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Türkiye’s polymer markets grapple with subdued demand heading into April

by Merve Madakbaşı -
  • 29/03/2024 (01:50)
The Ramadan lull has been pervading Türkiye’s polymer markets over the last few weeks, weighing on suppliers despite supportive costs. Thin price discussions amid deeper cash flow issues loomed over polyolefins, PVC, PET, and styrenics, with only a few days left before the Sunday election. Moreover, supply for certain polymers was relieved thanks to the arrival of delayed cargos.

PP and PE players on hold amid weak expectations

PP and PE prices were on a steady to softer note this week, with not much trading taking place prior to the fresh announcements. Demand buckled under sluggish derivative segments, while monetary issues and softer expectations also kept buyers sidelined.

“Converters are readying to suspend their operations for some days during the extended holidays. Buyers seem unwilling to restock ahead of the long Eid al-Fitr holiday based on widespread expectations for discounts during the short working month. Moreover, high costs of bank loans and muted exports dimmed appetite,” players commented.

Sources from some Middle Eastern polyolefin producers said, “We were planning to reveal our new PP and PE prices late next week. Nonetheless, we may need to reply to our customers faster, as most of them sounded willing to close their deals before the holiday mood kicks in further.”

Multiple players expect Middle Eastern LLDPE to be dealt below the $1100/ton CIF threshold for the new month. A buyer said, “We may see the mid-$1000s/ton for firm bids depending on the volume. Producers and traders will need to wrap up their sales in a shorter period than usual.”

In the meantime, PP fared a bit better than PE due to support from tight prompt supply. As for PE, HDPE film remained ample, pushing the local offers to a 3-month low. According to the weekly average data from ChemOrbis, HDPE film traded $40/ton below LLDPE C4 film this week.

CIF Türkiye – Import Prices– PP Raffia – HDPE film – PET Bottle

PVC likely to succumb to lower bids

Players’ attention turned to global indications as the Ramadan lethargy coupled with cash constraints kept price discussions thin at home. Besides, fresh offers from some regular suppliers were still pending. Notional prices were stable to softer as crude oil’s rally cooled off and buyers expressed lower buy ideas for the new month, citing globally muted demand.

More PVC producers are expected to set their new prices prior to the long Eid al-Fitr break. Sellers may concede to discounts, albeit in modest amounts. This is based on high costs and a gloomy economy, let alone a weak scene in Asia stemming from long Chinese supply. In the medium term, the impact of the AD probe by India on several import origins will also be under close watch.

“Large buyers will likely obtain duty-free K67 deals below the $880/ton CIF mark while US cargos may slightly break below $800/ton,” a player said.

Tight domestic supply supports PET bottle to some extent

Ebbing demand and reduced volumes counterbalanced each other in the local PET market this week, leading to a steady trend following a softening earlier in March. Import prices were underpinned by stable export offers out of China.

Shutdowns and lower run rates at domestic producers kept supply limited. Some sellers were sold out until June. “Ramadan did not support the beverage and food packaging sectors this year. Yet, PET bottle prices retained their strength mostly,” a player said, adding that the approaching local election kept players on their toes.

Some PET bottle buyers expect to see a demand revival in the post-Eid period as warmer temperatures will boost higher water and beverage consumption. However, if demand does not recover and supply increases, sellers may face pressure.

PS and ABS players monitor upstream chain

Players in the styrenics markets adopted a “wait-and-see" stance, with fresh offers from certain suppliers from South Korea and Europe still pending. Multiple traders commented, “Resin producers are willing to lift their prices further in April. Yet, the nearing holidays and uncertainty over the post-election period keep demand tied to basic needs these days, despite limited prompt supply for HIPS and ABS.”

On the other side of the coin, soaring butadiene prices in Asia and Europe will likely provide an upper hand to suppliers into the new month, versus recently stabilizing spot styrene markets. Although cash flow problems keep the demand outlook murky, seasonal factors and multi-month high oil prices may prompt some buyers to restock following the holiday, according to sellers.
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