Türkiye’s PP, PE markets on hold ahead of Sept offers
by Merve Madakbaşı - mmadakbasi@chemorbis.com
Polyolefin markets remained weak throughout August due to persistently subdued demand, resulting in modest discounts on deals. However, lingering logistical hurdles prevented deeper price cuts, with market participants now focusing on September announcements. The outlook hinges on a delicate balance amid supply chain dynamics, global trends, and downstream demand in Türkiye. Meanwhile, most guidelines appeared to be postponed until after the national holiday on Friday.
Market quiet prior to a national holiday
Most sellers delayed their price announcements until next week while waiting for guidelines from their suppliers. Both suppliers and buyers elected to stick to the sidelines to monitor global resin and upstream markets, as well as mixed freight rate trends, leading to thin price discussions.
A PP converter believes that prices will not see major changes next month if exports to Europe increase and shipping costs stay close to their current highs. “Sellers did not seem willing to offer large discounts due to high costs, while downstream demand will likely dictate the market’s direction. We might see additional, albeit small, price drops in deals,” he added.
A shopping bag maker mentioned that some traders noted improved demand in Europe, which could keep PE prices in Türkiye stable moving forward. “HDPE film is still under pressure from stiff competition in both resin and derivative markets, and prices might have room to decline further. We hope to see an uptick in demand once schools reopen,’ he added.
An LDPE converter expressed a $40/ton lower buy idea at $1170/ton CIF for Middle Eastern cargoes, stating, “Prices should decrease in line with the August drops in Asian LDPE markets. These cargoes are considered risky due to delayed deliveries caused by issues in the Red Sea, which may keep demand hesitant for import volumes.”
PPH prices ease 2%, PE edges down by 1% in Aug
According to the weekly average data from ChemOrbis, homo-PP raffia and fibre prices from Saudi Arabia softened by only around 2% or $20/ton during August as import flow stayed restricted due to lengthy transit times from the region.
The primary driver behind the discounts was the relatively weak demand compared to June and July, as downstream activity fell short of seasonal expectations and financial challenges dampened buying enthusiasm.
Overall import volumes remained modest, particularly for PP, while LDPE General Purpose grade supplies were also limited for another month. However, these limitations had a diminishing effect as the month progressed, since a lack of consumer bids overshadowed initial rollover attempts and pressured the upper end of market ranges. A planned turnaround at an Uzbek HDPE plant may balance supply and underpin b/m grade if not film, some players put it.
Lower prices in Asia help Türkiye widen its premium
Polyolefin prices in China and Southeast Asia were mostly on a bearish trend throughout the month due to increasing supply, cautious activity, and volatile crude oil futures. This allowed Türkiye to widen its premium over China to around $140/ton for PE grades, while the PPH delta remained quite high at approximately $250/ton.
The rising trend came to a halt as netbacks improved and demand for resin slowed further amid severe cash constraints. ’We do not expect activity to revive for PP and PE much in the near term, even though sellers are hopeful about Europe’s return from holidays and seasonal factors in China,” a manufacturer opined. On the other hand, traders expect USD-based cargos to see better demand post-holiday in Europe owing to the higher €/USD parity.
Eyes locked on global indications for new month
The upcoming demand trajectory in Europe and Asia will be a key factor to watch for Turkish players into September. This is because several players count on a potential demand revival in Europe following the long summer break, with new monomer contracts pending at the time of writing.
On the other hand, it remains to be seen whether activity in China will pick up underpinned by the Golden September-Silver October season and dwindling domestic inventories, with economic headwinds remaining intact. Additionally, demand from India will be under close watch amid the nearing end of monsoon rains.
The upstream side offer a mixed bag, with global oil benchmarks fluctuating between global demand concerns and the Middle Eastern tension over the week. As a side note, players will gauge the shipping industry with the ongoing drops in container prices on most routes, except for Asia-US, for which a potential strike at US East Coast ports in October has pushed freight rates north.
Market quiet prior to a national holiday
Most sellers delayed their price announcements until next week while waiting for guidelines from their suppliers. Both suppliers and buyers elected to stick to the sidelines to monitor global resin and upstream markets, as well as mixed freight rate trends, leading to thin price discussions.
A PP converter believes that prices will not see major changes next month if exports to Europe increase and shipping costs stay close to their current highs. “Sellers did not seem willing to offer large discounts due to high costs, while downstream demand will likely dictate the market’s direction. We might see additional, albeit small, price drops in deals,” he added.
A shopping bag maker mentioned that some traders noted improved demand in Europe, which could keep PE prices in Türkiye stable moving forward. “HDPE film is still under pressure from stiff competition in both resin and derivative markets, and prices might have room to decline further. We hope to see an uptick in demand once schools reopen,’ he added.
An LDPE converter expressed a $40/ton lower buy idea at $1170/ton CIF for Middle Eastern cargoes, stating, “Prices should decrease in line with the August drops in Asian LDPE markets. These cargoes are considered risky due to delayed deliveries caused by issues in the Red Sea, which may keep demand hesitant for import volumes.”
PPH prices ease 2%, PE edges down by 1% in Aug
According to the weekly average data from ChemOrbis, homo-PP raffia and fibre prices from Saudi Arabia softened by only around 2% or $20/ton during August as import flow stayed restricted due to lengthy transit times from the region.
The primary driver behind the discounts was the relatively weak demand compared to June and July, as downstream activity fell short of seasonal expectations and financial challenges dampened buying enthusiasm.
Overall import volumes remained modest, particularly for PP, while LDPE General Purpose grade supplies were also limited for another month. However, these limitations had a diminishing effect as the month progressed, since a lack of consumer bids overshadowed initial rollover attempts and pressured the upper end of market ranges. A planned turnaround at an Uzbek HDPE plant may balance supply and underpin b/m grade if not film, some players put it.
Lower prices in Asia help Türkiye widen its premium
Polyolefin prices in China and Southeast Asia were mostly on a bearish trend throughout the month due to increasing supply, cautious activity, and volatile crude oil futures. This allowed Türkiye to widen its premium over China to around $140/ton for PE grades, while the PPH delta remained quite high at approximately $250/ton.
The rising trend came to a halt as netbacks improved and demand for resin slowed further amid severe cash constraints. ’We do not expect activity to revive for PP and PE much in the near term, even though sellers are hopeful about Europe’s return from holidays and seasonal factors in China,” a manufacturer opined. On the other hand, traders expect USD-based cargos to see better demand post-holiday in Europe owing to the higher €/USD parity.
Eyes locked on global indications for new month
The upcoming demand trajectory in Europe and Asia will be a key factor to watch for Turkish players into September. This is because several players count on a potential demand revival in Europe following the long summer break, with new monomer contracts pending at the time of writing.
On the other hand, it remains to be seen whether activity in China will pick up underpinned by the Golden September-Silver October season and dwindling domestic inventories, with economic headwinds remaining intact. Additionally, demand from India will be under close watch amid the nearing end of monsoon rains.
The upstream side offer a mixed bag, with global oil benchmarks fluctuating between global demand concerns and the Middle Eastern tension over the week. As a side note, players will gauge the shipping industry with the ongoing drops in container prices on most routes, except for Asia-US, for which a potential strike at US East Coast ports in October has pushed freight rates north.
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