Price and market trends: Turkey polyolefins demand slowing

22 March 2013 09:14  [Source: ICB]

Polyethylene (PE) demand in Turkey is low, at a time when the volume of offers from various regions has increased and global demand has taken a hit, sources said.

"The market is asleep," said one trader. "People aren't buying because they expect prices to fall."

EU PE

"In the past few days offers have gone down drastically," said another on 18 March.

Material from Europe is now being offered into Turkey, as a result of flat demand elsewhere in the region. Low density polyethylene (LDPE) and polypropylene (PP) offers have been heard.

OFFERS FROM EUROPE

PP offers from Europe are said to be around €1,200/tonne ($1,558/tonne) CFR, while LDPE is talked at €1,260-1,270/tonne CFR. European product is not subject to duty, so is higher than many offers from dutiable areas on a CFR basis. No European producer has confirmed selling at such numbers but buyers in Turkey say they have bought PP in particular.

High density polyethylene (HPDE) is still offered from Saudi Arabia at $1,600/tonne CFR, subject to 6.5% duty, but sources question how much product is behind these offers and stress that such prices, confirmed by buyers at the end of February, are no longer workable.

Buyers' price ideas for Iranian HDPE are now at $1,500/tonne CFR and sometimes below, and little business is reported to have been done. Holidays and truck availability issues have also led to a slowdown of this business, on top of the hesitation from the market in general.

Turkish buyers keep a close eye on price movements in Asia, and Iranian HDPE cargoes were offered the week ended 15 March barely above $1,300/tonne CFR in some cases. The difference between freight and the availability of transport makes a big price difference inevitable, but nevertheless Turkish buyers expect levels to erode.

UNREALISTIC PRICES

"Nobody is buying at $1,510/tonne CFR let alone $1,600/tonne [CFR]," said one of the traders.

"I was offered some HDPE at $1,430/tonne FOB from Asia. Have I bought? No," said another.

"In the end, though, they are running their factories, they will have to buy," it added.

The local Turkish producer also dropped its prices the week ended 15 March, by up to $25/tonne.


By: Linda Naylor
+44 20 8652 3214



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