LONDON (ICIS)–The Turkish polyethylene (PE) market has mostly stabilised this week, but worsening economic conditions in the country are souring sentiment among players.
Polypropylene (PP) was mixed, with raffia mostly static but fibre experiencing further falls.
The Turkish lira continues to lose value against the US dollar and the euro, while developing tensions between the US and Russia as a result of the latter’s support for the Syrian government, are also adding to a general feeling of uncertainty.
Turkey is likely to feel any repercussions of military action in Syria, after having already absorbed large numbers of asylum seekers fleeing war in the country. Turkish military operations took place in Syria earlier this year.
PP future prices in China have rebounded, meaning that some buyers are wary of a mirrored effect in Turkey, if suppliers look to move their allocations to Asia.
Chinese PE prices posted similar buoyant trading earlier this month.
Players are holding their ground and observing how prices develop.
Fibre prices continue to fall in part due to the price gap between it and raffia.
Iranian offers remain limited as suppliers based there struggle with their current lack of foreign currency, and no new offers are expected out of Iran until next month since many producers are still building stocks following the Nowruz holiday period.
Domestic low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) prices have eroded by $20-30/tonne in terms of workable prices.
Local producer Petkim has maintained its list prices as it is working from limited stocks, but traders are forced to offer more competitive deals to secure sales.
Players are uncertain of price direction for the coming weeks.
Turkey is now well supplied on all grades but demand is difficult to predict and the wider political climate is damaging business levels.
Many of Turkey’s direct neighbours are suffering economic problems, such as the lack of foreign currency in Iran, limiting potential trade activities.
The end user market in Turkey has also suffered from the wider economic conditions.
Buyers are unlikely to act unless they are confident of price direction, which may take time to develop.
The conflicting conditions leave little clarity to future price direction, and buyers are therefore choosing to stay away from the market and allow a price direction to develop.
Similar to the Chinese market, some players believe prices to have now bottomed out.
One player said that is has been fielding more inquiries about PP this week, adding it expected demand to pick up as it became apparent that sellers were moving allocations to Asia.
Pictured: The UN Security Council voting on a resolution on Syria, 10 April
Source: Xinhua New Agency/REX/Shutterstock
Focus article by Ben Lake