Several factors slow east Africa PE,PP demand

LONDON (ICIS)–A number of factors have muted east African demand for polyethylene (PE) and polypropylene (PP) this month, market participants said this week.

These include holidays, end-users already holding sufficient stocks, and a severe drought this year in Uganda, one of the major east African markets.

“Unlike other years we had uncharacteristically low [demand this month],” a Kenya-based distributor said. “We had our country’s 50 year independence anniversary, and a subsequent long holiday weekend from the 12th December to 16th December.”

As with other markets, Christmas holidays are another factor.

“From the majority of customers I have spoken to, they intend to shut down operations from the 20th [December] and resume after the New Year,” the source added.

Poor December demand has been exacerbated by end users already holding high inventories.

A second distributor said: “In December, most of our end users from east Africa were carrying high inventories of raw material, especially of homopolymer raffia and PE’s.[polyethylene grades]. Enquiries are not coming from end users.”

In Uganda a severe drought this year has negatively impacted polymer business.

“Uganda, one of major markets in east Africa is going through a bad patch,” the second distributor continued. “The reason being a severe drought.”

The source added that the agricultural industry – vital to the country’s economy – is suffering.

“Converters of raffia bags are carrying very high inventory of raw material and finished product,” the distributor continued.”Collection is also a major issue.”