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Turkey’s PS, EPS markets retain uptrend on low availability

by Merve Madakbaşı - mmadakbasi@chemorbis.com
  • 17/09/2021 (13:16)
Import and local styrenic markets have been on a rising trend since early Q3 in Turkey. The main drivers have been pent-up demand amid the high season for certain applications as well as overrated shipping costs, which have both led to dwindling supply.

Trend shrugged off lower European styrene contract in Sept

Some players had a skeptical approach to the September outlook earlier this month, citing a sharp decline in September styrene contracts in Europe. Nevertheless, the impact of the settlement on downstream markets was stymied by bullish factors, including satisfactory demand and modest supply in Turkey as well as higher butadiene contracts in Europe.

Meanwhile, the uptrend in EPS matched earlier projections. September increases even surpassed consumers’ expectations as shortness in nearby Europe has persisted into October and kept exports to Turkey inadequate.

Turkey lacked European volumes

Moreover, players reported not being able to receive European GPPS offers this month despite a downtrend across the region. “Some HIPS grades were also quite limited,” affirmed players. Thus, buyers’ previous hopes to hear competitive prices from the region fizzled out shortly after.

As for EPS, a trader reported to ChemOrbis, “We may issue another increase before the month ends since our allocation is limited amid an ongoing tightness for EPS black/grey in Europe.”

Reduced supply pushed South Korean offers north

Persistently soaring transportation costs have been a hot topic in commodity markets, including polymers, since the Covid pandemic blew up in 2020.

Since then, the logistical chaos has been far from resolved.A reinforced container shortage across the world ahead of Christmas, coupled with congestion at ports driven by weather events or the pandemic, added to the crisis and kept freight rates elevated.

Indeed, South Korean PS offers for October have shown up with triple-digit increases, confirmed multiple traders in Turkey. Initial offers at $1950/ton for GPPS and $2100/ton for HIPS, CIF Turkey, cash no duty, received a lukewarm reaction from Turkish players, at a time when delivery delays have already taken center stage.

Turkey – Local - GPPS - HIPS - ex-warehouse

Domestic producers report a lack of prompt stocks

Adding to supply tightness has been a lack of material from domestic producers. Buyers confirmed, “Both local PS producers lack prompt stocks for now, while they point to buoyant buying appetite that has been in place since the summer season kicked off.”

Besides, rising demand from Europe also caused several Turkish EPS producers to focus on their exports to the region during the last few months, leaving Turkey without sufficient material. This coincided with healthy end product orders amid seasonal support.

Prices for September were assessed to be $130-150/ton higher at $1790-1810/ton for regular EPS white and $1810-1830/ton for non-flammable EPS white, ex-warehouse Turkey equivalent, not inc. VAT. Some higher prices at $1900/ton/above were also heard, although have not been confirmed by the wider market.

Locally-held PS hit highest levels since May

The combination of reduced exports and domestic tightness spurred demand for prompt materials. The distribution channel has reached a 4-month high recently as supply diminished further. “The reopening of schools, as well as higher consumption of disposables, contributed to the upward trend,” commented players.

According to ChemOrbis Price Index, the weekly average prices of GPPS and HIPS have been up by around $45-100/ton in total since the end of August.

Upstream chain mostly supportive

While global crude oil futures have displayed a firmer trend thanks to lower commercial stocks in the US and weather events, downstream styrene prices have also held strong. Spot styrene prices on FOB Korea basis surged by nearly $100/ton from late August, ChemOrbis data suggested.

Yet, butadiene prices on CFR China basis were on a downtrend with the spot market slumping $350/ton in the same period.

In Europe, Ida-driven outages in the US propped styrene prices up with spot offers on FOB NWE basis gaining $25/ton in total.
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