Turkish PE, PP markets hit by weak currency, upcoming holidays

04 July 2013 16:53  [Source: ICIS news]

LONDON (ICIS)--Turkish polyethylene (PE) and polypropylene (PP) markets are very slow, affected by the recent fall in the value of the local currency and also upcoming Ramadan holidays that begin on 9 July, sources said on Thursday.

Truck delivery problems caused by issues in Egypt are affecting supply, and PP availability in particular is impacted, but demand is not strong enough for any real effect so far.

“The market is really lousy,” said one trader.

High density polyethylene (HDPE) was widely considered to be the weakest PE grade, and while levels of $1,400/tonne (€1,078/tonne) CFR (cost & freight) were said to be available at large accounts, $1,430-1,450/tonne CFR was also said to be viable. Levels of $1,500/tonne CFR, offered from Saudi Arabia, did not find many takers. The representative level for HDPE in early June was $1,450/tonne CFR minimum.

HDPE supply is ample, with product available from Iran and other Middle Eastern sources.

PP prices were relatively stable as deliveries via Egypt have been disturbed by political events there and less material is consequently available in Turkey. Truck deliveries via Syria from Saudi Arabia have been problematic for several months, and the Turkish PP market is widely considered to be stronger than the PE sector.

Iranian PE plays a much larger role in Turkey than Iranian PP.

Several sources have pointed out that PP prices could increase on tightness if only demand were better at present. Prices are discussed within a wide range, and while levels in the mid-$1,400s/tonne CFR are said to be available to a limited number of large buyers, most sources see $1,500-1,510/tonne CFR as more representative of the current homopolymer business.

A limited amount of PP was offered from Europe but less than in May, when European demand saw a sharp upturn and led to fewer offers to export destinations.

The polyolefins market in Turkey is expected to slow down even further in coming weeks as Ramadan begins.

($1 = €0.77)

By: Linda Naylor
+44 20 8652 3214

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