Mid-Eastern PE to Turkey and Egypt lowered for August

28-Jul-10
Converters and traders in Egypt and Turkey’s PE markets have started to receive August offers from Middle Eastern suppliers this week, as per Chemorbis. Facing considerable downward pressure from Asian PE markets, the new offers for Middle Eastern HDPE and LLDPE were announced with decreases. Unsatisfactory demand stemming from buyers’ anticipations of further price declines in August was cited as the main factor behind producers’ price cuts. In Egypt, where Middle Eastern origins had been carrying a significant premium vs the lower July offers from Middle Eastern sellers to China, producers announced their August PE prices with additional decreases on top of this month’s total decreases of US$30-80/ton. According to buyers’ reports, import PE prices from the Middle East moved downward this week in line with market expectations, with a major producer from the region announcing initial August offers with price reductions of US$30/ton both for HDPE and LLDPE. Another regional supplier revealed August prices with larger decreases of US$70/ton for HDPE and US$80/ton for LLDPE from their July offer levels. Despite these decreases, buyers found the August price reductions unsatisfactory, with a couple of converters reporting that they are unwilling to engage in new purchases for now as they believe that further discounts will be available in the days ahead. PE offers given to Egypt from the Middle East are still carrying a significant premium when compared with the regional producers’ August PE offers to China, which also indicate decreases of US$30-60/ton from the July level. Taking producers' new PE offers to China as a reference, Middle Eastern producers’ August offers to Egypt carry a premium of US$110-200/ton for HDPE and US$130-200/ton for LLDPE given the fact that freight rates are similar to China and Egypt from the Middle East. Lower Middle Eastern offers were also reported in Turkey this week. Middle Eastern suppliers, who had reduced their July prices by US$40-50/ton for HDPE and US$10-20/ton for LLDPE at the start of last month, came with further discounts of US$10-20/ton for HDPE and US$40-120/ton for LLDPE for August. The greater decreases seen in Middle Eastern offers for LLDPE were in line with players’ expectations as theoretical calculations based on the prevailing offer levels for Middle Eastern LLDPE film in the Chinese market suggested that Middle Eastern producers still had room to come down on this product. A distributor who received lower August LLDPE offers this week said that they revised their local prices downward in accordance with the price reductions they received from Middle Eastern suppliers.
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