European LDPE, PP finds its way to Turkey as domestic prices, euro fall

12-Sep-14

European low density polyethylene and polypropylene headed east to dollar-denominated Turkish markets as a fall in domestic prices and a drop in the euro vs dollar opened the arbitrage, as per sources in Platts. European LDPE spot prices slipped by Eur30/mt (US$39/mt) on the week to Eur1250/mt, FD NWE, a six-month low, while PP prices fell to Eur1,260/mt, a low not seen since March 25, as the downward cycle in feedstock prices led to cautious domestic buyers. European sellers were aided by the weakness of the euro, assessed at a 21-month low of US$1.2908 on Wednesday, to make the arbitrage work to Turkey. Offers from Western Europe were heard at Eur1250-1310/mt CFR for LDPE, sources said. Turkish converters were also receiving plentiful supplies from the Middle East, pulling LDPE prices down by US$33/mt to US$1652/mt. This represents a six-month low. Similar fundamentals were seen in PP this week. The fall in domestic prices increased the competitiveness of European offers, pushing PP homo-injection CFR Turkey prices to their lows since April 30, closing Wednesday at US$1648/mt. The drop in the LDPE and PP prices came on the back of bearish feedstocks. Ethylene and propylene September contract prices fell by Eur55/mt and Eur55/mt to Eur1,150/mt FD NWE and Eur1,105/mt respectively, and both occurred following the recent slump in the energy market.