Middle Eastern major raises PP prices to Turkey

In Turkey, a trader reported receiving new PP offers for raffia and fibre grade from a major Middle Eastern producer with increases of $40-90/ton over October.

The trader received new offers for raffia grade at $1190/ton and fibre grade at $1220/ton CPT Gaziantep, Turkey, subject to 6.5% duty, cash. 

Offers from the producer fluctuated in October as higher offers were initially reported at the start of the month at $1160/ton for raffia and $1180/ton for fibre grade. However, as the Chinese market enjoyed a holiday from October 1-8, prices came down by mid-month. 

In the middle of October, the same trader had received offers from the producer at $1110/ton for raffia and at $1130/ton for fibre grade.  This indicates that the new offers have increased $80-90/ton when compared to the middle of the month. Meanwhile, a buyer reported today that they were offered raffia from the same producer at $1170/ton, which is up $70/ton from an offer they received two weeks earlier.

Last week, however, a higher offer was already reported for fibre grade at $1170-1180/ton, which followed after Turkish producer Petkim's price hike of $20/ton on October 19th. This shows the trader received a $40/ton increase from the producer on a week over week basis.   

In the Egyptian market, the same producer lowered prices for November to a level of $1180/ton CIF Egypt, 90 days deferred payment for raffia and injection grades, bringing prices in line with the Turkish level.  The Egyptian market is now seeing a decrease to bring prices in balance because unlike other markets, PP prices had been raised in October in that country on the back of decent demand.

An increase had been expected on non-European PP import prices to Turkey for the short term according to Turkey PP Polymer Digest due to the rally in the Chinese market which has been in place since the end of the national holiday in that country. Chinese converters had purchased very little ahead of the holiday and needed to buy material upon returning. This rally combined with the fact that higher propylene costs in the region raised the theoretical levels to Turkey led to the increase expectation. The rally in China is considered fragile since new capacities inside the country and in the Middle East are expected to more than compensate for demand, however, the fragile conditions have been supported by a significant rise in energy costs, allowing the rally to continue.