Northern Africa polymer prices continue to rise
Polymer prices in northern Africa are increasing as a result of rising values in Asia, the Middle East and Europe, market sources said on Thursday.
“Both polyethylene (PE) and polypropylene (PP) are being forced upward due to rising prices elsewhere. For example, the proposed 10% July increase on PE and PP in Europe will ultimately put upwards pressure on prices in the northwest [Morocco, Tunisia and Algeria],” one trading source said.
Sellers agreed, with one adding that “rising monomer costs and tight availability have also contributed to this push, and is unlikely to drop any time soon”.
Buyers, however, were unsure of the situation’s longevity. “We [buyers] are waiting for those new [PE and PP] capacities due on stream over the summer in the Arab Gulf, which will ease availability and bring prices down in northern Africa,” one said.
Buyers said that they were currently able to get hold of material, but, according to trading and selling sources, Egypt was extremely short on high density PE (HDPE).
“SIDPEC’s announcement that it will undergo maintenance from 15 July has triggered crazy pre-buying in preparation for Ramadan in August. Customers are trying to get as much HDPE now before availability becomes scarce,” a producer said.
“As a result, prices have gone up considerably, with even $1,400 [€1,008] to over $1,600 heard in some cases,” the source added.
Traders, on the other hand, agreed that the market was tight, but dismissed such high HDPE pricing. “$1,250/tonne is a more realistic figure,” some said.
In general, PE prices strengthened by $10-30/tonne this week. Low density PE (LDPE) prices were assessed at $1,200-1,220/tonne, linear low density PE (LLDPE) at $1,180-1,200/tonne, and HDPE at $1,170-1,200/tonne, all on a cost and freight (CFR) northern Africa basis.
PP rose by $40/tonne. Homopolymer PP was assessed at $1,130-1,150/tonne and copolymer at $1,160-1,180/tonne, both on a CFR northern Africa basis.
Local consumption was holding as the tourist season was well under way in Morocco, Tunisia and Egypt, but many sources thought it might dip in other countries as the summer continued.
“Demand will most likely weaken soon, but hopefully preparations for Ramadan will keep it stable,” a producer said.