Turkish polymers at 18-month lows on weak demand, lower upstream

LONDON (ICIS)–Turkish polypropylene (PP) and polyethylene (PE) average prices are at 18-month lows because of weak demand and lower upstream costs, price data from ICIS showed on Friday.

The average PP homopolymer injection moulding price was assessed at $1,430/tonne cost and freight (CFR) Turkey on 21 November, according to ICIS, the lowest level since the average price hit $1,420/tonne CFR levels on 26 April 2013.

Low density polyethylene (LDPE) average prices were assessed at $1,450/tonne CFR Turkey on 21 November, the lowest levels since 10 May 2013 when the average price was $1,425/tonne CFR.

High density polyethylene (HDPE) prices are at 12 months lows at $1,470/tonne CFR Turkey on 21 November.

Spot CFR prices in Turkey have dropped significantly since the middle of quarter three, when lower crude oil prices saw European ethylene and propylene contracts drop in September, November and December, and roll over in October, which Turkish buyers used as a reason to pressure suppliers for lower prices.

Other factors in the Turkish market added to the bearish sentiment, such as weak PP exports to key markets in the region, cash flow and credit issues which saw buyers unable to make payment for cargoes, and weak end-user demand come together to create a very cautious buying attitude in the country.

However, while CFR prices have dropped, the gap with ex-bonded warehouse prices for HDPE film have increased to almost $100/tonne, much higher than the traditional $30/tonne average. This is due to buyers preferring to take smaller prompt parcels from Middle Eastern producers who keep material in bonded warehouses in Turkey.

Producers have now limited the amount of material held in their warehouses, causing prompt spot prices to increase dramatically for HDPE film grades.

                               PE Turkey 2013/2014