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What lies ahead for Turkey’s polymer markets after holiday?

by Merve Madakbaşı - mmadakbasi@chemorbis.com
  • 31/05/2019 (08:25)
Muslim countries are set to celebrate Eid Al-Fitr holiday next week. Before leaving their desks, Turkish players expressed their post-holiday expectations on a weak note, except for PVC.

PP and PE moved south, new drops seen likely in June

Polyolefin markets weakened in the latter part of May as discounts from traders became relatively visible under the shadow of economic concerns and holiday lull. Evaporating demand pushed prices under new thresholds both for PP and PE before this month ends. Some June offers and sell ideas have already surfaced $20-50/ton below May.

Irregular Chinese and Vietnamese homo PP origins have shown up in Turkey lately but failed to grab buying interest. Buyers reported, “We find it risky to secure long distance cargoes considering the current downtrend in Asia and low season in Turkey. Some buyers are even offering their raw materials in need of cash before closing their factories during the long holiday soon.”

For PE, American prices pioneered price cuts, yielding to globally shy demand amid trade disputes with China. US LLDPE offers broke below the $1000/ton CFR threshold in markets including China, Turkey and Indonesia on supply glut.

Eyes fixed on China PP, PE markets

Still, PP and PE players will remain curious about the upcoming developments in China during the absence of several markets including Turkey, Egypt, Middle East and a part of Southeast Asia for holidays.

According to ChemOrbis Price Indexes, Turkey’s import markets carry a premium of $20-40/ton for PE and $70/ton for PP over import offers in China.

PS faces stiff pressure from aggressive domestic offers

The import market turned down in May as falling upstream costs and waning activity amid economic and political concerns overshadowed seasonal factors. Following suit, domestic producers were reportedly providing quite competitive prices. Buyers mostly postponed their purchases to the last possible moment in anticipation of seeing additional decreases after holidays, in the meantime.

New European styrene contracts are projected to post three-digit drops, which also contributed to the bearish PS expectations. A global trader opined, “European PS cargos flooded Turkey at aggressive prices in the last couple of months. This situation coupled with economic uncertainties forced distributors and domestic producers for an aggressive attitude.”

PS prices in Turkey are projected to remain under downward pressure from European offers for June as they are expected to come lower.

PVC sellers buoyant for June, buyers cautious

Supply issues at Brazil’s Braskem encouraged European and US sources to apply June hikes right before holidays.

Traders reported, “A congestion that has recently occurred at Port Houston also paved the way for firmer US offers with some part of shipments being directed to New Orleans.”

A tug of war is probable between sellers and buyers following the long holiday as converters are readying to push for discounts from initial levels. “We received significant increases of $50-70/ton from different US suppliers. However, we are not planning to pay any hikes beyond $25/ton,” a profile manufacturer distinctly stated.
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