As Turkish currency turmoil persist, first diverted homo-PP cargoes emerged in China

The Turkish Lira has depreciated more than 40 per cent against the US dollar this year as a result of escalated political and trade tension. Such development was expected to hamper demand for imports, as it is significantly more expensive to purchase in US dollar now.

Market is still trying to search for direction since this currency crisis does not seem to be settled anytime so soon, sources said. Some are expecting business as usual given the fact that Turkey is heavily depending on import for most of its polyolefins needs. In fact, in 2017, Turkey imported 2.13 millions tons of PP, accounted for 95% of the annual consumption while 1.67 million tons of PE imports was 80% of the domestic consumption.

In the meantime, others started feeling the pinch, which encouraged the diversion of shipment route to China – where interest is slightly better. There is no surprise! Chinese buyers have been waiting to see when and to what extent overseas suppliers would divert materials to Asia ever since Turkey market encountered its current issue. 

Saudi Arabia homo-PP cargoes, which sources claimed having more than 1000 tons in quantity, have been concluded in China at $1200/ton CFR, LC AS. The cargoes were initially en-routed to Turkey.

“This a good brand name and prices are lower than direct offers from Saudi. We managed to procure some quantity,” a buyer reported. 

Second-tier buyers reported purchasing this material at $10/ton higher - $1210/ton CFR China with a source added, “This could be just the beginning. Demand in Turkey might need time to overcome the situation and if the government tighten monetary policy, it could become more difficult for businesses there.”