Price and market trends: Polymer producers in Turkish market target higher June prices

13 June 2014 10:43 Source:ICIS Chemical Business

Higher feedstock prices rather than improved demand are said to be driving the market

Producers supplying the Turkish polymers market are pushing for higher prices in June, though may encounter resistance from buyers which have differing views on demand levels, amid competitive prices from other suppliers, sources said on 3 June.

Turkish producer Petkim increased prices for both fibre and raffia polypropylene (PP) by $20/tonne, high density polyethylene (HDPE) by $20/tonne, and low density polyethylene (LDPE) by $15/tonne, according to sources in the Turkish market. Petkim did not respond to a request for comment.

A trader the previous week said the increases were attributed to higher feedstock costs rather than an improvement in demand.

Other producers are looking for higher prices in the PP fibre market, with one Middle East producer offering price levels of $1,660/tonne CFR (cost & freight) Turkey as of 3 June.

“Prices and demand in… Turkey are stable – we have seen some marginal increases [in price],” the producer said.

However, it is not yet clear if deals are being done at these new higher levels, as views on demand differ within the Turkish market, with most expecting demand levels to soften in the lead-up to Ramadan at the end of June.

“$1,660/tonne is not realistic [for fibre grade],” a trader said, adding that it had heard done deals at levels of $1,630/tonne CFR Turkey, but nothing above that to date.

“Now [suppliers] are trying [to increase] their prices in the market, but I’m sure once they see resistance from customers, and [with] the approach of Ramadan, I also expect a downward trend [in prices],” the trader added.

Talk of increased Iranian material entering the Turkish market may cause some buyers to hold off purchasing at higher rates offered by Middle Eastern suppliers, preferring to wait for lower offers of trucked cargoes from Iran.

At the end of last week, Iranian fibre grade PP was being offered at $1,640/tonne CPT (carriage paid to) Turkey.

As well as Iranian material, some Middle Eastern producers may face competition from other suppliers which are now sending material to Turkey, rather than China.

“For Middle Eastern producers… Chinese netbacks were good last month, but now [they are] dropping off,” a trader based in Turkey said.

PP import prices into China for raffia have been dropping in recent weeks because of lower domestic prices in the Chinese market.

Middle Eastern raffia producers are under pressure from cheaper Russian and Indian material being offered to Turkey.

Russian raffia prices were heard offered at $1,580/tonne CIF (cost, insurance & freight), subject to 6.5% import duty.

Indian material is being offered at $1,610-1,630/tonne CIF, subject to 3% import duty, for end of June or early July delivery.

By Matt Tudball