Opinions on possible impacts of Qatari crisis vary in Turkey’s PE market
Although no immediate impact of the Qatari tension was observed on the PE market, players started to evaluate the possible effects for the coming term amidst varying predictions.
A buyer, who expects a delay of two to three weeks for his previously purchased Qatari LDPE cargos, opined, “Qatar will most probably find new routes and continue to supply both Turkey and China via different ports. As they are not the only alternative for PE, we believe the market will not face any supply limitations or display an upwards momentum. As it arose at a time when supply is comfortable, except for LLDPE, the awaited delivery delays would not push the market up.”
A packaging converter similarly said, “We don’t expect the Qatari crisis to affect Turkey much so long as Iranian availability continues to feed the market. Plus, lower upstream chain does not support a reverse in the trend.”
On the other hand, some players admit that the expected delays in deliveries from Qatar may encourage other Middle Eastern PE suppliers to adopt a firmer stance on their pricing policies. “The LLDPE market already gave signals of a stabilization owing to lack of comfortable supplies. Some suppliers including Uzbek and Iranian sources trimmed their discount amounts this week for HDPE grades. Thereby, some firmer attempts may arise in the coming days for PE although we don’t believe they would work over the near term given falling costs, the Ramadan lull and a renewed softening in China’s PE market on poor demand and resuming PE capacities,” a player argued.
Muntajat informed its customers by the middle of the week that it is facing some logistics challenges due to the recent sanctions, whereas they were to continue to meet their customers’ requirements by re-routing their shipments through other ports.
“We have already taken measures to reroute our shipments and this may result in slightly longer transit times,” said the company, seeking its customers’ understanding and support in this exceptional period.
PE prices in Turkey retreated steadily during the last three months with prices sinking to 6 month lows for LDPE and LLDPE. HDPE, however, dipped to 17 month lows amidst ample supplies from Iranian sources, according to weekly average data from ChemOrbis Price Index.
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