Turkish PP, PE demand failing to emerge after elections

LONDON (ICIS)–The improvement in demand in the Turkish polypropylene (PP) and polyethylene (PE) markets that many expected to emerge following regional elections on 30 March has so far failed to materialise, sources in the market said on Wednesday.

Buyers, traders and sellers involved in Turkish PP and PE expected to see some improvement in buying activity mid-April after the elections, hoping the outcome of the vote would see the lira strengthen against the US dollar, and confidence from the buyer side of the market return.

While the lira did improve at the beginning of April, firming to 2.09 on 8 April, it has subsequently weakened to 2.12 on 16 April, which has impacted on buyers’ already fragile confidence.

As a result, demand levels are still the same as in March, with no immediate sign of improving.

“The demand is still below expectations after the local elections,” a buyer of PE grades said.

In the PE market, a trader offering Middle Eastern low density (LDPE) and linear low density polyethylene (LLDPE) into Turkey had to reduce prices by $10/tonne this week after increasing by $20/tonne last week because buyers were not interested in concluding deals.

“We had to go down [in] our prices by $10/tonne because of some leftovers [from last week] because we couldn’t sell,” the trader said.

Several producers and traders in the market appear to have been left with excess stock because of lower-than-expected demand levels, making higher prices unachievable.

“People are laughing at producers,” a second trader said of some suppliers’ attempts to pass on higher prices in April.

The outlook for May is also not looking too positive from some players’ perspectives.

“Very pessimistic, I don’t see any increase in May,” the second trader said.

“There are presidential elections [later in the year in Turkey], everyone’s still afraid about what will happen in the future. I don’t feel safe,” it added. The trader also highlighted the fact that, because of higher interest rates implemented by the Turkish Central Bank in January, and banks in the country cutting credit lines to their customers, buyers are too afraid to purchase large quantities and are sitting on their cash.

“Even though most of the traders’ anticipation is price increase for May, I think the prices will be [a] rollover,” the PE buyer said.