Limited availability ahead of Iran’s New Year holidays is helping balance subdued domestic demand
The Turkish polyethylene (PE) and polypropylene (PP) markets are feeling the effect of limited buying and trading activity ahead of regional elections in the country on March 30, sources said on 18 March.
“[The markets are] mostly stable… there is a lack of materials in the markets but prices are not booming. Everybody is waiting for direction following elections,” a trader said.
“I am in vacation mode,” said a second trader, because it saw very little business that week.
Demand across most PE and PP grades is soft because of a general economic downturn seen in Turkey since the end of 2013.
The Turkish lira remains weak against the dollar, dampening buying interest in finished goods, and many factories producing consumer goods have had to reduce operating rates to 50% or below due to lack of demand.
For most of March, players have been talking of a slow market ahead of the elections, after which people in the country hope there may be signs of economic stability returning to the country. Whether or not economic stability will lead to improved PE and PP demand remains to be seen.
Compounding the sluggish sentiment in the Turkish market is the beginning of the Iranian new year holiday of Nowruz on 21 March.
“Iranian offers are limited,” a second trader said. It added the holiday “will soon cease the sales activities for two to three weeks from 21 March”.
The lack of materials in markets such as linear low density polyethylene (LLDPE) together with weak demand is having a more balancing effect, with limited availability being able to serve reduced demand.
Similarly, fibre grade PP is looking healthier than raffia, though prices are stable. The lack of Iranian material entering Turkey is having a balancing effect on the LLDPE market, a trader said.
On the supplier side, some are looking ahead to April and do not expect to see a pick-up in demand happen straight away.
“Our expectation – April will be slower than March,” a PP producer said.
“I don’t think in April [demand] will increase too much. Turkey is linked to Europe, and last year after March [European demand] slowed,” it added.