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Mid-Eastern LDPE remains under upward pressure in Turkey

by ChemOrbis Editorial Team -
  • 13/04/2015 (17:38)
Import LDPE prices have been steadily rising in Turkey since early February. Even though import prices slightly softened in the middle of March based on ChemOrbis Price Index owing to slowing sentiment and fading buying interest, the upturn persisted for LDPE with support from ongoing tightness and rising costs.

Last week, LDPE film offers for Middle Eastern origins were reported at $1350-1390/ton on CIF, subject to 6.5% duty, cash in Turkey, indicating increases of $40-50/ton from a week before. Yet Middle Eastern LDPE prices remain under upward pressure in Turkey based on the netback to China.

Netback calculations based on China, where Middle Eastern LDPE film prices were offered at $1330-1410/ton CFR China, cash last week, reveal that LDPE film offers for Middle Eastern origins have some room to move higher in Turkey. Deducting a $20/ton freight rate to bring the material back to the Middle East and adding a freight rate of around $80/ton to Turkey, LDPE film prices can be theoretically offered at $1390-1470/ton on a CFR Turkey basis, indicating upward pressure on Middle Eastern offers to Turkey.

Moreover, LDPE film offers for Middle Eastern origins have been reported at $1400-1410/ton on CFR China, cash basis so far this week. If lower prices for Middle Eastern LDPE film do not show up in China for the remainder of this week, the low end of the theoretical levels of $1390/ton on CFR Turkey basis could even be unobtainable, some players argue.
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