Lack of feedstock shuts Egypt’s HDPE and PVC plants for 21 days

In Egypt, domestic HDPE producer SIDPEC and PVC producer EPC suspended their operations as of June 1 for 21 days, as per ChemOrbis. Production capacity at SIDPEC is 225,000 tpa, while EPC’s annual capacity is 88,000 tons. The shutdown stems from a lack of feedstock from SIDPEC’s ethane gas provider. Prior to the shutdown, PVC producer EPC issued increases on their June PVC k67-68 and k70 prices of EGP250/ton (US$35/ton). A source from the producer commented, “Our current stock levels are not sufficient. Therefore, we plan to deliver only to the local market and we won’t offer in the export market.” This past week, overall PVC demand was reported to be improving in the country. Although it was still below moderate levels, most players agreed that the PVC demand has been giving signs of improvements. Prior to EPC’s hike, a pipe converter commented, “Locally held offers recovered in line with firmer import market offers although the domestic producers’ prices were still more competitive than the locally held PVC prices as distributors’ offers were priced higher on the back of the firmer dollar parity.” According to this converter, who anticipates higher June prices, local producers supplied the market without any problems during May. Another converter highlighted expectation of an improvement on end product demand following the elections in the country which were completed during May 26-28. According to him, locally held US PVC cargoes remain limited in the market. Offers in the distribution market tracked a stable to EGP100/ton ($14/ton) firmer trend on a week over week basis. Meanwhile, import US PVC offers were stable to $30/ton firmer as last week closed. In the PE market, a source from the local producer SIDPEC commented, “Our ethane gas supplier’s availability will be very short and therefore, we will halt our operations. Until this past week, we were delivering to the market normally apart from HDPE blow moulding cargoes, for which we had tight supplies.” The producer had not revealed their new June prices by the time of publishing but the country had already started to receive Middle Eastern PE offers for June at mostly rolled over levels for HDPE. For June, unlike the previous months, Middle Eastern producers’ quotas were reported to be at normal levels. A film and injection manufacturer remarked, “Most PE products are still limited in the market and this situation continues to support prices despite slow demand. We received HDPE film cargoes from the local producer SIDPEC but had not received any for HDPE blow moulding.” According to ChemOrbis, another converter noted, “PE prices are on a firm note and sellers are also adamant regarding their offer levels given the current tightness for most PE products in the distribution market. However, we can obtain our needs from our supplier without struggling for the time being. Meanwhile, we have started to see some signs of improvements on our end demand.”