LDPE sees notable drops due to ebbing demand, easing supply in Türkiye

Türkiye’s PE markets opened September on a stable note, with most regular suppliers issuing rollovers. However, fading hopes for a revival in European demand, easing container freight rates, and tepid demand from Turkish buyers led to modest discounts on deals. Meanwhile, LDPE turned relatively bearish this week, facing more noticeable drops compared to LLDPE and HDPE film.

Petkim’s downward adjustment pioneers LDPE decreases

LDPE was more resilient than other PE film grades throughout the third quarter of this year, primarily due to supply constraints that boosted demand. Long lead times from the Middle East, unfavorable netbacks, and some production hiccups led to tighter availability, particularly for general-purpose grades.

Nonetheless, trading activity slowed down from mid-August, coinciding with the arrival of previously purchased LDPE cargos. Additionally, squeezed liquidity and weak downstream demand dampened buying appetite. This contributed to a further easing of supply in September, with LDPE film stocks accumulating more visibly after some time.

In response to subdued demand, the local producer Petkim lowered its prices by around $20-30/ton at the beginning of the week, buyers confirmed. This marked a shift from the company’s long-standing policy of steady pricing and immediately triggered discounts from traders.

Overall, the local LDPE film range plunged by $60/ton from last week to be assessed at $1620-1670/ton ex-warehouse Türkiye, cash inc. VAT.

Falling European offers heat up competition

The higher €/USD parity has been reducing the competitiveness of European LDPE cargos since last month, leading to waning interest in these nearby shipments. Initial LDPE film offers from the region emerged at €1200/ton ($1335/ton) CIF Türkiye, cash no duty, which was $30-50/ton higher than dutiable Middle Eastern offers at the time.

This week, European LDPE film prices were revised down to €1150-1170/ton ($1279-1302/ton) under the same terms, but they still failed to attract much interest from buyers. The lower prices reflected the eagerness of regional suppliers to boost exports amid disappointing post-holiday demand in the bloc.



Middle Eastern prices break below the $1200 CIF mark

In early September, some offers from the region surfaced with rollovers at $1220-1230/ton CIF, subject to 6.5% customs duty. Sources from producers said, “We managed to sell some volumes that will arrive soon. Apart from that, overall demand has not been bright for another month.”

Some other suppliers approached the market with lower prices at $1180/ton with the same terms into the second half of September to stimulate demand. “We even heard $1160-1170/ton CIF but did not confirm,” a buyer noted. As per the weekly average data from ChemOrbis, Middle Eastern LDPE prices last stood below the $1200/ton threshold in late June.

LDPE-LLDPE delta remains at a 3-month high

Regarding October, early expectations for PE call for a weak trend based on unpromising demand. Players point to the imminent year-end lull while the recent gains in oil futures and China’s PE markets have been overshadowed by macroeconomic issues at home and poor demand across Europe.

Meanwhile, LDPE’s premium over LLDPE narrowed from $160/ton to $130/ton following the recent corrections in the first one. Yet, it still indicated the largest gap in three months and buyers think LDPE will need to see additional drops in the coming term. A packager said, “LLDPE may hit $1030/ton CIF next month amid sufficient supply and thin demand. This is bearing in mind that US sellers may provide competitive offers at the end of the year. In such a scenario, LDPE has further room to come down given its huge premium.”

Middle Eastern ranges were assessed lower week over week at $1180-1200/ton for LDPE and $1030-1050/ton for HDPE, both CIF, subject to 6.5% duty basis. LLDPE C4 film remained at $1050-1070/ton with the same terms.