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Turkish polymer players voice optimism about post-Ramadan demand

by ChemOrbis Editorial Team -
  • 24/06/2016 (03:37)
Turkey’s polymer markets were on a bearish path since mid-April in tandem with falling Asian markets and slowing trade. Consecutive price declines sent PP, PE and PS buyers to the sidelines to keep their purchases to the bare minimum while the Ramadan lull hampered trade further. However, sellers started to adopt firmer stances since last week as demand is expected to revive to some extent in the post-Ramadan period.

Sellers of Saudi Arabian and Iranian PP origins continued to express higher import sell ideas for July and lifted their list prices by up to $40/ton. Buying interest showed a slight up-tick as shifting sentiment boosted inquiries from converters which reinforced optimistic expectations for a demand revival on the part of sellers regarding July.

A sack maker commented, “An agent of a Saudi Arabian supplier aims to obtain above the $1000/ton CIF threshold for homo PP raffia next month. The market obviously turned up, although we are not sure how long it will last.”

Inquiries are up both for raffia and fibre, said a trader, adding, “We have higher sell ideas for Iranian PP materials for the period after Ramadan while we are not actively offering material for now. The PP market turned north apparently. Plus, supply from Iranian and Saudi Arabian producers may be limited as they prefer other destinations to sell.”

An Indian PP supplier plans to return to the market with $50/ton hikes next week. “Producers do not have stock pressure as Chinese PP sellers cut their production, Middle Eastern supplies are down as well due to Ramadan and there is reduced PP output at some European producers,” said the seller.

A global producer lifted its list prices by $30-40/ton on a weekly basis for homo PP grades and LDPE film given stronger sentiment in Asian markets. “Demand from converters remains limited and we did not conclude any deals at those notional levels, except for some LDPE. Nonetheless, we believe that the market will move up to those levels in July.” A Middle Eastern PE producer also voiced $30-50/ton higher targets for LDPE and LLDPE and reminded, “Demand did not change compared to before but inventories should be down which supports firmer sentiment among sellers.”

A relatively firmer attitude emerged for Uzbek PE materials too. “We achieved better sales particularly for HDPE film grade and we have less HDPE b/m stocks left. Inventories at converters may be diminishing. Meanwhile, we turned to alternative markets since Turkey has not been providing a good netback recently,” a trader noted. On a local basis, prices below $1400/ton became scarce for this origin.

Distributors slightly lifted their local homo PP and PE offers, while they intend to adopt a firmer policy for PS as well in the days to come. “We raised our homo PP raffia and injection prices given better buying interest, while we kept our PS offers flat on the week. We believe all polymers will witness hike attempts after Ramadan which may also be felt for PS as well," a seller argued. Another one agreed, “We will push for higher levels as decreases for PS seem to have stopped although demand is still not very bright. We expect PS prices to stabilize before firming up later similar to PP.”

On the other side of the coin, players are questioning whether a possible demand recovery would be long lasting or not. “The market may revive a bit after Ramadan, but only for 10-15 days unless end markets really improve. We will buy some amount next week not to stay without inventory right after holiday as there might be a temporary tightness,” a PE converter noted. Another player agreed, “Local PP prices rose by $40-50/ton, whereas those gains will not be sustainable. Several large-scale converters will shut their factories in mid-July for around 1 month for holiday which may affect demand negatively." Some carpet manufacturers confirmed that they will shut their factories between mid to end July.

The outlook for PE is not as firm as for PP so far, players concur, while they don’t expect sharp hikes to pass on deals for both. Turkey will face ample HDPE supplies over the longer term, some players remind, Iranians will also return to the market after holiday which may hinder a possible upturn. Similarly, competitively priced Iranian PS materials and moderate activity are likely to prevent a quick upturn for this product over the short term.
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