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Turkey’s import PP and PE markets on verge of August hikes

by Merve Madakbaşı - mmadakbasi@chemorbis.com
  • 30/07/2021 (08:00)
Most polyolefin players have returned from extended holidays, while both the PP and PE markets have opened the post-Eid period on a firm footing amid a limited number of offers. Waning prompt availability, delivery delays from the Middle East, as well as the supportive upstream chain are expected to pave the way for higher prices in August.

Fresh offers were delayed until next week amid firm sentiment

A limited number of import PP and PE offers have been reported so far this week. This is because most traders opted to wait for new guidelines from their suppliers regarding August. “Sellers have held onto their offers as they were encouraged by a strong outlook for the new month. A few of them voiced their higher sell ideas, but shied away from giving official prices,” opined buyers.

Petkim’s increases lent support to traders

The PP and PE markets opened the post-holiday period on a firm footing due to a slew of factors. Prompt supplies were reported to be low for both products, with delivery delays from the Middle East adding to the scene.

“Most sellers depleted their stocks throughout the bearish run back in June. Moreover, there are not many vessels on their way to Turkey for August given the impact of Eid al-Adha on logistic operations,” said multiple players.

Besides, the domestic producer, Petkim, applied increases to its list prices, which bolstered the LDPE market, in particular. Accordingly, the producer raised PP by $40/ton, while lifting LDPE and HDPE prices by $80/ton and $50/ton, respectively in less than a week.

According to a general feeling, Petkim is likely to issue an additional increase to its LDPE prices in early August. "Petkim’s firmer policy was supported by active post-Eid demand. The move also encouraged traders to aim at import hikes," commented players.

Middle Eastern polyolefin offers set for notable hikes

In the PP market, Saudi Arabian PPH offers have moved up by $40-50/ton for raffia and $70-80/ton for fibre when compared to the last week before the holidays. According to expectations, offers may head to $1500/ton for raffia in the coming days, while fibre may test levels close to $1600/ton, all CIF Turkey, subject to 6.5% customs duty, cash.

Middle Eastern PE offers are expected to emerge with increases of around $100/ton on the back of supportive demand and limited volumes from the US, Asia, and Iran. A PE buyer said to ChemOrbis, "Most buyers preferred to meet their needs from the prompt market back in July. Therefore, not many quantities are on the way nowadays. This may probably keep the demand for prompt materials vivid."

Will the uptrend show resemblance with the February rally?

Players concur that import PP and PE offers are on the verge of notable gains on supportive costs and supply-demand dynamics. Nevertheless, they emphasize that the size of possible gains will not show a resemblance with the massive rally in February when the industry was hit hard by meteoric hikes driven by tightness.

“Sky-high freights are likely to keep the market from attractive offers from Asia in the medium term. This is because logistic hurdles do not signal relief for the rest of 2021. Nonetheless, the limited upside for resin prices and the capacity additions in China will remain under close watch in the long run,” argued some players.
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