Turkey’s local PP market slumps
After hitting the highest levels since July 2015 by the second week of March, Turkey’s local PP raffia market stabilized last week. Activity significantly slowed amidst shifting expectations on the part of buyers, most of whom secured their needs at the start of the month. Lower crude oil and spot propylene prices in Asia as well as the fact that Turkey has been trading with a large premium over China’s import market pushed manufacturers to the sidelines in order to wait for downward adjustments from PP sellers.
This week, the locally-held homo PP raffia prices declined by around $50/ton on a weekly average, according to ChemOrbis Price Index, following last week’s discounts from traders in the import market. The prevailing homo PP raffia range is reported at around $1470-1580/ton ex-warehouse Turkey, cash inc VAT. The range indicated a decrease of $50-60/ton when compared to a week earlier.
A large converter voiced his expectations to see additional price cuts over the short term. He said, “Supply for various PP grades was tight in the last months due to the lack of sufficient availability from markets such as Iran, the Mid-East, India and Egypt. Among those grades, BOPP supply was also tight, which we believe boosted more demand for PP raffia as an alternative product and pushed prices further up.”
A large trader stated, “Overall demand is weak these days. PP is performing worse than PE as sack makers are running their plants at reduced rates and have decided to suspend their purchases for a while so that the bubble Turkey has over China has been comparatively eliminated.”
A distributor similarly reported, “Expectations for price drops have materialized this week amidst rapid falls. We had to reduce our local PP raffia and injection prices by $50/ton. Yet, buying interest for our prices remains poor given more competitive prices being available in the market.”
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