Sasol hikes Nov PE offers but imports set to fall in value

17 October 2012 17:21  [Source: ICIS news]

LONDON (ICIS)--South Africa's Sasol has increased its November polyethylene (PE) offers for domestic business but imports are expected to fall in value next month on international market dynamics, industry sources said on Wednesday.

Despite the potential competition from imports in November, Sasol's price increase is seen as workable because of the local producer's short lead time for delivery and a potential for a spike in demand next month due to the peak summer season, industry sources said.

Sasol's November low density polyethylene (LDPE) offers are at South African Rand (R) 12,450/tonne, up R1,000/tonne ($115/tonne) from R11,450/tonne in October.

The company's linear low density polyethylene (LLDPE) offers are at R13,450/tonne for August, up R800/tonne from R12,650/tonne in October for its medium-size customers.

The price drop is unconfirmed at the source, but widely confirmed by other market players in South Africa.

Meanwhile, there is downward pressure on PE import offers into South Africa, and this is expected to continue into November as a result of a bearish sentiment in the key Chinese market.

Current LDPE import offers at $1,490/tonne CFR (cost and freight) and LLDPE offers at $1,530/tonne CFR are deemed unworkable in the South African market, as South African buyers wait on the sidelines in the expectation of a price fall in line with the Chinese market.

Last week, LDPE film price fell by $30-45/tonne to $1,265-1,350/tonne CFR China, while LLDPE film fell by $5-15/tonne to $1,335-1,375/tonne CFR China.

Sasol and South African HDPE producer Safripol is estimated to hold 80% of the country's PE market share.

($1 = R8.73)

By: Cuckoo James
+44 (0) 208 652 3214

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