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Turkey’s PP markets see upward corrections on resurgent demand

by Merve Madakbaşı - mmadakbasi@chemorbis.com
  • 18/06/2021 (03:34)
PP prices in Turkey have bounced higher after hitting their lowest levels in 6 months in early June. Following a massive free fall in May, players were confident that prices had no further room for additional drops, which prompted buyers to return to the market. An up-tick in activity has underpinned the recovered sentiment, while cautiousness persists for the long run.

Import PP Prices– Raffia – Fibre – CIF Turkey


Demand picked up starting from last week

Multi-month lows appeared appealing to PP customers, with the majority of them eager to cut costs associated with high-priced cargos that they had previously secured.

Furthermore, Chinese PPH offers that were competitive in previous months have vanished. This was not a surprise considering Turkey’s narrowing premium over China’s import PP market, coupled with the closure of the arbitrage window from Asia due to soaring freight prices.

Several buyers secured PP raffia cargos at $1200-1250/ton in early June, realizing the market had reached a plateau. Sellers reported to ChemOrbis, "Demand has revived since last week. We have issued upward corrections to our prices this week, while the latest levels have seen acceptance so far."

Consumers also affirmed relatively improved demand, with a large buyer commenting, "Sentiment on the sellers’ side has improved after they eased their stock pressure amid aggressive sales. Upward corrections were inevitable after the market collapsed last month and demand remained slack for a long time."

Sellers intend for additional hike attempts

According to players, the resumption of activity stemmed from the fact that buyers are willing to have some material on way for late July delivery to be on the safe side. If China’s import market turns up, this may bolster the firmer stance of global producers after holidays in Turkey. Thus, buyers are keen on eliminating the possibility of paying any hikes in the coming term.

Cautiousness persists in the shade of July holidays

Muslim countries are ready to celebrate the Eid al-Adha holidays on July 20-23, 2021. Some players doubt the sustainability of an upturn in Turkey, particularly if the holiday is combined with a national holiday on July 15 and dents demand.

A seller admitted, "Unreasonable hikes may push buyers out of the market once again in the medium term. As a result, we intend to implement modest hikes based on the sustainability of active demand."

According to the weekly average data from ChemOrbis, Turkey’s premium over China’s import PP raffia market has widened to $220/ton from $135/ton. This is mainly because prices firmed up in Turkey, while China stabilized with slightly improved demand for imports, which regained their competitive power against local materials, and ongoing pressure from fresh capacities and bullish crude oil futures.

To put it another way, Turkish players will need to assess China’s future trajectory as well as the impact of holidays on demand in the short term to determine whether or not the market will maintain its firmness.
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