Africa PE, PP markets await producer offers for May

23 April 2013 16:26  [Source: ICIS news]

LONDON (ICIS)--Participants in the African polyethylene (PE) and polypropylene (PP) markets are anxiously awaiting the announcement, likely this week, of producers’ price offers for May, sources said on Tuesday.

Although buyers expect softer prices on the back of lower feedstock costs and lacklustre demand, many producers are resisting the downward pressure in order to protect margins.

“Everyone is waiting, expecting decreases,” one producer said. “But I do not expect to decrease my prices. Producers are resisting price decreases. Some are trying to close deals before there’s any arguing about it.”

A second producer said: “Producers want to hold on to prices. We don’t want to show weakness in the market. If prices collapse, there's no end to it. People will not be able to produce at these [lower] numbers.”

While many buyers are said to be refraining from purchasing because of the expectation of prices softening in May, some producers question for long they will be able to wait.

“Everybody is holding back,” the second producer said. “But eventually they have to buy. We feel there has to be buying happening now. Customers have low inventories.”

However, a third producer is expecting to decrease its values slightly, but believes this will have little impact on margins.

“There’s a downturn of prices, but nothing dramatic,” the source said. “Just some decline. There’ll be no real margin impact. Customers do expect prices to go down, but they won't expect anything dramatic.”

By: Jo Pitches
+44 208 652 3214

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