PVC players on hold amid bearish Dec expectations in Turkey

Turkey’s PVC markets sustained their downtrend for the second successive week as a stiff resistance from buyers continued to take a center stage. Indeed, the downtrend gained momentum this week in the wake of aggressive corrections in American and Asian offers for later shipments.

Parity concerns, weak expectations kept PVC at a standstill

Sellers continued to yield to a lack of buying interest from Turkish consumers amid still-inflated resin prices, a bleak domestic economy and off-season.

The USD/lira parity breached the 10 mark on November 12 and has hovered above this threshold since then. The Turkish lira has tumbled by around 42.5% since the beginning of 2021. Players were on hold for the most part of this week ahead of the Central Bank’s meeting due November 18.



Large drop from a Taiwanese major to Asia fueled bearish projections

In Turkey, South Korean PVC K67 prices for December shipments were last reported at $2240/ton/above early in the week. Shortly after, prices below the $2100/ton mark emerged for January cargos. This was in tandem with a 3-digit decline from a Taiwanese major to Asia for next month. “We have received Korean K67 prices as low as $2050/ton,” confirmed a buyer.
The dutiable K67 range plunged $100-150/ton to be assessed at $1980-2100/ton CIF Turkey, with Ukrainian cargos at the high end and Americans on the low edge. Chinese K67 at $2130-2150/ton FCA started to fade toward mid-week.

US K67 offers have plunged to below $2000/ton CIF, subject to 6.5% customs and 32.93% AD duty. This lead to a sizable drop of $150/ton on the low end of the overall dutiable K67 range. US K67 had broken below the 2200/ton mark to hit $2130-2170/ton last week.

Turkey still trades above all other outlets

Players expect additional drops in December as they point to the still-overrated price levels in Turkey, low winter season and a year-end lull. “We have lost share in many export markets amid inflated prices in Turkey while container issues also curbed our business. The ongoing depreciation of the Turkish lira against its peers hit domestic business to a large extent, furthermore,” lamented a PVC converter.

According to the weekly average data from ChemOrbis Price Index, import K67 prices on CIF Turkey basis are currently carrying a premium of around $600-640/ton over China and SEA, while they trade $250/ton above India’s import market. The premium over Italy/Northwest Europe has narrowed to $190-280/ton as of mid-November due to opposite trends in Europe and Turkey, meanwhile.

In the meantime, some traders pointed to the fact that availability from Europe is likely to remain tight moving into the last month of 2021. This is based on better than expected demand and low stocks on the producers’ side across the region. “This may prevent larger drops to Turkey in the coming term once the market gets rid of its bubble,” a trader opined.