South Africa PE, PP markets continue to suffer poor business

26 March 2014 16:39 Source:ICIS News

LONDON (ICIS)--Polyethylene and polypropylene business remains very subdued in South Africa as the effects of high costs and poor demand continue to bite, sources said on Wednesday.

“I’ve seen more action in a cemetery!,” a PE distributor said. “It's so dead, it's quite worrying and depressing. We're all on tenterhooks waiting to see what happens.”

A PP distributor said: “It’s very quiet. We have sold nothing, [we’ve put] lots of offers out, but nothing has been confirmed.”

Explaining the reasons for poor demand, the PE distributor explained: “It’s consumer driven, we're under a lot of pressure, normal citizens. [There have been] electricity price hikes, house insurance [price hikes], petrol [price hikes], huge increases on petrol [prices]! Toll fees, interest rate hikes, the costs of living have increased massively.”

The source added that consumers are tightening their belts.

“If people don't buy, producers don't produce packaging,” the distributor said. “There’s a lack of liquidity, the banks are nervous. It's all adding up, people don't have money.”

Furthermore, April demand is expected to be even worse than March because of a number of public holidays and the Easter break.

“The market outlook referring to demand in Southern Africa is quite bleak at the moment,” the PP distributor concluded.

By Jo Pitches