Turkey seeing HDPE imports from US, Uzbekistan

Focus article by Matt Tudball

LONDON (ICIS)–High density polyethylene (HDPE) material from both the US and Uzbekistan is being increasingly offered into the Turkish market at lower prices from larger, more established suppliers, sources said this week.

On Thursday, sources in Turkey said US HDPE was offered at $1,000-1,020/tonne CFR (cost and freight) Turkey for film, injection moulding and blow moulding grades.

One trader said deals had been done at prices as low as $1,000/tonne CFR Turkey, though this could not be confirmed at the time of writing. US imports are subject to a 6.5% import duty.

Uzbekistan HDPE film material was offered at $1,050-1,070/tonne CFR Turkey, and blow moulding was offered at $1,080/tonne CFR Turkey, subject to 3% import duty.

These prices were lower than deals, bids and offers heard for Middle Eastern HDPE film, which were in the market at $1,020-1,050/tonne CFR Turkey, sources said.

American cargoes have been offered to Turkey for the last few months, and have consistently been lower than offers from the Middle East. US material is offered via traders who bag the product at ports in America and ship it to Turkey. Due to the bagging process, the delivery time can be up to 40 days, according to players in the market.

Despite the long lead time, buyers in Turkey are being attracted by the lower prices of the US material, with some believing the lower offers may be a way of traders trying to establish a foothold for American material in the Turkish market.

US domestic PE production capacity is expected to reach 9.2m tonne/year by the end of 2018 so this may just be the beginning of regular volumes of American material being sent to Turkey.

Similarly, in recent weeks Turkey has seen a number of traders offering Uzbekistan HDPE grades believed to be from the Ustyurt Gas Chemical Complex (UGCC), a joint venture between Uzbekistan state-run firm Uzbekneftegas and a South Korean consortium comprising of Lotte Chemical, Korea Gas Corporation and GS E&R.

This material holds the advantage of shorter delivery times as well as a lower import duty rate over the American cargoes. Cargoes are being shipped across the Black Sea via the Russian port of Novorossiysk, or trucked, possibly via Iran. A Turkish trader said the average delivery time via truck would be approximately 10 days, though did not know the lead time for shipped cargoes.

Traders in Turkey said the companies bringing this new Uzbek cargo into Turkey are working under contracts with a set volume of material needing to be delivered each month. Due to the currently weak demand for both PE and polypropylene (PP) in Turkey, the lower prices being offered may be simply a case of traders needing to shift volumes rather than trying to undercut established suppliers.