Middle East suppliers have hiked regional polymer offers for February by US$130-250/ton vs January offers in line with high feedstock costs and tight supply, as per ICIS. These increased offers contradict market expectations of a price decline. Few buyers have already accepted the offers in anticipation of a further price correction as supply remains tight due to production issues in the region. In anticipation of a price dip, most buyers had maintained very low levels of inventory. Hence they are in a position with no room to bargain as they urgently require to replenish stocks.
LDPE offers have shown the sharpest increase, surging by US$250/ton in the Gulf Cooperation Council (GCC) and East Mediterranean (East Med) regions to US$1550-1600/tonne CFR. Offers for high density PE (HDPE) and linear low density PE (LLDPE) have risen by US$130/ton to US$1350/ton CFR GCC and US$1400-1420/ton CFR East Med. Offers for GPPS have surged by US$200/ton to US$1540-1560/ton CFR GCC/East Med and to US$1640-1670/ton CFR GCC/East Med for high impact PS (HIPS). Polypropylene (PP) offers have risen by up to US$130/ton to US$1300-1320/ton CFR GCC/East Med for homopolymer grades.
Feedstocks ethylene, propylene and styrene have been on an uptrend in recent weeks due to tight supply and firming crude and naphtha values. An outage in Saudi Arabia due to power supply issues and an upcoming two-month maintenance shutdown at Oman Polypropylene over February-March, have tightened polymer supply to exert upward pressure on PE, PP and PS prices in the Middle East. Rising prices in Asia and Europe were another factor prompting Middle East suppliers to hike offers. Customers said they were unsure of the price direction in the key China market post-Chinese New Year holidays in mid-February and did not want to risk being caught with hand-to-mouth inventories.
28-Jan-10 
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