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Turkey’s PE market on brink of new drops for December

by Merve Madakbaşı -
  • 18/11/2022 (07:53)
PE prices have reversed direction following a short-lived upturn in October given ebbing demand from derivative markets. What clouded the outlook has been globally thin demand with the year-end lull and competitive US cargos looming over the markets.

CIF Turkey – Import Middle Eastern Prices – LDPE – LLDPE – HDPE

Middle Eastern PE offers erase Oct gains

According to the weekly average data from ChemOrbis, Middle Eastern PE offers were down by 3-5% ($35-55) as compared to last October levels. Indeed, regional suppliers approached the market with rollovers to small hikes at the beginning of November. Yet, it did not take long for them to trim their initial levels in response to waning demand.

Most sellers confirmed that PE still fared better than PP and PVC during the first half of November. Downstream segments performed slowly for all products, while some plant shutdowns and rate cuts underpinned PE to some extent, not to mention modest supply for a few PE grades.

US cargos see additional drops for Jan cargos

Import Middle Eastern PE prices were assessed $10/ton lower week over week. Accordingly, notional levels stood at $1170-1200/ton for LDPE, $1080-1110/ton for LLDPE and $1080-1110/ton for HDPE film, CIF Turkey, subject to 6.5% duty.

Consumers believe that regional suppliers will need to approach the market with new drops next month in response to more competitive American cargos for later shipments and unpromising buying interest.

US PE levels were assessed $30-50/ton lower from last week at $1130-1160/ton for LDPE and $1000-1040/ton for LLDPE C4 film, HDPE film, b/m and inj. all on CIF, subject to a 6.5% duty. Some players also reported hearing offers below the $1000/ton CIF mark for certain LLDPE and HDPE grades, although this figure was not confirmed by primary sources at the time of publication.

LDPE under more visible pressure on local stocks

The local PE markets receded further by $20-30/ton on the week, while adequate stocks on the side of the local producer, Petkim, led to more visible pressure on the prompt LDPE market.

"Although HDPE and LLDPE stocks are not that high inside, buyers already have some CIF cargos on the way, which keep appetites scant. LDPE seems to be under greater pressure as Petkim has resumed operations and supply is comfortable," admitted a distributor.

Sentiment unfazed by a cautious recovery in China

In China, firmer Dalian futures and the government’s decision to loosen some of its Covid-19 measures spurred a cautious improvement in sentiment. Nonetheless, the slight recovery has yet to find a reflection on price levels or demand, with some players interpreting the recent stability as a respite from price cuts.

Turkish PE players hold weak expectations for December, citing an unpromising demand outlook, players’ willingness to minimize their stocks ahead of the new year and a lack of supply concerns. The widening delta at around $200/ton with China’s import PE market supports projections of new drops, considering lower freight rates.

Players have been skeptical about the sustainability of the recent recovery in China, as a Turkish seller said, "We witnessed several short-lived recoveries in the recent past. This might be one of them. According to buyers, the recession fears surrounding commodity markets will continue to outweigh any rate cuts or temporary upticks through Q4. They do not rule out the possibility of continued depleting activity by US and Russian sellers in the coming days.

Players on hold prior to industrial events in Turkey

Turkey is set to house two big industrial events next week. Global plastics players will gather at the 31st edition of Plast Eurasia Istanbul Fair, while Growtech will welcome global agriculture players in Antalya for the 21st time. Both events will be held on November 23-26, 2022.

Some players expect to hear additional discounts from PE sellers during Plast Eurasia while some others think fresh December offers may surface in the aftermath of the event once suppliers set their next allocations. A trader said, “Most buyers preserved their waiting stance this week as they plan to gauge the trajectory during the industrial gatherings or push for lower resin prices.”
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