21 April 2010 17:42 [Source: ICIS news]
LONDON (ICIS news)--Tight availability of certain grades and a slight recovery in demand pushed both polyethylene (PE) and polypropylene (PP) spot prices up by $10-50/tonne (€7-37/tonne) in several regions of Africa, industry players said on Wednesday.
The largest gains were seen across the copolymer PP market, where the limited supply, high cost of feedstock propylene and a number of shutdowns in Asia and the Middle East pushed prices up by $30-50/tonne.
The increase left values in northern and western Africa at $1,550-1,600/tonne and $1,530-1,580/tonne CFR (cost and freight) respectively, according to data from global chemical market intelligence service ICIS pricing.
Elsewhere, the African high density PE (HDPE) market was beginning to recover slowly after a spate of lower priced cargoes had dragged spot values down in recent weeks, sources said.
Increases of $20-40/tonne were registered as these lower offers disappeared, while high feedstock costs and improving demand in China bolstered producers’ arguments to hike values.
However, there was some concern in the market that the recent surge in PE and PP prices was not sustainable.
“After the financial crisis [of 2008], producers have learnt they can pull back operating rates to control offers on a global scale,” one trader observed. “Demand is still nowhere near [first and second quarter] 2008 levels, but PE and PP prices are getting close to historical highs and a further increase is expected in May and June.”
The source added: “At the end of June, most of the planned maintenances will be complete and the new capacities in the Middle East and Asia will be up and running. Polymers producers will probably provide more material so they can capitalise on higher prices and the market will be flooded again.”
($1 = €0.74)
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