Fears over Suez Canal access spark early buying of Africa PE, PP

09 July 2013 11:37  [Source: ICIS news]

The Suez CanalLONDON (ICIS)--The political unrest in Egypt is sparking fears in the African polyethylene (PE) and polypropylene (PP) markets that the Suez Canal might close, market participants said this week.

This, as well as concerns over crude oil prices being driven higher still, is resulting in some PE and PP buyers purchasing now in case the situation worsens and polymer prices are driven higher in the coming weeks.

“People want to secure quantities now,” a PP producer said. “If the Suez channel closes, what will happen? No shipping line will deliver to north Africa. This will affect all the suppliers, we have to consider this.

"They [the Egyptians] say the channel won’t close, but why do they speak about it if there’s no risk of it closing? There would be problems delivering to north and east Africa and Europe.”

The unrest in Egypt is already causing logistical problems.

A PE/PP distributor spoke of congestion at Saudi Arabian ports: “In July there are big problems in Saudi ports, because of Egypt. They were [formerly] trucking through Egypt. Everything is now being shipped. Availability is normal, logistics is a problem. People are already trying to do August business, [they’re] trying to get ahead of the game.

“There was a Turkish shipment,” the producer added.  “A roll on/ roll off [vessel], [the material] goes by truck to Egypt, by ship to [Port] Mersa [Matruh], but this stopped because of the situation in Egypt. Customers using this [route] are impacted.”

By: Jo Pitches
+44 208 652 3214

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