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Turkish players: Dutiable homo PP is set to see $1200 CFR

by ChemOrbis Editorial Team -
  • 16/12/2014 (17:59)
Given the successive decreases in global PP markets, few buyers are willing to secure cargoes these days in Turkey’s PP market. There is a general consensus that homo PP prices will soon see the $1200/ton threshold on CFR basis for dutiable origins, whereas Middle Eastern cargoes are currently being offered at $1280-1305/ton for raffia and $1250-1350/ton for fibre, all CFR, cash, subject to 6.5% duty.

Russian offers are reported in the raffia market at levels as low as $1250-1280/ton with the same terms. As for Iranian fibre, several buyers said, “We could easily obtain $1300/ton if we were to place firm bids. But we didn’t want to go for it as we are not willing to buy even if the price goes down to $1300/ton from the current levels of $1340-1350/ton CPT, subject to 6.5% duty, cash.”

Netback calculations based on China, where homo PP was offered at $1085-1215/ton CFR, cash, reveal that a large room for price decreases remains possible for homo PP offers to Turkey. Deducting $20/ton freight costs to bring the material back to the Middle East and adding a freight rate of around $70/ton to Turkey, homo PP prices can be theoretically offered at $1135-1265/ton on a CFR Turkey basis.

Therefore, players also believe that the market will break below the $1200/ton threshold soon with some of them deeming the $1100/ton level to be possible.
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