Mid-Eastern producers reveal lower June prices to global PP markets

Middle Eastern producers have recently approached global PP markets including China, Southeast Asia, Turkey and Egypt with lower prices for June, listing lower propylene and naphtha costs across the globe, restricted overall demand and comfortable supplies as the reasons behind their pricing policy, as per per ChemOrbis. In China, this past week, more Middle Eastern producers showed up with new prices. A Middle Eastern producer had initially revealed June prices to China with US$10-20/ton decreases as compared to their most recent May offers, and later lowered prices by another US$50-60/ton to conclude deals. Meanwhile, another Middle Eastern producer issued a US$110/ton decrease on import PP prices while concluding a done deal ten dollars below initial price. A global producer lowering June prices by US$20 for Middle Eastern cargoes earlier, has this week expressed new sell ideas with further decreases of US$20-30/ton when compared with initial June price levels. Apart from lower production costs, lethargic demand from Chinese buyers also stands as an important pressure point in the country, causing distributors in China to re-export their Middle Eastern and Indian cargoes at their warehouses to Southeast Asia. More traders are exploring to re-export their existing materials to Southeast Asia these days amidst poor demand in China. Indeed, Southeast Asia’s import PP market is also seeing lower June prices from the Middle East as the market has been tracking a downward trend for some time in line with declining prices in the nearby Chinese market. A Middle Eastern producer announced additional decreases of US$20-30/ton after conceding to some price reductions on their initial June prices last week. Looking at Mediterranean markets including Egypt and Turkey, where Middle Eastern origins are considered to be the main supply sources, PP prices are being announced well below the May levels in line with the earlier expectations. In Egypt, a major Middle Eastern producer cut June PP prices by US$80/ton while another regional producer reduced their new prices by US$70-90/ton after having come with rollovers last week. In line with other markets, Middle Eastern PP prices to Turkey have also been emerging lower since the end of last week. When compared with the high end of the Middle Eastern PP range in May, new import offers from some mainstream Saudi Arabian suppliers so far indicate decreases of around US$20-95/ton while further drops are expected amidst sluggish demand in the country. Meanwhile, a Middle Eastern supply source reported offering their PP materials with significant discounts to Italy because they have high stocks which they want to sell out in order not to be caught amidst June decreases with high inventories.
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