September PP, PE offers from Middle East surface

26-Aug-10
The much awaited PP and PE offers from Middle Eastern suppliers, that are taken as a reference for future direction of the market trend, are slowly surfacing for September in China and Turkey at higher levels despite the shadow of falling crude oil prices. As per Chemorbis, despite the fact that crude oil plunged to US$71/bbl as of this week after hovering in the US$80-82/bbl spread in the early days of August, spot ethylene and propylene continue to firm up in Asia on the heels of restricted supplies. Yesterday, spot ethylene was even traded in four digit figures for the first time in three months. In China, a new Saudi Arabian producer has started to offer LLDPE c4 film for September with large increases of US$150-160/ton when compared to their latest August offers. The producer aims to remain firm, justifying the price hike by pointing to limited allocations. However, he complained of lack of deal conclusion as buyers are showing resistance to these high levels under the influence of lower crude oil values. Another producer from Saudi Arabia revealed September HDPE and LLDPE film prices for next month with US$80-90/ton increases over August. A source from the company commented that buyers are hesitant to conclude deals at the new levels. However, the producer opines that they can achieve sales to some trading companies who are bound to maintain their long term relationships with them. An LDPE producer from the Middle East maintains offers at the same levels this week after having announced increases of US$20/ton for September, even though market conditions are slowing. In the PP market, a global producer has started to offer Middle Eastern PP raffia to China this week. Blaming tight supplies caused by the regional shutdowns at PP plants, the producer implemented large hikes, lifting new offers by US$70/ton when compared to their previous offers. Parallel with these developments in China, buyers in Turkey have recently started to receive offers for PP and PE from the Middle East. Initial offers from the bonded warehouse of a regular Middle Eastern seller have emerged US$70-90/ton higher for HDPE film and US$50/ton for LLDPE film with respect to August done deals for the same origin. However, buyers receiving these initial offers commented that they found them too high to accept for now. A buyer also received an HDPE film offer for Middle East origin with an US$80-100/ton increase over August done deals. A LLDPE film offer for a different origin from the region indicates a US$50-70/ton increase over early last month. In the PP market, buyers are receiving new September offers from different Middle Eastern suppliers at least US$100/ton above the beginning of August. Suppliers have raised their offers to Turkey gradually throughout this month while there is stiff resistance to the new offer levels with buyers’ bids standing US$50/ton below the recent offers.
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