PP players in Mediterranean expect firmer Nov prices from Middle East

20-Oct-10

The import PP markets in Turkey and Egypt, where Middle Eastern producers are the main supply sources, have been witnessing firmer sentiments recently, as per Chemorbis. Following the recent upsurge in Asian PP markets, players in Turkey and Egypt, are now predicting that import prices from that region will be revealed with increases next month. In Turkey, regional producers, who had initially revealed their prices with small increases of US$10-20/ton stepped back from their initial prices and concluded October deals mainly at rollovers over the first half of October. Players have been reporting a limited number of supply sources from the region for some time, with the market seeing almost no import offers from the Middle East this week. Currently, Turkish players are waiting for November price announcements from regular suppliers, with expectations of firmer prices given the recent upward rally seen in Asia’s PP markets. In Egypt, Middle Eastern producers have maintained their initial price levels after revealing their October prices with rollovers to slight increases of US$10/ton at the start of the month. Egyptian players also believe that new prices for November will come at higher levels in line with rising import offers to China and Southeast Asia, plus the relative strength in the upstream markets. “Some traders will raise their offers in line with the increasing trend in the global markets, especially since new offers are awaited to be announced with increases,” a trader commented this week. “Distributors are hoping for higher prices because they might improve the market activity especially since they are selling material below their costs now due to poor demand,” he added. While import sellers have yet to announce their November offer levels to the Mediterranean markets, significant increases were already announced to China and Southeast Asia for next month, with many overseas producers revealing their November prices US$40-80/ton higher to these regions, reflecting the significant upward movement in crude oil and naphtha prices which occurred in the first week of October. However, import PP prices in China began to stabilize this week given persisting resistance from buyers, as well as the fluctuating crude oil prices and the recent slippage observed in naphtha costs in Asia.