25 July 2013 16:37 [Source: ICIS news]
LONDON (ICIS)--Polyethylene (PE) and polypropylene (PP) demand in Turkey is slow as holidays, political instability, higher interest rates and cash flow problems affect markets, sources said on Thursday.
“The market is terribly quiet, but at least the very low offers from Europe are not coming any more,” said one trader.
Tightening availability in Europe and expectations of higher monomer contracts for August have led to less material being offered from western Europe into Turkey this week.
PE and PP prices are largely stable, however, as business is thin and sellers do not expect to be able to prompt improved buying interest with lower offers.
High density polyethylene (HDPE) remains the PE grade where sentiment is weakest, but lower numbers were not recorded this week, and levels remained notionally in the low-$1,400s/tonne CFR minimum.
Some sellers held out hope that post-Ramadan sales could increase and tighten availability of HDPE, leading to higher prices, but for the moment sources expect this sector to remain lacklustre.
Low density polyethylene (LDPE) prices have been trading around $1,500/tonne (€1,140/tonne) CFR for some time, and there was little change in prices for this grade. Iranian LDPE is offered lower, but with prohibitively high import duties, only export-oriented sales are workable with this product.
Offers of LDPE from Saudi Arabia are higher, into the mid-$1,500s/tonne CFR, but these are met with little buying interest.
PP prices are also largely stable, around the $1,500/tonne CFR level, with numbers above and below talked. There has been little confirmation of business done this week, and low-priced offers from Europe have disappeared.
Turkey’s central bank raised interest rates for the first time in two years earlier this week following the fall of the lira earlier in July, supporting the local currency. Some local traders expected this move to have a further softening effect on activity, while others saw the move as positive for the economy in general.
The holy week of Ramadan ends on 8 August and most players expect activity to pick up then, but several stressed that the low activity of the current market was down as much to other factors, like credit issues and political uncertainty, as holidays.
($1 = €0.76)
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