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 against the dollar opened the arbitrage, sources said this week. European low density polyethylene spot prices slipped by Eur30/mt ($39/mt) on the week to Eur1,250/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 $1.2908 Wednesday, to make the arbitrage work to Turkey, sources said.
Offers from Western Europe were heard at Eur1,250-1,310/mt CFR for LDPE, sources said. Turkish converters were also receiving plentiful supplies from the Middle East, pulling LDPE prices down by $33/mt to $1,652/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 lowes since April 30, closing Wednesday at $1,648/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.
– Platts.com
