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PP markets face less pressure than PE in Turkey, Europe and Africa

  • 17/11/2017 (04:04)
Players across Turkey, Africa and Europe widely concur that the PP market is relatively stronger than PE, although both markets have suffered from weakness for at least a month.

In Turkey, the sentiment for PP has recovered in the recent days albeit cautiously after sellers gave initial signals of a comparatively firmer stance late last week. “Sellers in the import and domestic markets were in panic to ease their stock pressure and aggressively conceded to lower prices earlier in November. Nevertheless, they are no longer willing to add to their losses and now seeking slightly firmer levels these days,” players stated.

However, the PE market has been mainly indifferent to the improvement in PP as converters are not rushing to buy more than what they basically need. Manufacturers stated, “We are still able to find competitive PE offers in the market, including for domestic cargos, as the year-end lull and the weak Turkish lira remain prominent. However, PP sellers are not calling as frequently as before as they don’t seem to have much stocks left.”

Traders affirmed, “We are more optimistic about PP for the coming term, whereas it will take a little longer to recover for PE considering discouraging end product markets.”

Likewise, Europe’s PE market has been weighed down by comfortable availability and restricted purchases on part of manufacturers who hold expectations for further discounts. Suppliers had to step back from their rollover requests for November immediately to speed up their slow sales as buyers refrain from building stocks ahead of December, a short month given holidays.

Regional buyers have achieved monthly decreases of up to €70/ton so far in the PE market.

However, relatively smaller decreases have materialized in the PP market across the region. Although sellers tried to remain adamant about their rollover requests, they had to step back. Yet, they agreed that the PP market is not as weak as the PE market.

A distributor in Germany commented, “The downward pressure on PP was not as visible as on PE, which resulted in smaller discounts for PP. As for December, we don’t expect to see major changes in PP prices, but particularly LDPE and LLDPE are likely to remain under pressure from comfortable supplies.”

In Africa, divergent pricing policies emerged for November PP offers with some overseas producers seeking rollovers to slight hikes for the product. Yet, price announcements for PE came mostly lower on the month since comfortable stocks and the year-end slowness were more dominant for this product.

Nigeria’s local producer, ELEME, had large stocks of PE in November, which forced them to apply rollovers while they applied increases on PP grades. In the import market, the weakness of the PE market was more obvious as Middle Eastern offers suggested monthly decreases of up to $70/ton.

A converter in Kenya, who received PE offers $40/ton lower and stable PP offers for November from a Saudi major, opined, “Supplies are ample while buyers are limiting their purchasing quantities in response to slow end business. We project a stable to soft over the short-term.”
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