Sentiment weakens in Turkey’s PET market

The PET market in Turkey had begun the month of April on a firm note with commencement of the high season for the beverage sector, as per ChemOrbis. However, sentiment has shifted this month due to the constant falls in upstream costs and unsupportive demand on weaker than anticipated revival of end product markets on volatile weather conditions. Amidst calmer trading activity from the previous weeks, most PET sellers issued price reductions last week after following stable to slightly softer pricing policies. Buyers reported that they were not interested in fresh purchases despite lower import offers citing their adequate stocks and expectations of further softening in the upcoming days. Looking at upstream markets, spot PTA prices declined US$45/ton on CFR China basis on the week, and US$75/ton since the beginning of May in Asia. Similarly, spot PX offers were down by US$45/ton on FOB South Korea basis in a week and US$100/ton since early this month. Spot MEG costs recorded relatively modest drops in the periods though, with prices on CFR China basis losing US$20/ton on the week and US$40/ton since the month started. In Turkey, PET imports, including Middle Eastern and Pakistani cargoes, were offered US$50-80/ton lower with respect to the previous week. Also, the overall range for Far East Asian PET was reported US$40/ton lower on both ends. A PET bottle maker confirmed the drops, “Import prices slumped around US$30/ton under pressure from the weaker Asian PET market due to lower feedstock prices.” He added that their end product business was not bright. In the local market, distributors had already been giving discounts in response to firm bids for the last couple of weeks. In line with growing market talk about competitive prices below the generally accepted market levels, local PET prices lost US$30/ton on the high end with more players hearing levels as low as US$1700/ton.A distributor reported concluding some deals for small amounts but added that the overall trading activities were slower. “We offer US$10-20/ton lower prices to traders at around US$1730/ton. We also offered an extra US$10/ton discount to a trader, who we were in negotiations with, but he placed a counter bid at US$1690/ton for 200 tons of materials and we did not accept it,” he commented. A bottle manufacturer said that they are planning to make fresh purchases this week since they have very limited material left, but they will search for more competitive prices. Domestic PET producers also cut their prices between US$25-60/ton given disappointing demand. “Lower Asian markets, both in terms of feedstock and polymer prices, along with softer import prices are affecting the sentiment negatively as we are receiving fewer inquiries,” as per a source from a producer. “Overall demand is weak and we were not expecting it to be this slow,” he further added. According to him, not only the bottle sector, but also the textile sector has not been very strong. A total of 75,000 tons of PET imports will be exempted from safeguard measures that were approved in September 2011. After the required examinations, the total allocation was divided between companies proportionally. According to ChemOrbis Statistics, nearly 40,000 tons of this amount was already imported during the first three months of 2012. Some market players expect that the total amount may be reached by the month of June, claiming that sellers who did not import any PET resins between 2008-2010 were also able to qualify to benefit from the tariff allocation.