Players in Africa forecast a stronger outlook for May

Players have started to voice their May PP and PE price expectations in Africa on a firmer note, pointing to the ongoing supply issues in the region, according to ChemOrbis. Middle Eastern producers are still reported to provide in limited amounts. In North Africa, an Algerian converter highlighted that they have not received a sufficient number of offers from either their Saudi Arabian or European suppliers. “PE supplies are very limited both in Europe and the Middle East. Luckily for us, we had some stocks to work with and we were not greatly affected by this situation,” he further added. Apart from the supply issues, the buyer also highlighted the depreciation of the Algerian dinar against the US dollar, by around 10%, recently. “This situation creates liquidity issues in the market. However, despite the cash flow problems, we still anticipate stronger May prices given the restricted supplies from the main import suppliers,” he added. An Algerian trader, who complained about slow demand noted, “Prices are increasing despite the under performance of demand as buyers are acting reluctantly when it comes to making fresh purchases. However, despite the weak buying interest, May expectations are still firm in the market on the back of the firmer oil prices.” Meanwhile, a Moroccan converter, manufacturing film products, also confirmed receiving very few PE offers from a major Saudi Arabian producer. “The Saudi producer, given their limited supplies, could not deliver to all off their Moroccan customers. Apart from the Middle Eastern sources, European suppliers also spared very restricted amounts to Africa in April, mostly due to their production issues. When considering the tight supply situation coupled with firmer oil prices, we anticipate further hikes into May,” he remarked. Coming to East Africa, a Kenyan buyer said, “A major Saudi Arabian producer only delivered half of their usual quota amount this month. We do not think that the supply issues will be resolved easily. Therefore, we anticipate tightness to linger into May. Plus, it feels like the producers are trying to control the prices by limiting their supplies. If the current situation does not improve, the market may see further hikes of around $80-100/ton in May.” A different converter, operating in Kenya and manufacturing film products, also pronounced up to US$100/ton hike expectations for May from the Middle Eastern suppliers. “Tight supplies from the Saudi producers helped boost the buying interest in Kenya. We managed to secure some cargoes in April but our materials have not been delivered to us, yet. Plus, we were not informed about the reason behind this delay, either,” he cited. Meanwhile, in Nigeria, the local PP and PE producer ELEME, who had already issued their initial April prices with increases of NGN10000/ton ($50/ton) for PE and NGN16000/ton ($80/ton) for PP, adjusted up their offer levels again this past week by NGN10000-11000/ton ($50-55/ton) for PP and by NGN20000-21000/ton ($100-106/ton) for PE when compared to their initial April levels as per ChemOrbis pricing service.