Türkiye’s polymer markets in flux amid bullish costs, lackluster demand

Import polymer markets witnessed firmer pricing policies on the side of suppliers in the first half of September in Türkiye. This was mainly because soaring upstream costs squeezed producers’ margins, prompting PP, PE, PVC, and PS sellers to issue monthly hikes. Yet, most of them admitted that the state of demand cushioned additional price gains for most products or even led to discounts for certain ones.

PPH market pervaded by lower bids despite supportive propylene

Offers for origins that are subject to 6.5% customs duty hovered at around $1050/ton on the high end of the homo-PP market last month. Sellers lifted their prices gradually almost every week to avoid potential margin losses considering rallying crude oil prices and their impact on propylene markets.

Nevertheless, the market started to falter into September with tepid demand coming to the fore and putting a cap on further hike targets. Several Saudi Arabian suppliers trimmed their offers, particularly on the high end of the market. “Buyers have been reluctant to evaluate any prices above the $1000/ton CIF threshold given muted end-product orders and resistance to price hikes from their customers at home or abroad,” a trader said.

Adding to the pressure has been constant cash flow issues as tight liquidity continued to keep purchases hand-to-mouth. Indeed, many players reported hearing slightly softer raffia prices at $980/ton CIF although this was not confirmed by primary sources at the time of publication.

“Ebbing consumption across the board has kept end-product orders limited both from our local customers and export markets. Unless business conditions improve, we may continue to run our factories at lower rates,” some Turkish PP converters noted.

Prices may hover mostly around their current levels in the short term, as players put it, since high production costs and the ongoing balance with China’s import PP market may hold the market. Still, sellers voiced their concerns over the lethargic resin demand for the coming term.

PVC buckles under rising prompt supply, weak outlook in Asia

Import prices have softened by $35-40/ton in total as compared to late August, with sellers succumbing to rising prompt supply and ebbing demand in September.

Duty-free K67 prices broke below the $900/ton CIF mark as sellers conceded to a new round of discounts this week. The weekly average of the market touched a 2-month low, with more sellers adjusting their prices down for European, Egyptian, and South Korean cargos.

Dutiable PVC K67 prices also posted renewed drops as demand woes outweighed the impact of bullish upstream costs. Despite a few PVC shutdowns in the US, some players voiced their concerns about a potential piling in ex-USG cargos for the coming term, pointing to ebbing demand from the key Indian market. American K67 was traded with further discounts at $820/ton CIF, subject to duties.

Players are expected to stay on the sidelines to observe the imminent news from Asia, where a major Taiwanese PVC maker is expected to issue some declines for October cargos despite supportive oil and ethylene costs.

PE still fares a tad better than other products, but demand wanes

Import PE sellers achieved their hike targets to a certain extent this month, unlike the case in the PP and PVC markets. Modest LDPE availability on the side of Middle Eastern producers, coupled with firmer prices in China, propped up the market. Moreover, a lack of competitive power on the part of the local producer, Petkim, paved the way for higher import offers.

Still, converters have not reported much improvement in downstream demand. Liquidity problems and limited consumer spending amid sticky inflation keep purchases cautious nowadays. “Cost support will keep the market firm in the near term. At the same time, the arrival of previously purchased cargos and existing stocks at some traders may keep players on edge,” a global trader opined.

According to a packager, PE prices in Türkiye will retain their strength, supported by rising prices in Europe and China. On the other hand, the local market has given a thin response to import PE hikes so far. “We keep our run rates steady these days; however, end demand has been lagging our expectations. Besides, we are coping with tough competition in export markets,” he noted.

PS increases also face mounting resistance

Styrenics markets witnessed a new round of PS increases from South Korea as sellers reflected surging styrene costs onto their resin prices in September. Spot styrene prices on FOB Korea basis have been steadily rising for 10 weeks now, while the market has hit its highest level since late January this year.

Following suit, European PS makers approached the market with triple-digit hikes, counting on notably higher styrene contracts in the region for the month. Yet, initial announcements met stiff resistance of Turkish consumers.

A seller affirmed sluggish demand while attributing this to the expected arrival of distant Asian cargos that were secured two months ago. He added, “The recent correction in spot styrene prices in Europe caused us to take a cautious approach for the October outlook. We preferred to reflect only a part of the hike in styrene contracts as the market may not absorb any further PS increases moving into Q4, not to mention financial challenges that pervade the industry.”

Spot styrene prices in Europe spiked to surpass the $1650/ton FOB NWE threshold in H2 August, driven by plant hiccups in the region, before recently coming down to slightly below $1300/ton amid downward corrections. Players will gauge whether a slew of styrene units will return from turnarounds as planned for the second half of this month.