US and Middle East offers widen in Lebanon

A similar picture was seen in the east Mediterranean markets. Lebanese players saw US material offered at a discount of $20-30/ton for LLDPE C4 film and $50-60/ton for LDPE and HDPE film when compared to Middle Eastern offers. With these prices, the gap between the US and the Middle East has noticeably widened in April.

US PE offers $60-70 lower than Middle East offers in South Africa

In South Africa, the US PE prices continued to offer a more competitive edge, even as the Middle Eastern producers opted to lower offers sharply from March. The latest offers reported in the region indicate that US HDPE, LDPE, and LLDPE C4 film offers are $60-70/ton lower from their Middle Eastern counterparts.

Africa and Middle East make up around 15% of overall US PE exports

According to ChemOrbis Statistics data, Americas had a 40% share in overall PE exports of the US in 2019. This was followed by Asia with around 25% share while it was around 20% to Europe. The remaining 15% share belonged to several African and Middle Eastern countries last year.

Africa’s PE imports from the US soar

Statistics reveal a visible jump in PE imports from the US on a country basis particularly across Africa. South Africa imported PE from the US %135 more while Nigeria increased its US imports by %176 year-over-year. Morocco and Tunisia almost quadrupled their PE imports from the US in 2019. Meanwhile, US PE imports rose by 97% in Algeria and by a relatively smaller portion of 42% in Egypt on a yearly basis.

US PE increases market share even in Middle East

The Middle East is the home to massive PE capacities, standing out as the world’s major exporter for this product. However, statistics also suggest considerable increases for PE imports from the US in this region too on a yearly basis, although the size is comparatively smaller than the other regions. The United Arab Emirates imported 65% more PE than the US in 2019 while Saudi Arabia’s imports from the US more than quadrupled in the same period, albeit in relatively smaller tonnages.

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