In Egypt, Middle Eastern producers lifted up their October PP and PE prices in line with players’ expectations, as per the pricing service of ChemOrbis. Meanwhile, prior to these increases, a major Saudi Arabian producer had already lifted their new October PP and PE prices in their domestic market which was an indication that they were to come with higher prices to Egypt.
Prior to the Middle Eastern producers’ hike announcements to Egypt, which came at the last working day of last week, a major Saudi Arabian producer had already lifted up their domestic prices in their local market by SAR375/ton ($100/ton) for PP and SAR75-263/ton ($20-70/ton) for PE. A trader reporting these prices commented, “We believe that these hike amounts are too high to be accepted in the market and therefore, the producer might step back from their offer levels if they see resistance from players.”
Following this development, three Middle Eastern producers, including the regional producer mentioned above, approached the Egyptian market with increases of $90-110/ton for PP and $30-130/ton for PE for the month of October. The reason behind the larger increases seen on PP prices is down to the fact that the PP market has been suffering from limited availability issues since the local producer EPPC is under maintenance. Plus, the market had suspended their import activities since June due to the very high former protection fees which were eliminated as of September 12. Indeed, Egyptian players had feared that the Middle Eastern producers might take advantage of this situation and reveal higher increases on their PP prices.
A converter, who received higher October prices from the Middle Eastern producers told ChemOrbis, “These hike amounts are just too high to be accepted. It is understandable that they raised their prices in Saudi Arabia as it is the high season for some end products given the pilgrimage season, but here in Egypt, end product markets are not performing well and we cannot absorb such hikes.”
Another converter complained about the higher announcements and remarked that prices might witness some downward adjustments by around $20/ton in the days ahead.