Local LLDPE, LDPE prices rally in Egypt, players blame low import stocks08 Feb 2010 • by Natalie Aster
In Egypt, players complain about tight availability in the local LDPE film market, which caused prices to record significant increases of up to EGP1400/ton ($256/ton) since the beginning of January. This situation is mainly attributed to limited import availability from mainstream Middle Eastern producers.
The locally held LDPE film market had started the New Year with a firm trend in the country as most distributors elected to raise their offer levels in line with the higher import prices and tight availability. This tightness is attributed to the limited import purchases over the past months since regional producers’ supply levels were not satisfying. At the beginning of January, local LDPE was carrying $80-105/ton premium over imports while overall Middle Eastern offers were standing at $1350-1420/ton on CIF Alexandria, 90 days deferred payment basis from regional producers. Apart from the Middle Eastern producers’ offers, there were some South African as well as South and West European offers present in the import market. However, they were not reported long enough to ease the supply tensions.
The availability situation has gotten worse in the country since the beginning of January as locally held prices recorded EGP1250-1400/ton ($230-256/ton) increases up until now. Such increases continued to be fuelled by Middle Eastern producers’ higher announced import prices as well as their inadequate supply levels. Regional producers elected to issue up to $190/ton increases on their February LDPE film offers, bringing the overall import range to $1550-1580/ton on CIF/FCA, 90 days deferred payment basis.
A similar situation is also observed in the locally held LLDPE c4 film market, albeit in a less severe way when compared with LDPE film. Accordingly, LLDPE c4 film prices recorded EGP900-1000/ton ($165-183/ton) increases since the beginning of January due to restricted supplies from the Middle Eastern producers. Currently, local offers carry a $95-145/ton premium over imports. Regional producers’ current February offers are now $80-160/ton higher when compared with the beginning of January while some of these producers followed an unusual pricing policy during January and issued additional increases for that month, pointing to their supply issues. Now, players have started to report a slight relief regarding overall availability.
Considering this situation, most sellers feel anxious about availability and they are not rushing to sell their materials despite the not very encouraging demand. Those who are still offering prefer to pronounce high offer levels. Most buyers feel obligated to pay these high prices both in the local and import markets but they are not pleased with this situation and they are waiting to see different origins to emerge in the market. Many hope that the approaching Chinese New Year holiday, when China’s buying appetite will wind down, will result with more offers being diverted to Egypt at more competitive levels.
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