30 October 2013 16:51 [Source: ICIS news]
LONDON (ICIS)--Producers of polyethylene (PE) for the African markets are starting to announce their November price offers, with at least two targeting price rollovers, they said this week.
This is despite market expectations of price decreases stemming from a slowdown in several regions.
“We announced a rollover from October,” a Middle East producer of LDPE and LLDPE said on Tuesday.
“From our side, Africa demand was quite good in October. Europe was weak. In general across Africa it [demand] was OK. We sold our allocated volumes to Africa.”
The producer added that stable prices would help to restore buyers’ confidence.
“The market was expecting a price drop, but rolling over [prices] will give them confidence,” the source said. “Customers should have the confidence to come back”.
Many African buyers have been holding back for several weeks on the expectation of prices softening.
“We kept prices steady,” a second producer said. “We had a lot of enquires at K [fair]. Buying has picked up. Buyers were holding back, now they have to buy. We’re now waiting for buyers’ reaction to November prices.”
However, distributors note some producers already dropping prices from October levels.
“In west Africa, business is decreasing, offers are dropping lower,” one distributor said. “They’re $40-50/tonne down from October. Demand is there, but it’s not big.”
The distributor is also expecting north African prices to soften: “There’s been a [price] rollover since June,” the source said.
“That was very unusual and unpredictable. It’s mainly due to the decrease of the [US] dollar versus the euro. Now those suppliers are trying for a rollover, but demand is still not good.”
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