Spot polyethylene and polypropylene prices in Turkey were firmer this week as buying appetite picked up ahead of the increased duties that will take effect next month, sources said.
From January 1, import duties for high density polyethylene and polypropylene will rise to 6.5% from 4.8%. This is the second part of the two-stage hike the Turkish government announced in September, when duties were immediately raised from 3% to 4.8%.
The new duties were imposed on imports coming from developing countries and the Gulf Cooperation Council, which groups together Saudi Arabia, the UAE, Qatar, Oman, Kuwait and Bahrain. Saudi Arabia has consistently been Turkey's biggest source of imported polymers, contributing half of the country's overall imports for many grades.
One trader said demand so far in December has been "far better" than October and November, mainly due to expectation of increased prices in January.
"People want to get materials as soon as possible," another trader said.
The rebound in the European and Asian spot markets also helped shore up sentiment in Turkey, and this supported a widely held belief that the domestic market has reached the bottom of the cycle, sources said.
Most sources, however, felt buying remained short term, with most business for polypropylene heard done at $1,470-1,490/mt CFR Istanbul subject to duty. "Some trucks [polypropylene] were heard offered at around $1,510-1,520/mt," a trader said, noting that buying activity was " mainly speculative."
"Underlying demand is still weak," he said, adding that the market could quiet down again as it approaches the year-end holidays.
HDPE prices were heard at $1,460-1,520/mt CFR Istanbul, subject to duty. "Converters want their product from Middle East to clear customs before January 1 to save on taxes," a trader said.
Turkish producer Petkim increased list prices this week by $20/mt for PP and HDPE film to $1,665-1,675/mt FCA Aliaga and $1,740/mt respectively.
