August Africa PP prices likely to roll over or increase slightly

17 July 2013 17:09  [Source: ICIS news]

LONDON (ICIS)--August prices for African polypropylene (PP) are likely to roll over or maybe increase slightly, market participants said on Wednesday.

August will be in the [price] range of July,” a homopolymer raffia producer said. “A rollover [is most likely], but some countries will increase by $10-20/tonne.”

The source added that customers are expecting this.

A block copolymer producer said: “I don't think there will be much [price] increase in August. A slight increase or a rollover, probably a rollover.”

The market is in a wait-and-see mode, watching as crude oil prices have been driven higher by political turmoil in Egypt.

While this will encourage producers to increase August prices, with demand muted – and on the back of both June and July PP price hikes – market fundamentals do not necessarily support a further increase.

According to a distributor, PP prices have already peaked.

“I agree that prices seem to have peaked,” the source said. “I expect a rollover or a slight increase of $10-30/tonne in products by the suppliers. This will be primarily to push buyers’ sentiments and coerce them into buying, but I doubt the increases will hold.”

“The producers are facing not only lower demand but also higher feedstock costs, and this will primarily be the reason why I doubt prices will be lower next week,” the distributor added.

The homopolymer raffia producer expects demand to pick up next month, supporting higher prices. “August [demand] will be better than July. Ramadan will finish, Eid [will finish], people will replenish [stocks],” the source said.

Producers are expected to begin announcing their August price offers next week.

By: Jo Pitches
+44 208 652 3214

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