Polyethylene Market Trends in Africa

The African polyethylene (PE) market displayed mixed trends across the region this week. While supply tightness of HDPE film was seen in some markets resulting in slight price increases, LLDPE prices declined in some markets as some Middle East suppliers were offloading inventories amidst sluggish demand and gradually reopening markets following the holiday period.

Market Overview

Demand remained subdued across most of the region, with a slow market activity in the wake of prolonged year end holidays. Despite this, signs of restocking were observed, particularly from customers who deferred their buying activity in December, hinting at potential buying activity from these customers later in the month. In contrast, customers who had made their year end purchases stayed out of the market resulting in weak demand from this section of buyers.

The market is still digesting Q4 dynamics, where steep import discounts from the US triggered significant restocking. Suppliers are attempting to stabilize prices, though the impact remains uneven due to ongoing flat demand projections for Q1 2025.

Regional Highlights

North Africa 

• HDPE prices edged up in North Africa, supported by increased inquiries.

• In Egypt, short-term demand remains bearish, weighed down by economic uncertainties and fiscal tightening measures aimed at reducing debt.

• Political stability remains a concern, with demonstrations in late December reflecting general discontent.

• The European Union granted Egypt a €1 billion loan under its Macro-financial Assistance program, aimed at ensuring macroeconomic stability and supporting ongoing reforms in line with the IMF program.

East and West Africa

• In East Africa, HDPE prices fell $30/tonne on the high end, as ample supply and muted demand gave buyers leverage.

• New policy from the Kenya govt on domestic taxes is having an impact on overall business confidence and importers  are adopting a cautious stance.

• West Africa saw an uptick in HDPE film deals, but overall market sentiment remained weak due to currency depreciation.

South Africa

• South Africa’s market showed slow activity as the year began, with demand yet to rebound.

• The South African rand’s depreciation against the US dollar in December has impacted import offers, with adjustments from local producers still awaited.

Supply and Trade Dynamics

• LLDPE supply is expected to tighten from the Middle East between January and May due to planned maintenance turnarounds.

• Restocking activity may increase as buyers who delayed purchases in December and early January re-enter the market later in the month.

• US offers are awaited following the resolution of a port dockworkers’ dispute, with lower freight rates potentially influencing import pricing.

Outlook

The African PE market is expected to remain under pressure in Q1, with demand staying flat. However, restocking trends from some customers could result in temporary increase in demand. Supply constraints from the Middle East may influence pricing dynamics in the coming months. Buyers across the region are likely to maintain a cautious approach, monitoring economic and fiscal developments closely.

General Disclaimer

The information provided in this report reflects the author's analysis and interpretation of market dynamics at the time of writing. It is intended solely for informational purposes. Readers are advised to exercise their own judgment and due diligence when using this information for commercial or other purposes. The author assumes no responsibility or liability for any outcomes arising from the use of this information. All decisions made based on this report are at the sole discretion of the user.