17 May 2013 17:20 [Source: ICIS news]
LONDON (ICIS)--African polyethylene (PE) prices have fallen by 3-8%, depending on grade and region, since mid-March, ICIS data showed on Friday.
This resulted from a combination of softer feedstock costs, lower PE prices in Asia and lacklustre demand in much of Africa.
In east Africa, HDPE film prices fell from an average of $1,600/tonne (€1,248/tonne) CFR (cost and freight) east Africa on 13 March, to $1,505/tonne CFR east Africa on 15 May.
On the same dates, LDPE film prices dropped from an average of $1,510/tonne to $1,455/tonne, and LLDPE film values from $1,520 to $1,450/tonne, all CFR east Africa.
In west Africa, HDPE film prices fell from an average of $1,595/tonne CFR west Africa on 13 March to $1,495/tonne on 15 May. On the same dates, LDPE film prices fell from an average of $1,565/tonne to $1,495/tonne, and LLDPE from $1,580/tonne to $1,495/tonne, all CFR west Africa.
In north Africa, HDPE film prices fell from an average of $1,575/tonne CFR north Africa on 13 March, to $1,500/tonne on 15 May. On the same dates LDPE film prices dropped from $1,565/tonne to $1,485/tonne, and LLDPE film from $1,600/tonne to $1,475/tonne, all CFR north Africa.
The market is now believed to have reached the bottom of the price cycle, and many producers are targeting June price rises because of low inventories throughout the chain and increased buying interest in parts of Africa.
“In general Africa is showing good demand, particularly north Africa,” a producer said on Tuesday. “Customers will start restocking in May and June. They need to impove their inventories.”
Having held back from purchasing from mid-March on the expectation of both April and May prices falling further, buyers’ stocks are low.
Now, with prices likely to rise soon, as is traditionally the case in the summer months, they are keen to purchase.
Furthermore, in Muslim countries participants are also keen to restock before Ramadan in July.
However, producers inventories are also limited, and many have sold out for May.
Several PE producers say they will target price rises of $20-40/tonne in June, justified by low inventory levels.
($1 = €0.78)
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