Turkish PP price direction unclear following Eid holidays

LONDON (ICIS)–Price direction in the Turkish polypropylene (PP) market was unclear following the end of the Eid ul-Adha religious holiday, with weak demand and the uncertain political and economic outlook in the country making it difficult for participants to gauge the current market mood.

The official end of the Eid holiday in Turkey was Sunday 27 September but many Middle East producers were not back in the office until 1 October and were still considering their options for October offers.

Some early offers were heard in the market, and sentiment amongst some traders within Turkey was more bullish than before the holiday, indicating October may see prices start to rise in the country despite poor demand.

“The market today is a question mark but no one is expecting [prices to go] lower. Actually, if you look at PP, PP is higher because Arabian producers kept the prices unchanged, they did not come down,” a Turkish trader said.

“For PP and PE grades, generally I can tell you there is an increase,” a second trader said, adding that prices of $1,030-1,050/tonne CFR (cost and freight) Turkey were heard from Middle Eastern suppliers Thursday.

Sole Turkish PP producer Petkim “”>increased its PP list prices by $20/tonne late on Thursday.

Middle Eastern producers were seeing prices stable to slightly higher, and expect to have a better idea of price direction from next week.

“October we are seeing the markets are almost the same as September but supply will be little lower and demand will be a little higher,” a major Middle Eastern producer said.

The producer’s monthly offers to its contracted customers were mostly unchanged from September, with raffia offered at $1,050-1,070/tonne CFR 100% cash in advance for October monthly business.

A second Middle Eastern producer saw the market as stable to slightly higher going into October.

“Prices are stable [though] some people might push through some small increases,” it said Thursday.

Both producers saw prices above $1,000/tonne for October, meaning the prices of in the high $900s/tonne seen at the end of September are likely to disappear from the market during October.

Supply may play a small part in firmer October prices as Saudi Arabia’s Rabigh Refining and Petrochemical (PetroRabigh) will shut down its polymer plants for 55 days from the first week of October for scheduled maintenance, a source close to the company said on Wednesday.

As well as polyethylene (PE), the plant facilities include a 700,000 tonne/year PP plant.

Several Turkish contacts made reference to the shutdown but it is not expected to impact the market in Turkey as the producer has built sufficient stock levels ahead of the turnaround, and also because of the very limited buying appetite in Turkey at the moment.

There were also fewer offers from Iran this week, with only one trader actually concluding any business with Iranian PP.

Strong domestic demand and supply issues in both propylene and PP in Iran are limiting exports out of the country, an Iranian producer said.

“We didn’t make any offer for export after Eid holidays,” and Iranian PP producer said on Thursday.

“Domestic demands in Iran has increased significantly from last week… [and] there have been some unplanned shut downs in Iran including one of our feedstock suppliers, resulting in a reduction in domestic production of propylene and polypropylene,” the producer said. It added it does not think it will be able to offer PP to Turkey until week commencing 12 October.

Players are now waiting for next week,   which will be the first full working week post-Eid to take stock of inventory levels and order books, and to assess the market situation and bids and offers for October.

Focus article by Matt Tudball. Additional reporting by Mohamad Fadhil