Turkey PP market sees no respite from decreases as demand remains poor

Lackluster demand continued to weigh down on Turkey’s import and local markets during the first days of December. Prices have broken new thresholds as more sellers issued notable price cuts to cope with parity-hit demand. Import prices have retreated by 11% ($195/ton) for PP raffia and 6% ($115/ton) for PP fibre in a stretch of 4 weeks on average, as can be seen from the ChemOrbis Snapshot below.

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Prices turned south in early November as challenging economy, the arrival of some delayed cargos and muted export end markets all dimmed activity. Needless to say, overrated price levels caused a fatigue and mounting resistance on the side of Turkish manufacturers starting from early Q4.

Volatile parity kept purchasing sentiment weak

Players gathered at Plast Eurasia Istanbul starting from mid-week while most of them opined that overall demand remained tepid. “Deals have been a few and far between even at prices on the low end of the market,” affirmed most traders.

Several players attributed a lack of up-tick in demand to the ongoing economic woes. The Turkish Lira has depreciated by more than 60% against to the USD since the beginning of 2021. The parity has touched a new record of 13.80 on Wednesday which kept purchasing volumes tied to urgent needs. “The market have been facing cash constraints, while domestic manufacturers were hit hard by a historic low lira as they sell their goods on local currency,” a consumer noted.

Import offers were assessed with up to $70/ton drops on the week

Saudi Arabian raffia and fibre were assessed $50-70/ton lower respectively at $1550-1580/ton and $1650-1680/ton, all on CIF Turkey, subject to 6.5% customs duty, cash. A few raffia deals have been reported at $1550/ton, while bids now stand at $1500/ton.

Not many Chinese PPH offers have been reported recently, while a player reported PP raffia at $1530/ton CIF Turkey late this week. Turkey’s import PP raffia market carries a premium of $465/ton over the import levels in China, the weekly average data from ChemOrbis showed.

As a side note, the US decided to terminate proposed taxes on import Turkish products, including carpets. This news has generated some positivity and a slight up-tick in PP fibre inquiries. Still, purchases remained quite limited given low running rates on the side of carpet makers.

Locally-held market down for the 4th week in a row

The distribution channel also responded to the persistently slow demand and turned south in early November. Since then, the local PP raffia market lost $160/ton (7%), ChemOrbis data suggested.

The overall local PP raffia range was assessed down by $40-50/ton from last week at $2100-2150/ton ex-warehouse Turkey, inc VAT. A supplier said, “It has been hard to make any sales even at the low end of the market during the fair.”