13 November 2013 17:24 [Source: ICIS news]
LONDON (ICIS)--The outlook for the African polypropylene market is unclear because of mixed signals, market participants said this week.
Some cite muted African demand, softer crude oil prices and a weaker US dollar when looking ahead to December pricing.
Others speak of restricted supplies and healthy demand in China likely driving up PP prices in other regions.
One Middle East producer spoke of African prices increasing in December, by $10-40/tonne (€7.40-30/tonne), because of strong demand and limited supply in China.
“[Africa] Prices will go up even though it’s a holiday [in December]. It’s supply driven. China is a dark horse.”
A distributor disagreed: “Demand is quite weak all across Africa. My gut feeling is that prices should reduce [in December].”
Others note the as yet unknown impact of the forthcoming increase in the European import duty.
From January 2014 the import duty for polymers from the GCC (Gulf Co-operation Council) area will be subject to a duty of 6.5% compared to the current level of 3%.
“I don’t agree that December prices will go up,” a Middle East producer said. “The European import duty is going up in January. We don't know how European producers will behave. If they increase [prices], it will help us. If they don't, we will go [sell PP] elsewhere.”
A second Middle East producer said: “The impact of the import duty increase in Europe is still not clear, and we need to wait and see how this impacts demand and trade flows.”
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