European offers could boost Turkey’s PP market in April

31-Mar-10
For the past couple of months, European PP imports have been a competitive force in the Turkish market, as producers siphoned off excess supplies to its neighbor because of an imbalance caused by poor demand since the start of the year, as per Chemorbis. However, April is set to reverse the trend with European offers potentially supporting a premium on non-European offers to Turkey. In March, European PP raffia prices were reported in a range of €1050-1090/ton and fibre at €1080-1125/ton CFR/CPT Turkey, cash. Considering the €70/ton increase in April propylene contracts, higher offers for next month are expected. These elevated levels would in turn support non-European offers to Turkey which currently are at a premium when considering prices to China. The current level for homo-PP in China at US$1260-1320/ton CFR basis would suggest a theoretical level in Turkey at US$1300-1360/ton for Middle Eastern and Indian producers considering the netback from China. Currently non-European offers to Turkey are at US$1375-1440/ton CFR basis, cash. Potential European offers discussed above would support the current dutiable offers despite the current premium they carry in Turkey. Indeed they could theoretically give a boost to prices if it were not for the slow demand in Turkey, Asia and Europe which is combined with new capacities.
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