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Tight supply keeps expectations bullish in Turkey’s PVC market

by Merve Madakbaşı - mmadakbasi@chemorbis.com
  • 13/01/2023 (02:59)
Turkey’s PVC markets have been on a bullish note since prices bottomed out in late November. Prices have continued to witness hikes, driven by supply, heading into the second half of January, while early February projections hint at further gains so long as supply tightness continues to pervade the markets.

CIF Turkey – Import Prices– PVC K67

Import PVC offers surge by 28-30% in one-and-a-half month

The market came out of the trough in mid-Q4 last year following a 7-month bear run. Prices responded to supply cutbacks from Europe and the US, not to mention the spillover impact of a strong upturn in Asian PVC outlets, where notable hikes from a Taiwanese major and revived demand from India pushed prices north.

Import PVC K67 prices on a CIF Turkey basis have soared by $220-230/ton (28-30%) on a weekly average since then, the weekly average data from ChemOrbis suggested. In other words, the market has returned to the levels seen in August 2022. 

The upward momentum was also underpinned by demand, as the emergence of availability concerns spurred panic buying on the part of Turkish converters, particularly in late December and early January. This was mainly because several consumers had kept their purchases at a bare minimum during the bearish trend.

On the downstream front, meanwhile, manufacturers continued to report muted end demand both at home and in export markets.

Main culprit behind rapid hikes: Dwindling import supply

The new-year festivities, coupled with the impact of harsh weather on run rates in the US Gulf region, caused European and American PVC producers to reveal their fresh offers later than usual this month. Prices jumped by more than $100/ton on a monthly basis in most cases, while the scarcity of import offers continues to drive the market. 

Some European K67 cargos were traded higher at $1050-1060/ton CIF Turkey, no duty, while a producer sought larger hikes with prices at $1100/ton with the same terms, blaming its limited quotas.

Players commented, "Adding to the absence of regular suppliers has been the ongoing lack of Russian PVC since late summer last year. Indeed, India has been a more tempting market for Russians considering healthy demand and better netbacks as compared to Turkey."

PVC K70 loses premium over K67 as lethargic demand weighs

In the meantime, multiple players reported that the buying appetite for K70 grade has been disappointing amid subdued derivative markets and adequate stocks. European PVC K70 prices surfaced higher on the month at $1130-1150/ton CIF before some sellers trimmed their offers to $1100/ton to achieve deals shortly after.

“PVC K67 demand has been better than K70 as supply tightness came to the forefront. Lethargic appetite kept increases in check for the latter one,” said a distributor.

Players: Prices may extent gains into February

Early expectations have already been voiced in a bullish tone for next month since tight availability continues to take center stage and stymie the impact of slow derivative demand. Contributing to the strong expectations has been a lack of sufficient stocks at the domestic producer, Petkim. 

"Duty-free K67 prices may settle around $1100-1150/ton next month, so long as availability remains a concern. The market may start to feel the support of seasonal factors by late Q1, albeit cautiously amid the economic challenges and the bleak outlook stemming from the presidential election in June," a trader opined.
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