16 October 2013 17:09 [Source: ICIS news]
While most agree demand for PE and PP is poor, the uncertainty regarding pricing stems from a variety of factors exerting different influences on the African market.
“There’s pressure downwards for Africa,” a Middle East producer said on Tuesday. ”But they’re [other producers] trying to keep up prices because of the weak [US] dollar situation. Demand is very poor. People [African buyers] are waiting for lower prices.”
European PE and PP prices have already softened following the settlement of the October propylene contract price at a €40/tonne ($54/tonne) decrease from September, and a €35/tonne decrease of the October ethylene CP.
A further decline of European PE and PP values is expected in November.
With the north African market in particular linked with the European one, the latter can influence the former.
“The general atmosphere in Europe is that prices will come down in November,” the source continued. “There’s a link with Africa.”
The producer spoke of a ‘wait and see’ mode: “[There should be] clearer views during the coming weeks. We don’t know what’s going to happen, it depends on propylene, naphtha [prices]...”
Meanwhile, a distributor in the West African market said higher prices in China are likely to have an impact on the African market: “Chinese prices are going up,” the source said. “I do think it may have an impact upward on [African] prices, especially those suppliers who sell to China as they make China prices a benchmark.”
($1 = €0.74)
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