African PE prices stable as sources await September direction

LONDON (ICIS)–Polyethylene (PE) prices in Africa are stable, following a modest upturn in pricing earlier this month, sources said on Tuesday.

“Demand has been slow, but August business is now done, and we have closed our books,” said a producer.

Most PE prices have increased by $10-20/tonne in August, but demand has been affected by holidays.

“We expect good volumes in September,” said the producer. “It’s a big month, and buyers will be back after holidays to prepare for end-year orders.”

However, low crude oil and naphtha prices could exert some downward pressure on these markets, according to some sources.

Naphtha was trading at $836-838/tonne CIF (cost insurance freight) NWE (northwest Europe) on Tuesday morning, down from as high as $976/tonne during the week ending 20 June.

Lower crude and naphtha prices have weighed on sentiment in Asia, and PE prices there have been mixed, but with some lower levels noted on bearish sentiment.

Sentiment in Asia could also affect Africa.

“September will be a struggle between strong demand and lower upstream prices,” said one source.

PE prices are trading in a range of $1,600-1,700/tonne CFR (cost and freight) for the most part, depending on grade and location.