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Mid-Eastern PE producers aim for November hikes in Turkey

  • 28/10/2016 (13:20)
Turkey’s PE market is closing October on a firm trend due to supply constraints. LDPE and HDPE availability is considered tight in particular as several Middle Eastern suppliers preferred not to allocate much quantity to Turkey citing unfavorable netbacks. They have voiced their slightly firmer price goals for November recently.

A Saudi Arabian PE producer issued significant increases of $50/ton for their prompt LLDPE and HDPE materials available from a bonded-warehouse for November. “We expect to conclude deals close to our current price levels as we don’t have much quantity for Turkey. We already received a few orders for HDPE film at $20/ton below our initial offer. We don’t have HDPE blow moulding for now. We don’t expect to see or make drastic price changes over the near term,” a producer source stated.

As for the new pricing policy of a major Saudi Arabian producer, buyers expressed their predictions this week. A packager said, “The producer delayed its fresh offers for materials at bonded-warehouses to next week. We expect to receive around $20-30/ton increases from the supplier given the general constraints about PE availability. Apart from some scheduled shutdowns in the Middle East and reduced quotas to Turkey given low netbacks, we believe that traders are refraining from engaging in fresh imports unless they conclude deals with their customers, which keeps supply restricted.”

A global polyolefins producer reported keeping their Saudi Arabian LDPE film prices flat week over week for end October. A source from the seller noted, “Our PP sales are calm while LDPE is quite firm amidst better demand. We are on the top of the price range for the import market, but we don’t plan to step back as our allocation is already very limited.”

Sell ideas for other Middle Eastern origins surfaced with increases of $10-20/ton compared to last October levels. Most sellers justified their rising sell ideas to lower allocations for Turkey as they turned to other export markets to obtain better netbacks. A regional producer highlighted the large gap between import Middle Eastern prices in China and Turkey, particularly for LDPE, and emphasized the upwards pressure on Turkish markets.

On the other hand, the slightly softer PE trend in China this week combined with easing crude oil prices in the US and Europe in the last couple of days caused some Turkish players to question whether sellers could fully achieve their targets or not in the latter part of November.

“They will definitely try to lift the market considering lack of supplies from the Middle East. HDPE supplies from Uzbekistan are still not comfortable despite the restart at South Korea’s Lotte Chemical by mid-October. LDPE availability continues to be limited amidst reduced stocks at domestic producer, Petkim. Those factors are likely to keep sellers’ hand firm,” a manufacturer highlighted.
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