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Will hike targets see acceptance in Turkey’s polyolefins markets?

by ChemOrbis Editorial Team -
  • 26/08/2016 (18:12)
In Turkey, import PP and PE markets were on a bearish trend for more than a month before sentiment improved heading to the end of August driven by the upturn in the upstream chain. Several players voiced their opinion that prices were nearing the bottom for both products, although persistently discouraging demand remains as a question mark among participants regarding the future direction.

Polyolefin suppliers have been expressing their intention to lift the market up since last week as PP and PE prices have been lacking a premium over China during the last couple of weeks. Accordingly, Middle Eastern and Iranian sources attempted moderate hikes this week which caused the previous low ends to fade away, with some of them citing their limited allocations for Turkey.

A source from a global producer reported, “Our sales for LDPE are a bit better than for PP. We don’t have much Middle Eastern allocation for Turkey since we prefer to direct our materials to Africa and the Middle East considering the low netback in the Turkish market.”

Another regional supplier voiced higher PE sell ideas for September. “Price decreases seem to have stopped. LDPE prices hint at small gains given supply limitations, while we hope to conclude our LLDPE and HDPE deals close to our sell ideas at least,” the seller stated. Another Middle Eastern PE producer expects LDPE could gain $10/ton while he thinks that other PE grades could see rollovers if not price hikes on transactions.

However, manufacturers did not hurry to purchase any material beyond their immediate needs so far. According to buyers, sellers are trying to bring the market back into balance with China, while they don’t think that these hike targets will materialize since the Eid Holiday is around the corner.

“We are aware that the market sentiment is shifting, but we already purchased some material at attractive prices early last week,” a carpet maker commented. PE packagers were skeptical about hike intentions on the horizon, saying, “Cash issues, political tension and nearing holiday will probably keep end business hindered. We don’t foresee a real upturn for PE at the moment.”

Spot propylene and ethylene prices have posted remarkable increases both in Europe and Asia due to the higher energy complex and some cracker shutdowns across the board, which provide support for a firmer trend. However, some players don’t think a sustainable upturn is likely until after the Eid Holiday in September. “Prices may only see small upwards corrections as demand is still hesitant and China is not rising. Moreover, players in Turkey will enter a holiday mood starting from next week,” they comment. A trader opined, “PP and PE markets may witness modest hike attempts, while supply-demand dynamics will determine whether those targets will see acceptance or not depending on the product.”
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