Views mixed on Africa PP March price expectations, market conditions

19 February 2014 17:50 Source:ICIS News

LONDON (ICIS)--Views are mixed on African polypropylene (PP) market conditions and March price expectations, according to sources this week.

The majority of participants talk of bearish sentiment as the key PP markets have weakened.

Three Middle East producers, an Asian producer and several distributors across Africa point to Chinese demand so far having failed to return following the Lunar New Year holiday.

An Asian PP producer said: “Everbody is looking for the Chinese market to open after the Lunar New Year [holiday], but the market is weak. More people [producers] are looking at Africa to sell.”

A distributor said: “The China market has become softer and domestic prices are coming off, demand has gone down and this is affecting the general [market] sentiment. Turkey is also struggling due to political and currency issues, and Europe is pretty flat. India is also not showing good import activity.”

The source added that, with many Middle East production issues having been resolved, African customers are already noticing an improvement in supply from earlier this month.

“This is affecting their perception of what to expect for March [pricing],” the distributor said.

A number of participants expect stable to softer African prices in March. However, one Middle East producer of homopolymer raffia disagreed with this view of the market.

This source argued that despite the China slowdown, African demand is still healthy and continuing to outweigh supply.

“People see China slowing down, they expect prices in our area to go down, but this is not true. If China [prices] goes up, it doesn't impact the Middle East.”

This producer is expecting March prices to roll over at worst, or increase slightly.

By Jo Pitches