Domestic LLDPE, LDPE prices rally in Egypt as import stocks dwindle

08-Feb-10

Price of domestic LDPE film has spiked up to EGP1400/ton (US$256/ton) in Egypt since the beginning of January. This situation is mainly attributed to limited import availability from mainstream Middle Eastern producers as per Chemorbis. At the beginning of January, local LDPE was at a US$80-105/ton premium over imports while overall Middle Eastern offers were at US$1350-1420/ton on CIF Alexandria, 90 days deferred payment basis from regional producers. Besides offers from the Middle Eastern producers, few offers in the import market were heard from South Africa, South and West Europe. However, they were not reported long enough to ease the supply tensions. Middle Eastern producers have continued with higher import prices as well as their inadequate supply levels. Regional producers elected to issue up to US$190/ton increases on their February LDPE film offers, bringing the overall import range to US$1550-1580/ton on CIF/FCA, 90 days deferred payment basis. The domestic LLDPE c4 film market suffered a similar fate, albeit in a less severe way, recording EGP900-1000/ton (US$165-183/ton) increases since the beginning of January due to restricted supplies from the Middle Eastern producers. Currently, local offers carry a US$95-145/ton premium over imports. Regional producers’ current February offers are US$80-160/ton higher since 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. Most sellers feel anxious about availability and are not rushing to sell their materials despite dampening demand. Those who continue to offer, have quoted high offer levels. Though most buyers have been compelled to accept these high prices both in the local and import markets, they are not pleased with this situation await emergence of different origins 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.