21 August 2013 16:46 [Source: ICIS news]
LONDON (ICIS)--Prices and conditions in the African polyethylene (PE) and polypropylene (PP) markets remain stable as participants await the announcement of producers' September prices offers, participants said on Wednesday.
While clear price ideas have not yet been formed in many cases, it seems producers may try to increase September prices because of higher feedstock costs and increased prices in other regions.
“I will increase prices for September, a $40-50 increase,” a PP producer said. “Europe is booming. People are coming back, building stock.”
European PP prices have increased by a minimum of €50/tonne ($67/tonne) in August, following the settlement of the August monomer contract price at an increase of €50/tonne from July. European producers are confident of achieving further increases in September, as higher naphtha prices drive expectations of an increase in the August propylene contract price.
African market attention is also focused on increased feedstock prices, particularly crude oil.
Crude oil values have been driven higher during recent days because of fears that the violence between Islamists and the Egyptian government could spread to other countries in north Africa. There are concerns that access to the Suez Canal might be affected if the violence escalates further.
Furthermore, PE and PP producers expect demand to return following Muslim market participants' return to work after Ramadan and the Eid al-Fitr holiday.
However, other participants believe that African market conditions do not support a price hike.
A distributor in the west African market said: “It’s quite bland now. Demand is quite low in WAF [west Africa]. My gut feeling is that prices should not go up. Last Friday Chinese prices did show a decrease after a long time as well, so I think [prices have] peaked out.”
African polymer prices often track Chinese ones, albeit with a lag.
($1 = €0.75)
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