19 June 2013 17:04 [Source: ICIS news]
LONDON (ICIS)--While demand for polyethylene (PE) and polypropylene (PP) is hampered by high prices and seasonal factors across Africa, the market in the east is particularly hard hit, with sales dropping since last month, sources said this week.
A PE/PP distributor said on Monday: “Compared to sales last month there is a drop of 30-35% this month overall, including PE and PP.”
A second distributor said on Wednesday: “East Africa [demand] is almost the same as May, but still a bit down over expectations, though.”
Demand in eastern Africa is traditionally slow in June and July.
“Winter starts here this month, so water and soft drink demand goes down drastically, and so consumption of PET, packaging films and shrink wraps [does] as well,” the first distributor explained.
Economic factors are also playing a part in hampering requirements for PE and PP.
The source added: “Actually the reason for it being slow in Kenya is their annual budget this month. Just to update you, in Kenya they imposed a 1.5% import duty on all polymers recently, which will be in place from 1 July. Before there was 0% duty on polymers.”
As with other regions of Africa – and other parts of the world – high prices are also thought to be deterring buyers.
“People are not buying because of pricing,” a Middle East trader said on Tuesday. “People think prices will fall in the next 15-20 days. China is not buying, India is not buying, Turkey is a problem. Everybody feels it [high prices].”
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