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Turkey’s PP market on par with China, LLDPE and HDPE trade at discount

by Merve Madakbaşı -
  • 05/07/2019 (09:45)
Import PP and PE prices have retained their downtrend in Turkey as July kicked off with mostly lower price announcements when compared to June. Nonetheless, an increasing number of players opined that prices may start to stabilize based on the firming in China.

China’s import PP, PE markets up, chasing local prices

China’s PP and PE markets extended gains for a second straight week owing to the renewed trade truce with the US following the G20 summit that took place in late June. The rising futures market attracted Chinese buyers to the market, while lower domestic stocks added to the upbeat sentiment.

The import polyolefin ranges posted up to $30/ton increases on a weekly basis. A Saudi Arabian major’s July PP and PE offers to China represented slight increases when compared to their late June levels.

Sentiment in Turkey only partially influenced by China

Players are now questioning whether or not the bottom has come for Turkey after 2 months of relentless decreases. Import PP prices have fallen to more-than-two-year low this week, according to the weekly average of ChemOrbis Price Index, while LLDPE and HDPE hit a 10-year-low as of the end of June.

According to some, both PP and PE have given signs of stabilization for the coming term as sellers are renewing confidence based on relatively increased inquiries and the prevailing prices in China.

Import PP, PE in Turkey now lack premium over China except for LDPE

Under balanced market conditions, Turkey is expected to carry a premium over China given its relatively smaller market share and freight differentials. However, the weekly average from ChemOrbis Price Index suggests that import PP in Turkey is now trading on par with the average of China in the midst of opposite directions of two markets.

Moreover, LLDPE and HDPE film are trading at respective discounts of $10/ton and $30/ton to China these days. Import LDPE film prices, meanwhile, still have a healthy premium of around $70/ton, buoyed by limited import availability in Turkey. This fact kept price drops in check for this particular product.

Will theoretical facts help Turkey shift direction?

A bunch of factors including the approaching summer holidays and lower ethylene costs in Europe as well as the ongoing weakness in economy keep buyers cautious.

A manufacturer commented, “Sellers are unwilling to provide the low levels they were previously giving , pointing to the recent gains in China. However, we plan to buy based on our needs for another month since we faced lower end product orders from our European end customers.”
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