Gap between China’s and Turkey’s homo PP markets widest of 3 months
Source: ChemOrbis Price Wizard
In early May, the gap had narrowed down to $15/ton as homo PP prices in Turkey saw large declines between March and May in tandem with the emergence of the competitively priced duty free Israeli and Egyptian origins and buyers’ reluctance to engage in new purchases amid their ongoing bearish expectations.
However, the sentiment in Turkey slightly improved towards the end of May with buyers starting to resume their activities gradually upon concerns about whether prices hit the bottom or not. June announcements came in line with the expectations, suggesting rollovers to modest hikes due to the supply limitations from the Middle East and Iran.
PP sellers had an upper hand to push their prices higher to Turkey for the past 4-5 weeks due to the limited prompt availability until this week, when the market was quiet ahead of the Eid holiday. On the contrary, in China, prices were under downward pressure stemming from sluggish demand amidst the low season and strict environmental inspections. Plus, the expected increase in supplies following the end of the maintenance season as well as softer futures also weighed down on China despite a few short-lived and unsustainable recoveries in the previous weeks. PP prices have followed a stable to softer trend recently in the country while the near term outlook appeared on the weaker side.
The divergent trends of the two countries have inevitably caused the gap between import prices to grow to be the widest of the last three months. Therefore, Turkish buyers are concerned over this growing premium over China and they expect to see stable prices and even discounts in the post-Eid period.
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