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Africa LDPE imports expensive despite 15% price drop - suppliers
2010-09-08 17:08:27

LONDON (ICIS)--Low density polyethylene (LDPE) film is still too expensive for the African markets despite a price drop of up to 15% this year from January to December, producers and distributors said on Thursday.

Converter usage of LDPE in Africa declined as prices climbed in the first half of the year, and this has not yet picked up despite prices falling in the second half, sources said.

LDPE import spot prices were at $1,450-1,550/tonne on 7 December, down from $1,700-1,730/tonne (€1,275-1,298/tonne) in the first week of January. The price gap between LDPE and other film grades remains wide, as highlighted in the graph below.

Buyers deem the grade too expensive compared to linear low density polyethylene (LLDPE) and high density polyethylene (HDPE) film grades.

“Even from the Middle East, there is a big differential in prices between LDPE and HDPE,” a distributor said.

"Customers in West Africa have shifted to using LLDPE instead of LDPE to make water pouches, especially in Nigeria", a second distributor said, explaining that water pouches had been a major end-use of LDPE until recently.

A PE producer said: “If you look at the price, the gap between LD and LL in Middle East and Africa is high compared to other regions.”

Prices need to come down a bit further if converters are to be enticed into buying the material, said the producer.

This has led the company to reduce its December LDPE offers into Africa, although it announced a rollover for all other polyethylene (PE) grades, the source said.

Other producers also remain flexible on LDPE offers, citing the slow demand and consequent increased global availability.

“LDPE is hard to say, the weakness persists, it will be sometime before we come out of the woods,” a second PE producer said.

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