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Turkey’s PE markets mostly reach a plateau as July kicks off

by Merve Madakbaşı - mmadakbasi@chemorbis.com
  • 02/07/2021 (03:05)
The downtrend in the Turkish PE markets has slowed in recent weeks. Waning stock pressure on resin producers, a climbing upstream chain and a cautious bounce in China have lent support to sellers. Although July offers pointed to monthly drops in most cases, particularly for LDPE, this might be the last month of discounts.

Price ranges saw marginal changes for LLDPE, HDPE

New price levels have started to take shape now that most Middle Eastern PE producers have unveiled their import offers. Except for LDPE, for which the market broke below new thresholds in line with expectations, the market signaled a mostly stable trend.

Middle Eastern HDPE film and LLDPE C4 film offers were assessed as stable to $10/ton lower at $1260-1280/ton and $1210-1230/ton CIF Turkey, subject to 6.5% customs duty, cash, respectively. Although prices from most producers pointed to monthly drops, this has not led to much change in overall ranges from last week.

Some suppliers, whose offers stood at the low end of the market in June, have already opted to issue rollovers this month. "July might be the final month of declines. Some sellers even intend to lift their offers for certain grades citing a lack of stock pressure," noted players.

Import Prices– LDPE – HDPE – LLDPE – CIF Turkey

LDPE drops may also be coming to a halt

Middle Eastern import LDPE offers were assessed $40-50/ton lower at $1450-1480/ton CIF Turkey, subject to 6.5% customs duty, cash. Sources from regional suppliers affirmed, “We had to trim our initial LDPE offers further due to an ongoing resistance from customers.”

Players think that the LDPE market has neared the bottom, while justifying their point of view with visible hikes in China. LDPE has seen increases of up to $60/ton from last week after posting the sharpest drops among PE products over the last 3 months.

Saudi Arabian major intends to adopt firmer policy

At the time of publication, a Saudi Arabian major had yet to clarify their new offers to Turkey. "The supplier will probably roll over their HDPE film offers, while their LLDPE offers may face hikes due to limited stocks," claimed players. Indeed, this was in line with previous reports about the limited supply of LLDPE with additives.

Approaching holidays keep cautiousness in place

The combination of the lifting of virus-led curfews and a cautious rebound in Asian PE markets triggered by soaring upstream costs and pre-season buying created a relatively optimistic sentiment in Turkey. Apart from rising inquiries from Turkish buyers, higher offers in China and Southeast Asia influenced the sentiment. The recent gains in the region have come despite the ongoing woes over Covid.

According to the weekly average data from ChemOrbis Price Index, Turkey’s premium over China’s import market has narrowed to around $210/ton for LDPE, $110/ton for HDPE and $170/ton for LLDPE film. This also underpins projections that prices have reached a plateau and may only see small variations from now on.

Still, the trajectory will be influenced by how the buying appetite evolves in the coming weeks. Bearing in mind that Turkey is ready for a long holiday in late July, some players maintain their cautious stance.

"Sentiment has more or less stabilized. We do not expect further price cuts. Yet, the market is not as strong as PP, for which prices turned up a few weeks ago. The nearing Eid al-Adha holiday may be extended and curtail demand," argued a buyer.

Sellers, meanwhile, believe that rising crude oil, naphtha and ethylene prices across the board will help the Turkish market improve more, particularly if Asia maintains its firm trend.
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