India’s Reliance eyes opportunities to sell PE in Africa

22 June 2017 11:38 Source:ICIS News

LONDON (ICIS)--Reliance is eyeing the African market once it starts up its polyethylene (PE) 950,000 tonne/year plant in Jamnagar, India, in July, according to a source at the Indian petrochemicals major this week.

With such a large production capacity, a sizeable portion will be exported – according to the source, between 30-40% of the total capacity is expected to be sold overseas.

“Africa is an attractive market, so is South Asia,” said the source.

Africa is currently holding at the higher end of global prices and often maintains stability, as players in the region prefer to sit on large stocks to insulate against sudden price changes.  

Sellers from the US are establishing routes into Africa in preparation for new PE production facilities later in the year.

However, the source at Reliance said the company is relaxed about the potential oversupply of PE.

“Their hinterland is slightly different, we are not worried. Let the markets decide,” said the source.

Oversupply is currently contributing to downward pressure in Africa, with relatively high PE prices attracting imports from around the world.

Despite weak sentiment, which has been pervasive in Africa for months, prices have not collapsed to the same extent as in Asia.

Reliance has no strict plans for exporting, according to the source, and remains flexible on destinations and would sell wherever provided the best returns.

The plant is part of its PE expansion project, which includes a 550,000 tonne/year swing linear low density (LLDPE)/high density PE (HDPE) plant and a 400,000 tonne/year low density PE (LDPE) unit, at the same location.

Polyethylene (PE) is the most widely used plastic in the world, primarily found in packaging including plastic bags, plastic films and geomembranes.

(Pictured: a petrochemicals complex in Jamnagar, India)

By Ben Lake