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Turkey’s PE market remains supported by supply constraints

  • 07/10/2016 (03:34)
In Turkey, market players concurred that the PE market displayed a firmer picture compared to PP thanks to supply constraints for that product. Since availability concerns were reinforced due to scheduled turnarounds in Uzbekistan and Saudi Arabia, PE sellers found courage to issue slightly higher offers in the local market this week.

Availability at domestic producer, Petkim remained limited for certain LDPE grades while HDPE supplies were reduced amidst a shutdown in Uzbekistan. On the top of these, a PE manufacturer said, “We expect LLDPE availability to diminish as well over the next weeks as many traders were not able to purchase fresh cargos given unworkably high prices from Iranian producers during the recent weeks.”

In the import market, Middle Eastern PE suppliers, who had aimed for increases but failed to reach their sell ideas given disappointing post-holiday demand, obtained mostly rollovers or small hikes in a few cases depending on product. “A Saudi Arabian major reported limited prompt cargos left at some of its bonded-warehouses recently. Thus, the producer is not offering very actively nowadays,” noted a buyer.

A source at a Middle Eastern producer thinks that sellers may push for slightly firmer levels for LDPE film, while he is not sure about other grades. “Several regional sources had allocated fewer quantities to Turkey this month which kept LDPE firm. We expect to see mostly rollovers from now on given lack of supplies as the demand side is uncertain heading to the year end,” a producer source mentioned.

The overall local price ranges saw $10-20/ton gains for LDPE film, LLDPE c4 film and HDPE blow moulding from last week. HDPE film prices, meanwhile, were up $50/ton in the period. “We are not sure about whether the new high ends will prove sustainable or not next week. The market receives support from lack of supplies rather than healthy demand. The rising USD/TL parity kept purchasing volumes to a bare minimum, especially at manufacturers who do not rely on export business.

Players opine, “Demand is still not that brisk for PE, but we believe that lack of availability will counterbalance this situation. Although PP allocations from some Saudi Arabian sources are limited too, no major concerns are voiced, meanwhile.”

A trader commented, “Prices are firmer for HDPE grades and LDPE film. Demand for HDPE film and b/m is good on the back of tightness concerns based on the Uzbek shutdown. No major hikes are likely for the near term but we don’t expect any fall either at a time when crude oil prices are following a bullish trend.” A converter similarly noted, “Sellers are standing firm on their Uzbek offers due to the shutdown. We are planning to make some urgent purchases as b/m prices may post increases in the days ahead.”
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