South Africa PE market worse than for last 5 years: trader

21 October 2013 11:08  [Source: ICIS news]

LONDON (ICIS)--A combination of problems means that the South African polyethylene market has faced its toughest year for five years, a trader said at the K2013 plastics fair in Dusseldorf on Saturday.

“2013 has been a little bit worse than during the last five years,” the source said.

“There’ve been worse problems than before. Everything [problems] has come at the same time [in 2013]. There’s been a 20% devalutation in the exchange rate [the South African rand versus the US dollar, which made importing volumes expensive], labour costs have gone up this year, fuel prices increased 30% this year...”

Furthermore, following problems faced by a local producer starting up after planned maintenance in September, certain grades of PE – particularly low density PE (LDPE) and high density PE (HDPE) – are very tight.

Other distributors and traders have recently complained that, while demand for PE has finally improved as expected during the high season, there is very little of these grades available to sell.

“Margins are under pressure,” the trader said on Saturday. “Some distributors have already left [the market].”

K2013 began on 16 October and runs until the 23rd.

By: Jo Pitches
+44 208 652 3214

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