Market and product

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.”