West African PE demand strengthened by ban postponement

27 November 2013 19:10  [Source: ICIS news]

LONDON (ICIS)--Demand in some parts of the western Africa polyethylene (PE) market is expected to increase following the postponement of a ban on plastic bags in the Ivory Coast, sources said on Wednesday.

The ban was expected to be announced by the government earlier this week, but it has now been pushed back until May 2014, market sources said. 

Demand had been weak for months in anticipation of the ban, but buyers are now expected to return to the market to increase stock levels.

“Demand was good following the postponement,” a distributor said.

“During the last two months they didn't sell anything, so some [buyers] are recovering stocks,” it added.  

However, in other parts of western Africa, demand has not been as healthy.

“[Demand] still lags behind expectation [of converters] and seasonal trend,” a local producer said.

“The coastal belt is yet to see continuous sunshine, which triggers demand due to heat,” it added.

In other parts of Africa, demand is stable and in line with expectations for this time of year.

Buyers are still restocking after Ramadan and delays due to port congestion in other regions reduced inventories.

Demand for high density polyethylene (HDPE) film may increase as the market shortens due to exports to Asia. Chinese demand is good, and the netback opportunities in Asia make it an attractive market for producers.

A distributor said there may also be some production shut down in December that could also tighten supply.

Participants in the African PE market are still waiting for producers' price indications for December business.

Some producers have issued prices for some regions, but price negotiations are expected to begin in earnest later this week or beginning of next.

Several players said they expect prices to be stable or firming slightly, but not decreasing.

By: Matt Tudball
+44 208 652 3214

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