LONDON (ICIS)–African low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) prices have mostly increased this week but the hikes may be short lived on the back of decreasing values in Europe and China, sources said this week.
Feedback in the African high density polyethylene (HDPE) market was limited this week, but the material is expected to be under similar upwards pressure.
Bullish sentiment followed competitive pressure from other markets and this, combined with tight supply, has resulted in prices increasing following higher offers.
Despite successful hikes in March, confidence has diminished to some extent for the coming weeks.
A weak return from the Lunar New Year holiday period in China and falling prices in the European upstream settlements have undermined prior bullish sentiment, sources said.
Crude oil futures prices have also taken a hit from President Trump’s repeated threats to begin a trade war.
As a result, it could be difficult to maintain prices in the coming weeks.
LDPE prices increased more than other grades due to greater demand.
Middle Eastern players are currently the main source of supply to Africa, but there are multiple planned and unplanned shutdowns in the region.
Furthermore, more shutdowns are planned in the future, limiting supply and the main driver for price increases.
African players are likely to resist further price rises in the coming weeks.
One source said many buyers were stocking up last month in preparation for upcoming outages.
“They bought a huge amount last month,” said the source.