07 July 2010 13:05 [Source: ICIS news]
LONDON (ICIS news)--The African polymer market continues in its downward trend, with decreases of $10-100/tonne (€8-79/tonne) seen as a result of weak Chinese sentiment, pressure from cheap imports and lower offers for July business, sources said on Wednesday.
The largest falls were sustained in eastern Africa, where both polyethylene (PE) and polypropylene (PP) came under renewed pressure, mainly from lower July offers from the Middle East. Large volumes of cheap imports from Iran, India and other Asian countries, along with subdued buying interest, also hindered trade, according to sellers in the region, who said business was extremely slow.
One trader observed: “Offers are not translating into orders, despite the reductions, because demand is extremely dull. Much of the region is in its slower winter season and buyers are in wait-and-see mode.”
Low density PE (LDPE) saw the largest reduction, falling $80-100/tonne to $1,420-1,450/tonne CFR (cost and freight) eastern Africa according to ICIS pricing . Many traders said non-traditional Middle Eastern cargo was being offered from Shanghai-bonded warehouses close to $1,400/tonne CFR, but buying ideas were now below this level.
These below-market offers from unconventional sources had also forced eastern Africa homopolymer PP values down by $30/tonne according to several players, who agreed that prices were now pegged at $1,250-1,280/tonne CFR eastern Africa.
Meanwhile, linear low density PE (LLDPE) was under increasing pressure due to reductions of $30-40/tonne announced by Middle Eastern sellers for July business, which left prices at $1,280-1,300/tonne CFR eastern Africa.
In the wider African market, both PE and PP prices appeared to be stabilizing as values remained largely steady. This was particularly apparent in the high density PE (HDPE) market, where prices had fallen much faster than other grades, losing over 10% of their value from their highest point in May in the northern African market, to reach what many considered to be their bottom level.
However, others noted this steady trend did not signify the end of potential reductions in Africa.
A producer outlined: “The steady sentiment we are seeing now is due to lack of demand and nothing more. There is more pressure to come - if you look at the Asian prices and high inventories, it’s clear that further decreases will be possible [in Africa].”
($1 = €0.79)
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections