| In Egypt, at the beginning of June, domestic PP producer EPPC had applied for protection fees to be implemented on import PP raffia materials entering the country, as per ChemOrbis. Upon their application, the Egyptian government accepted their request and issued protection fees of 15% (US$267/ton), whichever is higher, valid for 200 days from June 5 until December 22, 2012. As part of this agreement, EPPC is asked to provide enough homo-PP to meet the domestic market’s needs while they will have to keep their prices in line with monthly global price announcements. The agreement also requires a minimum monthly order amount of 50 tons from local buyers purchasing from EPPC. After the implementation of the protection fees, buyers were complaining about their deliveries from distributors, saying that they were not sufficient, although EPPC’s raffia deliveries were said to be adequate.As the protection fees have pushed players away from the import market, fewer and fewer import origins were seen in the local distribution market, as per ChemOrbis. This past week nearly all offers or deals for raffia grade reported by buyers was for Egyptian origin material. Players clearly prefer to turn to EPPC’s supply as imports will be subject to additional fees, while at the same time, EPPC had lowered their July prices by a significant amount of EGP710/ton (US$117/ton) and their offers are at competitive levels. There are even reports from a buyer that the producer cancelled their maintenance shutdown, which was previously scheduled for June 15, in order to cover the market’s needs as they promised. However, in the PP film market, there is a different story as the distribution market continues to be dominated by locally held Middle Eastern offers. Players report that EPPC’s film supplies are not enough to meet their needs.As a response to this issue, a source from EPPC had reported two weeks ago that they would start producing PP film very soon, although he did not specify a date. “We have not been producing PP film in large amounts due to weak demand for this product. However, we have started to see improved demand lately and therefore, we will start producing film grade very shortly,” he remarked. EPPC has a nameplate capacity of 400,000 tpa and they are capable of producing all PP products. However, the producer, who is said to be operating their plant at less than full capacity, is reported to be mainly focusing on their raffia production for now. A trader claimed that EPPC is set to start producing PP film on July 25. |
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