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Turkey’s PP markets rise around 10% in a month

by Merve Madakbaşı -
  • 09/07/2021 (09:06)
PP prices in Turkey have retained their uptrend for the third successive week, driven by reduced stock pressure on suppliers. Although activity has not been as buoyant as it was in the previous few weeks, sellers plan to apply new price hikes in the coming term.

Import– CIF Turkey– Local – PP Raffia – PP Fibre

Waning stocks encouraged sellers to issue hikes

Suppliers have been raising their prices gradually since around mid-June when the market plateaued following a 3-month long bearish run. Many buyers were back to the market to replenish some stocks after realizing that prices had hit the bottom, which bolstered demand.

Offers added to their gains this week, although the previous panic mood calmed down among buyers. Origins that are subject to 6.5% duty, including Saudi Arabian and Russian cargos, were assessed at $1350-1370/ton for raffia and $1400-1430/ton for fibre, all CIF Turkey, cash.

Indeed, prices on the lower ends of these ranges belonged to earlier this week, while sell ideas were expressed higher at $1400/ton for raffia and $1450-1470/ton for fibre in some cases.

According to the weekly average data from ChemOrbis, import PP raffia and fibre prices have gained 9-10% (around $130/ton) in total during the last 3 weeks. The easing stock pressure on the side of sellers was among the main triggers behind the upturn.

Market poised to increase further despite nearing holidays

Some players pointed to possible delays in deliveries from the Middle East in the shadow of the nearing Eid al-Adha holiday.

“A lack of fresh volumes from regular exporters to Turkey will probably mitigate the impact of long holidays and keep the trend firm in the coming term. Any delays in shipments would also provide an upper hand to suppliers,” commented a player.

Traders reported feeling free from sales pressure, dropping a hint about possibly tight availability for the period following religious and national holidays in late July.

Scarcity of Iranian offers, Petkim’s move underpinned sentiment

On top of diminishing volumes from Middle Eastern and Russian producers, players reported a lack of plentiful offers from Iran and India.

“Sellers may have preferred to direct their cargos to Europe amid better netbacks or they may have been attracted by the recent recovery in demand from parts of Asia,” some participants explained.

Additionally, the domestic producer, Petkim, hiked their list prices for the first time since February early this week. This contributed to the firming, according to some buyers. The locally-held PP raffia market has soared by around 12% since the upturn kicked off last month.

Impact of Eid, trajectory in China will stay under close watch

Early expectations for the post-holiday period call for further hike attempts from PP sellers regardless of the state of demand.

Suppliers will be counting on reduced availability from regular sources as well as inflated shipping fees and still-high upstream costs. These factors may counterbalance the impact of temporary suspensions at several manufacturers during the holidays that will stretch from July 15 to July 25.

In the medium term, meanwhile, it remains to be seen whether or not prices in China will maintain their firming trend in the shade of upcoming capacities and the ongoing woes over Covid in parts of Asia. According to ChemOrbis data, Turkey’s import PPH market currently trades at a premium of $240/ton over China.

As a side note, Europe is on the brink of summer holidays, which may hinder export business on the part of Turkish manufacturers in the coming days.
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