Turkish polymer players leaving market for holidays, eyes remain on economy
After testing above 7 last Friday, the USD/TL parity has been on a decreasing trend since the beginning of this week owing to a series of precautions taken by the Banking Regulation and Supervision Agency as well as the Central Bank. The news that Qatar was planning a USD15 billion investment in Turkey also relieved the market to some extent and contributed to the recent gains of the Turkish Lira.
The majority of Turkish participants stayed on the sidelines during the last working week before the Eid-al-Adha holiday that will be celebrated on August 21-24 in Islamic countries.
A global polymer trader remarked, “A widespread waiting mood is in place as we have been going through extraordinary times. Players were not able to concentrate on buying or selling activity with some of them leaving the market earlier under these circumstances.”
Players refrained from making certain projections regarding the post-holiday period amid ongoing economic uncertainties and global trade wars although some of them shared their point of views.
In the PP market, the previous competitive offers faded this week due to the lack of trade and sellers’ unwillingness to provide any further discounts. “Prices have hit the bottom and are almost at par with the import levels in China. Suppliers plan to take a firm stance on their pricing after the Eid holiday,” said a player. On the other hand, several buyers in the southern region continue to run their factories at lower rates. “We don’t think that the market could go up considering the current cash flow issues and lack of bank loans,” said a converter.
PE draws a weaker picture compared to PP, traders concurred. “We are not sure about what to expect regarding the post-holiday. Though the market seems to be relieved a bit after the recent cool off in currency,” stated a seller.
“PE sellers may not be able to lift the market although prices should theoretically be at bottom,” a buyer commented. Fewer manufacturers have purchasing power due to the lack of bank loans and sellers’ unwillingness to make sales with long payment terms, according to another one.
The sentiment for PVC is likely to remain under pressure from smooth supplies and thin buying appetite. “Most buyers will probably wait for parity to stabilize before taking their next steps,” said a large trader, who confirmed additional drops of $10-20/ton both for import and local materials on the week. Meanwhile, some Turkish real estate companies are planning to boost the country’s construction and housing sectors by slashing mortgage rates and reducing down payments for mortgages, which may help the PVC market recover on the longer run.
Regarding PS, the local market clearly lagged behind the firming for imports as buyers avoided from engaging in fresh cargos due to unstable economic atmosphere. Yet, PS sellers expect high styrene costs to support the market after holidays, with some distributors already adopting a firmer stance on their local offers. “We are not willing to sell with losses anymore,” a seller noted.
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