Monsoon slows West Africa PE, PP business, June PE hikes expected

LONDON (ICIS)–Despite the monsoon season slowing polyethylene (PE) and polypropylene (PP) business in West Africa, some participants expect Middle East producers to target June price hikes on the back of limited supplies, sources said on Wednesday.

“Prices [from Middle East producers] are expected to be higher by $30-40/tonne, on the back of a tight Asian market,” a local producer said.

A Ghana-based distributor said: “I’ve heard for West Africa, the Middle East is moving up $40/tonne [for PE]. There’s a limited supply of PE. PE is limited across West Africa.”

The source added that homopolymer raffia prices are likely to remain stable.

However, a second distributor disagreed with the notion of PE price hikes for June.

“I’d be surprised if there was a $40/tonne increase. I was having a conversation with suppliers when you called; it’s a possible rollover. Prices in Asia [have] started to come down already, and in West Africa now I see the rainy season having an impact. In Nigeria, I cannot see an increase [will be possible].”

The Ghana-based source explained that the rainy season lasts from May until August, then business starts to improve from September.

“Demand is low now because of the cool weather outside,” the distributor said, adding that the main use for PE is for water sachets.

In poor weather conditions, people drink less water and hence demand for these sachets is lower.