Gap between LDPE prices in Europe and Turkey lowest in 2 years
Source: ChemOrbis Price Wizard
In Europe, price increases were driven mainly by higher feedstock costs triggered by limited monomer availability due to shutdowns as well as limited imports while LDPE increases in Turkey stem from reduced supplies from the Middle East.
March offers came well above the ethylene contract hikes in Europe, given the tightness of LDPE and LLDPE supplies in particular. A distributor from the Netherlands reported, “Our supplier looks for increases of up to €80-100/ton for LDPE due to his limited volumes; however, his hike targets might come down in the next weeks depending on demand.” Furthermore, buyers are not in a hurry to buy right now due to their pre-buying activities in the December-February period. However, market fundamentals are expected to remain tight for another month.
Now that Turkey’s LDPE market is almost matching the local market level in Europe and climbed back over China by more than $120/ton, many players in Turkey opine that the current levels are inflated and not supported by demand.
If the current trend in Turkey is retained, Middle Eastern producers are expected to raise their allocations to Turkey, which may also ease the long-lasting tightness.
Meanwhile, Southeast Asia’s PE market, where supply concerns were also widely reported, has already felt downward pressure from China in the past two weeks. Players are now questioning the sustainability of the firming trend in Turkey’s PE market particularly after it has come to par with Europe amid frail demand, an expected improvement in supplies from the Middle East, weaker upstream costs and the downturn in Asia.
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