Bullish wind dies down in Turkey’s PP, PE markets
In the PP market, import homo PP prices broke below the $1000/ton threshold CFR Turkey by mid-August before the sentiment shifted upwards by September. Many Middle Eastern suppliers as well as Indian, Uzbek, Egyptian and Iranian sellers either conducted scheduled turnarounds or elected to direct their cargos to other global markets citing unhealthy netbacks in Turkey which exacerbated the bullish trend.
Although hikes stumbled by end September given disappointing post-Eid demand, the upwards momentum was back in place since mid-October. According to ChemOrbis Price Index, import homo PP prices rose by around $20-30/ton during the last one month.
In the PE market, LDPE prices posted more rapid gains due to supply limitations on the part of the domestic producer, Petkim, and regular Middle Eastern PE suppliers. The weekly average LDPE film price was up by $30/ton since mid-October, according to ChemOrbis Price Index.
HDPE availability was considered tight as well over the past couple of months given a reduced number of suppliers distributing Uzbek cargos following a maintenance shutdown at South Korean Lotte Chemical’s joint venture petrochemical complex in Uzbekistan during the first half of October.
The absence of regular import sources resulted in diminishing prompt availability for both PP and PE, particularly for PP raffia and LDPE and HDPE grades. However, during this week, the locally-held PP and PE markets displayed a slight easing in tandem with slowing year-end activity.
“Most manufacturers already sourced their needs during the first two weeks of the month and went to the sidelines to wait for December price announcements. No further increases are likely next month now that Asian markets including China, SEA and India have seen some corrections recently. Plus, traditionally it will be a month of destocking on the part of sellers,” players stated.
“The record low Turkish Lira against the US dollar coupled with the approaching year end hamper demand in Turkey these days. The market cannot digest any more hikes in the last month of the year although prices in Turkey lack a premium over China. From now on, prices in China should get closer to Turkey,” buyers opined. A couple of buyers, meanwhile, hope to see corrections on prices depending on the upcoming trend in China.
A Middle Eastern producer also commented, “It will be hard for us to issue further increases considering fluctuating crude markets, lower monomer costs, slowing polyolefins markets in Asia and Europe as well as discouraging buying appetite in Turkey. Prices may rollover next month.”
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