22 November 2012 05:10 [Source: ICIS news]
SINGAPORE (ICIS)--Saudi Arabia’s National Industrialisation Co (TASNEE) is moving its polyethylene (PE) and polypropylene (PP) cargoes via land to ports in the neighbouring United Arab Emirates (UAE) for shipping, to avoid the existing port congestion in Saudi Arabia, a company source said on late on Wednesday.
“We have solved the ‘delay issues’ to our customers based in Asia, by this alternative route,” the source said.
Congestion at the Saudi Arabian ports that include Dammam, Jubail and Jeddah has persisted since August before the Eid al-Fitr festival.
“The congestion at the ports is still not improving and we will only see the situation get better next year,” the source said.
The lack of port facilities was the key reason that the congestion has not normalised, although the festival is over, market players said.
Typically, such port congestions will occur every year during the Eid al-Fitr and Eid al-Adha festivals when working hours are reduced to four to six hours per day, slowing down paperwork needed for cargoes to be dispatched, they added.
“Since our plants are still relatively small, we are able to bypass the congested ports here and transport our parcels by trucks to UAE and dispatch to sea,” the source from Tasnee said.
He added: “We can still bear the additional costs. So, most of our customers are receiving their orders on schedule.”
Land transport rates from Saudi Arabia to UAE are about $20/tonne (€16/tonne).
Meanwhile, Saudi Ethylene and Polyethylene Co (SEPC), which Tasnee has a 50.6% stake in, is running its 400,000 tonne/year low density PE (LDPE) unit and a 400,000 tonne/year high density PE (HDPE) plant in Al Jubail, Saudi Arabia at full rates.
The remaining stakes are owned by Sahara Olefins and LyondellBasell.
Saudi Polyolefins Co (SPC), the second joint venture between TASNEE and LyondellBasell, is also operating its 720,000 tonne/year PP unit at 100% capacity.
($1 = €0.78)
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