New PP offers in the Middle Eastern markets have rolled over or increased from last month amid planned and unplanned shutdowns after firming attempts showed up sporadically but somehow failed to prevail across the region in February. March offers to African PP markets are also stable to firm, first time after one year.
Firming trend extends into March in S.Arabia
A major Saudi producer increased PP offers to the local market by SAR37/ton ($10/ton) when compared to February levels, and a different local producer held offers unchanged for March.
The new offers echoed the view of the market players, who highlighted higher costs and the firming sentiment across the globe. Demand, meanwhile, is yet to show an uptick ahead of Ramadan.
Rollovers for 3rd straight month from Emirati producer
Emirati players received rollovers from a domestic producer for March for the third month in a row, while the major Saudi producer’s new PP offers have so far been announced with increases.
Despite improving to a certain degree, trading activities were still deemed below expectations in the UAE. Traders agreed that demand started to improve slightly and that further improvement was expected before Ramadan, when players usually begin securing stocks.
Shutdowns ongoing across Mid-East
The firming sentiment that has been in place since last month found support from the planned and unplanned production outages in the Middle East.
In February, Saudi Arabia’s Advanced Petrochemical Company shut one of its production lines at its PP plant in Al Jubail, Saudi Arabia due to unexpected technical issues. The line has come back online as recently as this week.
Saudi National Petrochemical Industrial Company’s (NATPET) fire-hit plant in Yanbu, Saudi Arabia is also expected to remain offline until later this year, further capping supply in the region.
In the UAE, Borouge, a joint venture between Abu Dhabi National Oil Company and Borealis, is also undertaking a turnaround at its petrochemical complex. The maintenance shutdown also affects its PP plants at the complex.
Nigeria’s ELEME raises PP first time after a year
Nigerian producer ELEME has announced its February offers to the local market with increases of NGN10,000-11,000/ton ($28-31/ton) for PP grades. According to ChemOrbis Price Index, this has been the first hike in PP since March 2018 after either rolling over or lowering its offers. The market sentiment in Nigeria was marred by a climate of political and economic instability related to the long-awaited presidential elections in the country.
Demand remains flat in Kenya
Meanwhile, and in Kenya, the overall price range for PP raffia and inj. from the two Saudi producers were more or less unchanged from February. Kenyan players reported slow market activities, with buyers restricting their purchases to needs-basis.
Although players expect a seasonal uptick in demand, there is still the question that whether the challenging economic environment in the continent will weigh against the expected recovery.