Turkey’s PP, PE markets hold firm despite record low TL
Despite the Central Bank’s interference on Tuesday, the USD/TL parity hit the highest levels of all time on Wednesday to surpass 3.94 after starting the year with rapid increases. Additionally, €/TL hit a historical high of above 4.10 the same day.
A Saudi Arabian supplier reported, “We sold out most of our limited January quotas while buying interest for our remaining materials at the bonded-warehouse is low as players are reluctant to build up stocks until they receive fresh end product orders. This may cause supply constraints in the coming term, as traders may avoid purchasing fresh cargos, particularly once Chinese players return from holidays in the latter part of next month.”
“Buyers keep their purchasing volumes to the bare minimum since a generally cautious mood set in given the record low Turkish lira against American dollar and euro. However, Middle Eastern and Iranian prices were up both for PP and PE and allocations from those regions remain moderate with netbacks in Turkey remaining unsatisfactory compared to China,” sellers noted.
Some players feel the recent situation will help Turkey to recreate a balance with China, where polyolefins prices were on a softening trend amidst slowing activity ahead of the New Year holidays that will be celebrated between end January and the first half of February.
A Turkish trader reported, “We think stocks in warehouses in the south region are not high these days. Nonetheless, buyers prefer to be sidelined except for needs-based purchases in order to wait for parity issues to resolve and to track crude oil futures which gave some losses earlier this week.”
Another seller commented that demand for PP was better than for PE. “We see good demand for PP fibre despite this week’s fragile economic atmosphere. LDPE and LLDPE are not performing that badly while HDPE is sluggish amidst more sources available in the market,” he stated.
Now that increases in crude oil prices lost steam, the holiday in China is around the corner and parity issues are dominating the market activity, PP and PE prices may not post any more major hikes over the near term, argued some converters. A PP buyer said, “The post-holiday market direction in China will shape the market trend.”
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