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Turkey’s import PE market up in Sept, pressure on LDPE grows

by Merve Madakbaşı -
  • 11/09/2020 (09:16)
Middle Eastern PE suppliers announced PE hikes as September kicked in since poor netbacks in Turkey prompted more sellers to focus on their exports to profitable China. Previous expectations for a stable trend with discounts faltered starting from late last week given supply limitations particularly for LDPE.

Suppliers had failed to achieve their firmer price goals back in August and had to step back from their initial offers by the middle of the month. This was mainly due to mediocre demand amid the sharp depreciation of Turkish Lira against the American dollar.

Middle Eastern LDPE was notionally up by $20-30/ton to $1000-1020/ton CIF Turkey, subject to 6.5% duty, cash. No real offers being confirmed at the time of publication amid a lack of allocations from regional suppliers for September. LLDPE c4 film and HDPE film prices posted similar gains on the week to be assessed at $900-910/ton for LLDPE c4 film and $920-930/ton for HDPE film. Transactions were also confirmed at these levels.

“Import volumes were scarce to Turkey. Suppliers from the Middle East, Uzbekistan, South Korea, India and preferred to direct their cargos to China where demand was vivid amid the appreciation of CNY/USD and prices provided much higher netbacks. Plus, the storm-hit production in the US halted fresh offers from the country to the export outlets including Turkey,” said a global trader.

The short-term outlook remains on the firmer side so long as China maintains its strength. Turkish buyers returned to the market to restock following higher announcements although cautiousness remained in place amid COVID-19 pandemic.

Netback calculations suggest that prices in Turkey has room to move up further, particularly for LDPE as it trades at a $56/ton discount to China. The weekly average data revealed that LLDPE is trading on par with China, while HDPE film only has a premium of $15/ton.

On the other side of the coin, whether or not the recent losses in energy complex will keep increases in check in China or weigh on upstream ethylene costs in Asia remains as a question mark for now.
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