03 December 2007 06:55 [Source: ICIS news]
By Prema Viswanathan
SINGAPORE (ICIS news)--Polyethylene (PE) and polypropylene (PP) markets were expected to remain bullish in the Middle East until the second quarter of 2008 on tight supply and improving market sentiment, following the 2.7% price surge last week, suppliers, traders and end-users said on Monday.
PP prices in the region rose by up to $40/tonne and PE by up to $30/tonne on Friday from a week ago, on the back of severe supply constraints and strengthening demand, they added.
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PE prices in the Gulf Cooperation Council (GCC) and East Mediterranean (East Med) regions rose to $1,430-1760/tonne CFR (cost and freight) across all grades on Friday from a week ago, while PP prices surged to $1,440-1,540/tonne CFR, according to global chemical market intelligence service ICIS pricing.
“Margins are under pressure, but we are able to absorb the price increases, as we don’t need to buy large volumes in December, due to the seasonal slowdown ahead of the year-end stocktaking,” said a Dubai-based polymer converter.
Supply was tight due to strong demand in
“Our PE and PP allocations from regional suppliers has been cut by 30-40%, as they are more interested in catering to the requirements of big markets like China and Turkey,” said a Middle Eastern trader.
A second trader said: “There is a flood of enquiries from converters who are worried they may not get enough cargoes to meet their needs in January, but we are unable to fulfil their requirements.”
Supply was likely to be further restricted in the coming weeks, due to the ongoing two-week long maintenance shutdown at Sharq’s 750,000 tonne/year linear low density PE (LLDPE) plant at Al-Jubail, and the impending turnarounds by Kuwait’s Petrochemical Industries Co and Oman Polyropylene, traders and end-users said.
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