Offers for Middle Eastern LDPE film grade at a premium in Egypt

06-Sep-10

Middle Eastern producers have approached the Egyptian market with their September offers, as per Chemorbis. Producers’ LDPE film offers indicate rollovers to increases from August levels- at a large premium when compared with the prices offered to China by Middle Eastern producers. A major regional producer, limited quotas, elected to renew LDPE film prices from August levels on CIF, 90 days deferred payment basis. Meanwhile, another regional producer, absent from the market during August, offers on FCA Suez, cash basis at a US$20/ton increase from July on cash basis. Current Middle Eastern LDPE prices in Egypt vs the previous week indicate increases of US$39-89/ton. Middle Eastern producers, who announced increases for September to China, have already started to wrap up their business for the month while they have been firm on their offer levels. Based on the overall Middle Eastern LDPE film prices in China, a theoretical price calculation shows that the regional producers’ offers in Egypt carry a US$90-130/ton premium over the offers to China. Meanwhile, in the local market, distributors’ LDPE film offers remained stable on week over week basis while buyers report comfortable supply levels amidst slow demand ahead of the approaching Ramadan holiday. Despite their prompt availability advantage, the locally held offer range does not show any premium over imports for the time being and the local market offers buyers an outlet away from tight and higher priced imports. Egyptian buyers mostly expect stable to soft offer levels in the local market pointing to their slowing end product businesses while they continue highlighting the large gap between the offers given to China and Egypt by the Middle Eastern producers. Therefore, many prefer to adopt a wait-and-see stance until after the Ramadan holiday which will be over at the end of this week.