Saudi port congestion sends African buyers elsewhere to seek PE, PP

31 July 2013 16:57  [Source: ICIS news]

UAE portLONDON (ICIS)--The severe congestion at Jeddha port in Saudi Arabia, resulting in delays of up to 2-3 months, is prompting African buyers of polyethylene (PE) and polypropylene (PP) to seek volumes from other regions, sources said this week.

“I'm trying to source from the US to cover congestion in Jeddha,” a distributor said on Tuesday. “I have an order from April that has not been shipped yet. Whatever you book now, if you're lucky it’ll go in September.”

Last week another distributor said: “The fact remains that the orders placed at the end of May, early June for June shipments have not been effected from the Middle East. There is a huge backlog (and some producers are considering a force majeure) for shipments of old orders, so the market will be short on materials. I believe they [buyers] will have to come out and buy US/EU origin goods for prompt shipment.”

According to a distributor this week, producers in other regions are taking advantage of this situation.

“May [orders have] not been shipped yet,” the source said. “If they [Saudi producers] do new business when will they ship them [the orders]? Customers understand that. That is why other regions are trying to push through price increases after they’ve closed business at an August rollover.”

The delays at Jeddha have been attributed to a variety of reasons, including reduced working hours during Ramadan, very hot weather conditions and a trucking ban. According to news reports, there is a restriction on heavy trucks accessing Jeddah city during peakdriving hours.

The impact of this congestion varies according to the supplier in question, with some producers able to ship from other ports.

By: Jo Pitches
+44 208 652 3214

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