Congestion at Saudi Arabian port delays PE, PP for Africa

24 July 2013 17:07  [Source: ICIS news]

LONDON (ICIS)--Ongoing severe congestion at Jeddha port in Saudi Arabia is delaying shipments to African polyethylene (PE) and polyproylene (PP) markets, sources said on Wednesday.

Much of the PE and PP supply to Africa originates from the Middle East.

“There’s congestion at Saudi ports, delays,” a PP producer said. “It’s because of shorter working during Ramadan, a restriction on the driving time of trucks. Drivers are limited to only six to seven hours. There’s only one entrance to the port. It’s not well managed.”

According to news reports, there is a restriction on heavy trucks accessing Jeddah city during peak driving hours.

A distributor said: “The congestion started before Ramadan. The trucking ban caused port congestion. It’s really hot now. People don’t work full hours. It’s a combination of reasons.”

A homopolymer raffia producer said that a similar situation occurred after Eid last year. It took a month and a half to clear the backlog, the source said.

According to a second distributor, the current backlog is already significant. The full impact of this may be felt after Ramadan, when market activity picks up.

“Demand is subdued, but I believe the north African market has a lot of pent up demand and [has] been postponing the purchase due to Ramadan,” the source said. “Also, the fact remains that the orders placed in the end of May and early June for June shipments have not been effected from the Middle East. There is a huge backlog for shipments of old orders, so the market will be short on materials.”

The distributor added that some producers are considering a force majeure.

Furthermore, north African buyers in particular may have to look to Europe or the US for volumes.

“I believe [buyers] will have to come out and buy US/EU origin goods for prompt shipment,” the source added.

 


By: Jo Pitches
+44 208 652 3214



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