Lower bids drag import PP, PE down before Eid al-Fitr in Türkiye

Polyolefin prices moved south this week as more suppliers revealed their fresh April offers and received lower bids from their regular customers. Middle Eastern PP raffia touched a new low on deals, while LLDPE and HDPE film traded lower, succumbing to limited demand ahead of a 9-day holiday. Soaring oil prices had little to no impact on the sentiment, as demand woes took center stage.

Rollover targets fail despite supportive costs

Late last week, some regular suppliers signaled that they would test the market with stable prices given their high costs. However, mounting consumer resistance caused sellers to trim their earlier goals and a few deals were reported with monthly decreases, let alone the impact of relatively lower shipping costs.

PPH prices hit almost a 3-month low

Indeed, lower buy ideas pushed Middle Eastern PP raffia prices to $1100/ton CIF, subject to 6.5% customs duty on the low end, while PP fibre was down to $1150/ton with the same terms. Still, long lead times from the region kept purchasing amounts hand to mouth. Adding to the pressure were liquidity issues which persisted after the local election last Sunday.

According to the weekly average data from ChemOrbis, Saudi Arabian PP raffia prices hit their lowest levels since H1 January. Lethargic demand in downstream segments coupled with the holiday lull outweighed high upstream chain and limited prompt availability.

Supply pressure still intact for HDPE film

Most Middle Eastern producers approached the market with lower April offers, bearing in mind that April is a short month in terms of working days due to the Eid al-Fitr holiday. A source from a regional PE seller affirmed, “We better complete our monthly business until this Friday before players leave their desks for a long break.”

Although a Saudi Arabian major initially sought rollovers from last March levels, buyers’ weak appetite caused the producer to step back. Overall, LLDPE C4 film and HDPE film transactions moved down to around $1080-1090/ton CIF in response to serious counter bids.

“Ample Iranian supply pushed HDPE film to fresh lows this week. The locally-held market broke below the $1400/ton inc. VAT threshold, while import offers hit $1060/ton CIF on the low end,” multiple distributors reported.

Türkiye’s premium over China narrows in early April

At the time of writing, ChemOrbis data suggested that the premium of Saudi Arabian PP raffia prices on CIF Türkiye basis over China was down to around $200/ton this week as compared to almost $300/ton in mid-February. LDPE’s premium was down from $125/ton to $115/ton. Delta for LLDPE was down to $135/ton from $180/ton while HDPE’s premium narrowed to $115/ton from $170/ton.

In the meantime, the recent discounts were driven mainly by a lack of healthy demand, with several manufacturers being set to shut their factories for holidays next week. With Brent oil futures ticking up closer to the $90/bbl mark on tight supply outlook and sellers’ margins narrowing, price cuts may be limited to modest amounts. This is particularly if activity improves after the Eid al-Fitr break.