Will Africa’s PP and PE markets extend gains into March?

In Africa, import polyolefins prices showed up for February mostly with new increases after the upturn kicked off last month following a bearish Q4 2024. Reduced supplies from the Middle East in the midst of the annual turnarounds season was the main culprit behind renewed price hikes, although price increases appear to have slowed down. Whether the same factor will continue to buoy the markets for a third month is yet to be seen given the ongoing demand lethargy as well as the new PP capacity addition in Nigeria.

Nigeria’s CIF prices up for 2nd month, markets hit a year-high

In Nigeria, February PP and PE offers from a major Saudi producer indicated increases of $10-30/ton for PP and $50-60/ton for PE on a monthly comparison following the increases of up to $80-110/ton seen in January.

Following the January and February hikes, ChemOrbis Price Index suggests the highest levels of the past one year for both PP and PE prices in Nigeria . However, players report that prices are negotiable as much lower deals were heard from Oman but not confirmed from primary sources.

ELEME defies bulls for a 2nd month, sustains price drops for 5th month

Meanwhile, the country’s local producer, ELEME, bucked the bullish track for the second straight month and revealed price decreases of NGN50,000-52,400/ton ($33-35/ton) for PP and NGN50,000-50,500/ton ($33/ton) decreases for PE when compared to January levels. According to ChemOrbis Price Index, the producer has been announcing price decreases since October, marking the 5th monthly decrease. Even though the latest price cut was not as sharp as in January, ELEME appears to have remained indifferent to the uptrend that has been in place for the last two months in the import market.

All eyes on Dangote

Players are carefully watching the upcoming commercial production of Dangote Petrochemicals, which was initially scheduled to begin its PP production in October last year. However, the launch of its PP facilities was postponed to April-May this year.

Once fully operational, the refinery aims to produce approximately 900,000 tons of polypropylene annually, significantly cutting down Nigeria’s dependence on imported PP. The facility is anticipated to start production in phases, marking a major step toward self-sufficiency in polypropylene supply and providing prompt cargoes at relatively cheaper levels than imports.

Kenya sees highest import prices since June 2023

In East Africa, February PP and PE prices were announced with $30/ton increases from January. According to players, ongoing supply constraints continued to push prices higher in Kenya, although the absence of US offers caused much larger increases during the previous month particularly on the low ends.

Current import prices in Kenya stood at their highest levels since June2023, ChemOrbis Price Index reveals.

Tepid demand caps hikes targets in North Africa

In North Africa, February PP and PE prices were assessed mostly stable in Algeria and Tunisia, whereas slight increases were observed on CIF Casablanca offers. Generally, price hike targets were capped this month following the large increases issued particularly on the high ends last month. In Algeria and Tunisia, February PP and PE prices were assessed notionally unchanged following the $40-80/ton increases and rollovers issued respectively in January.

Meanwhile, players in Morocco received February PP and PE prices with €10-40/ton ($10-42/ton) increases from January. According to players, weak derivative markets continued to take center stage despite the recent bull trajectory. “Slight discounts were attainable for firm bids amidst muted demand,” a distributor remarked.

What’s in store for March amid looming Ramadan lull?

Players across the region continue to voice their concerns about the chronically weak derivative demand and diminishing hopes of notable demand improvements over the near-term given the approaching Ramadan lethargy by March. Nevertheless, the bullish sentiment in global markets amidst restrained supplies from the Middle East may provide a leverage to markets in March ; however, resistance is likely to grow more visibly, which is likely to stem price hike requests for a third month in a row.