Upward pressure in local and import markets in Egypt despite poor demand

11-Feb-10
Upward pressure prevails in the local and import markets in Egypt despite poor demand, as per Chemorbis. Most buyers prefer to defer fresh purchases, or meet their requirements in small volumes. This situation is seeing support from the impending Chinese New Year as players want to wait until the holiday period is over in order to be clear regarding the market direction. However, when looking at the current Asian prices in China, they indicate that the post-holiday offers are not likely to be any lower. In fact based on the theoretical calculations, they indicate a sharp increase. A Taiwanese producer’s offer is at US$1050/ton in China for late February shipment while the producer expects March offers to emerge following the holiday. According to him, prices for the upcoming month will be given at similar levels. Taking this price into account, a theoretical Asian PVC price to Egypt comes to US$1150/ton after deducting US$20/ton freight back to the originating country and adding US$120/ton freight to Egypt. This shows an increase of US$70/ton with respect to the most recent Asian offers reported in Egypt during last week at US$1080/ton. Meanwhile, American import offers rose by US$30/ton at the low end with respect to last week and rose to US$1030-1050/ton on CIF Egypt, 180 days deferred payment basis. Looking at the offers in local market, distributors and the local producer’s prices are in line with each other. However, they are under an upward pressure coming from the import market, currently pegged at US$1030-1050/ton, especially when considering the fact that they have the advantage of prompt availability. Plus, March is regarded as the start of the high season for PVC applications.
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