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European PVC finds relief in Turkey after 12 weeks of firming

  • 28/12/2016 (18:16)
In Turkey, import PVC prices for European origins were firming up since early October due to reduced allocations from the region during the last quarter of 2016. This caused European PVC prices in Turkey to move above the local European PVC market on dollar terms since mid-November.

“Turkey faced large allocation cuts from Europe during the last months. In general, the country’s imports posted a remarkable drop when you check ChemOrbis Import Statistics,” a seller said. According to the data, Turkey imported 531,000 tons of PVC in the first ten months of 2016, a 14% fall year-on-year. In January-October period, PVC imports from duty-free European countries, meanwhile, showed a drop of 12% when compared to the same period of last year.

The reduced allocations from Europe, accordingly, caused supply tightness and steadily pushed import PVC prices higher in Turkey in the past 12 weeks until recently.

Last week, however, Turkish players started to talk about a slight ease on PVC offers for some European cargos due to the quiet year-end demand. There is also market talk that a West European source has started to offer material to Turkey albeit for modest volumes. A manufacturer stated, “As far as we know, the producer faced long shipment delays and they were set to resume their offers these days.”



Source: ChemOrbis Price Wizard
Some traders also reported hearing relatively competitive offers this week, while the low end of the European k67 range eased down by $20/ton week over week. A converter who obtained a price on the low end of the overall range said, “Sellers are ready to come down by $10-20/ton from their initial offers in order to conclude deals.”

“This is due to poor activity as only a few days are left until the new-year. This seems like a correction on European prices rather than a softening,” a trader commented. The graph above prepared by ChemOrbis Price Wizard also shows the imbalance between European offers to Turkey and local prices in Italy. Although Turkey should traditionally stay below the local prices in Europe, this has not been the case for the past few months. The trader also drew attention to the increase expectations for January ethylene contracts. “This may keep the outlook firm for PVC in the region,” he added.

Earlier in December, PVC k67 prices saw the $1000/ton CIF threshold in the midst of tight supplies, which failed to be found workable, a trader reminded. Another trader stated, “Trading activities are sluggish. We don’t have any k67 on hand. For January, we don’t expect to a downturn except for small corrections depending on buying interest. Ethylene contracts are set for gains of around €30/ton, while crude oil prices remain strong and US PVC makers are also set for a firm start to 2017.”

A pipe maker opined, “European PVC prices are still high, while the market activity has halted during the last working week of the year.” A trader noted, “We did not realize a correction on PVC prices. Our US supplier plans to apply hikes next month while firm upstream costs holds PVC scene strong in Europe.”
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