Egypt’s local PP, PVC, PE producers lift Nov prices amid devaluated currency, disrupted import activities

In Egypt, the local producers of PP, PVC and PE have decided to raise their prices for November. The devaluated Egyptian pound against the American dollar and disrupted import activities were amongst the main reasons why the producers lifted their prices. As reported on www.ChemOrbis.com, the ongoing issues when trying to open letters of credit at banks and cash flow issues as well as heavier regulations at the customs, which causes the process of clearing import goods from the ports longer and more expensive, have been hindering the import trade for a while. This situation has resulted in tighter locally held supplies and pushed buyers to the domestic producers to meet their immediate needs. In the PP market, OPC raised their prices in the local market. According to a buyer who received offers from the producer, their new raffia prices indicate EGP650/ton ($81/ton) increases from late October levels. According to players, the local availability issues have started to ease a little bit for PP while demand remains slow. “However, supplies are still limited and that supports sellers,” a converter remarked. A trader commented, “Players are mostly sidelined from the import market in the face of firm EGP/USD exchange rates although they have recently started to stabilize. Meanwhile, local market levels are on the rise due to the tight availability but buyers mostly struggle with liquidity issues.” In the PVC market, the local producers EPC and TCI Sanmar issued increases of EGP300/ton (US$37/ton) and EGP350/ton (US$44/ton), respectively, on their k67-68 prices for the first half of November. A source from EPC highlighted that they lifted their prices because they have been seeing good demand and their supply levels have been dwindling. “Plus, our prices have been reasonable for the past month amidst disrupted import sales and the depreciating Egyptian pound. Given the ongoing difficulties in financing, buyers mostly turn to us to meet their needs,” he further added. A source from TCI Sanmar also commented on their increase decision and said, “The appreciation of the US dollar as well as the improved demand played a role in our increase. We hold comfortable stocks.” A trader complained, “Import purchases are very slow but local sales are performing better since most players turn to the local market to meet their needs. This situation pulls up the local market levels as sellers take their replenishments costs into consideration.” Following the PVC producers’ price hikes, the local market levels recorded up to EGP400/ton ($50/ton) increases during last week. In the PE market, the local HDPE producer SIDPEC raised their HDPE film prices by EGP900/ton ($112/ton) while they lifted their HDPE blow moulding and injection offers by EGP1100/ton (US$137/ton) as per ChemOrbis pricing service. A source from the company highlighted that their hike decision came in line with the import market levels for the month, which indicated rollovers to up to $30/ton increases. “We also felt obligated to lift up our prices in order to be able to cope with the depreciation of the Egyptian pound against the US dollar. Given tight supplies in the market, we believe that our prices will see acceptance,” he highlighted.