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Sentiment cautiously improves in Turkey’s polyolefin markets

by Merve Madakbaşı -
  • 08/02/2019 (09:00)
More PP and PE players are now convinced that import prices have bottomed out. Prices have already given signals of a recovery amid better buying interest for certain products, although buyers are taking this recently improved sentiment with a pinch of salt given mild demand in their end markets.

Sellers seek rollovers to small hikes for PP

On the price front, PP copolymer pioneered increases starting from mid-January with manufacturers confirming gradual hikes offered by South Korean suppliers. Prices have risen by $20-40/ton from last week. A large trader also noted, “We received $10/ton higher prices from a Middle Eastern supplier.”

As for homo-PP, competitive offers forming the low ends faded now that more sellers have attempted for slight hikes, counting on expectations that China’s polyolefin markets may return from Lunar New Year holiday on a stronger note. “Slightly higher deals are more likely for PP fibre considering sufficient supplies and seasonally tepid demand for raffia,” concurred most players.

Supply constraints support PP fibre

Converters have preferred to keep low inventories since H2 2018, which makes it hard to tolerate any delays on deliveries of their previously secured cargos. PP fibre buyers returned to the market to replenish their stocks following Domotex Fair that took place in mid-January. “Some Middle Eastern suppliers are out of market due to a series of reasons including unplanned shutdowns, which also contributed to firmer scene,” opined a player.

Nonetheless, PP raffia prices remains under pressure from the low season for sacks and plentiful supply sources. “We received $10-20/ton higher Saudi and Indian offers, whereas we don’t need to rush to buy since our end business is not promising for the near-term,” a manufacturer highlighted.

Downward pressure from US PE offers fades as 2019 starts

Turkey’s PE market was exposed to an intense pressure from aggressive American PE offers, similar to other regions including Southeast Asia during the last months of 2018. This was in line with slowing demand from China amid a trade war with the US. Yet, after US producers eased their stock pressure, they adopted a firmer stance as January kicked in. Traders in Turkey reported steady increases on a weekly basis for this origin, supported by melting stocks on hand.

Restriction on use of plastic bags delays recovery in HDPE film prices

Following suit, the decreasing trend lost steam by late January with LDPE and LLDPE being the first products to stabilize before HDPE film. This was mainly because the reduced consumption of plastic bags weighed down more on HDPE film demand than the other two. Nonetheless, Middle Eastern suppliers unveiled rollovers for February and achieved them in done deals for moderate amounts.

HDPE pipe witnesses monthly hikes

The depreciation of the Turkish lira against the USD almost halted activities in the pipe market amid cancelled state projects. This caused prices to follow a relentless downtrend since March 2018. The news about an irrigation project that will be financed by World Bank has boosted inquiries for HDPE pipe (100) black in particular this week.

Buyers: Major hikes are unlikely on deals

Manufactures believe that prices will not post significant hikes over the short term, pointing to the nearing elections in late March. “Demand is likely to be limited to modest volumes until the second half of the year, which may keep any firming in check. We are planning to track the post-holiday scene in China,” they remarked.
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