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Turkey’s import PVC market gains premium over Europe

by ChemOrbis Editorial Team -
  • 01/12/2016 (09:09)
According to weekly average prices on ChemOrbis Price Wizard, import PVC prices for European origins in Turkey have been trading above the local European PVC market on dollar terms over the past two weeks. This is the first time since late April 2015 that Turkey has carried a premium and this is the result of the upward momentum that began in the country in October. Under balanced market conditions, the European PVC market traditionally carries some premium over import offers in Turkey.

The firming sentiment in Turkey’s import market has been mainly driven by European suppliers’ decisions to considerably reduce their quotas to the country for more than two months while the upward wave in other global import markets like China and India during that period also supported the rally in prices.

Source: ChemOrbis Price Wizard

Turkish players noted that they could not see any reason behind the European PVC sellers’ reduced exports to Turkey at a time when import PVC prices were rising in the country, except to speculate that the sellers were probably finding better netbacks in India and China at the time. No major production outages were reported in the region that would affect the sellers’ supply levels.

However, a comment from a West European PVC producer to ChemOrbis this week, as well as, the softening spot ethylene costs in Europe caused some players to think that the upward momentum in Turkey’s import market may fade soon.

The West European producer pointed out that some cargoes might be exported to Turkey in December, where prices are carrying a premium above the European market, since this would allow European producers to maintain their current price levels in their local markets. The producer also added that December will be a short month and demand will slow down further due to the holidays.

Spot ethylene costs in the region, meanwhile, have been tracking a softening trend since late October to be currently reported at around €790/ton FD NWE.

In addition, the upward momentum in China and India has lost momentum recently. Chinese PVC players report that they expect to see some correction on prices in the near term as prices have already increased too much and January PVC futures on the Dalian Commodity Exchange have witnessed declines in the last two weeks. Market activities in the Indian PVC market have also come to a standstill recently after the government’s demonetization decision.
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