Türkiye’s recycled markets see divergent expectations for January 

Prices in Türkiye’s recycled markets continued to soften for another month in December. Prices are set to close Q4 on a weak tone as the year-end lull took hold of the market. Yet, the bear run lost steam this past month, with poor margins suggesting the markets were nearing the bottom. Although expectations diverge for both R-PP and R-PE, the R-PET markets have shown signs of stability. Currently, market participants have shifted their focus to January while handling their book closures and stocktaking.

Downtrend loses momentum for R-PET as 2024 wraps up  

After experiencing sharper declines over the past two months than other grades, R-PET Flakes prices witnessed relatively modest drops in December. Sellers continued to lament unpromising demand amid ongoing cash constraints, the challenging domestic economy and year-end lull. Moreover, the softening trend in virgin PET bottle markets weighed on sellers. However, razor thin margins and stabilizing bale prices caused price drops to lose their pace.

Some sellers reported that a few buyers concluded their transactions at lower levels depending on the quality while other sellers preferred to keep their offers flat due to low margins. "The market followed a stable trend with slight discounts on deals. There was no support from the virgin market and activities remained sluggish before the new year,” opined a market source.

Looking ahead, whether demand will revive or not will be pivotal considering a traditional early year rebound expected in several commodity markets. Sellers will probably run their facilities at reduced rates so long as activity stays muted, which will be a supporting factor for the market in January.

Will firmer sentiment for virgin PP, PE rub off on recycled markets?  

Sentiment for virgin PP rebounded earlier than PE as suppliers started taking a firmer stance, especially on the lower end of the overall market ranges, by mid-December. Easing their sales pressure before the new year, suppliers have already adopted a firmer approach for PP, while PE is expected to follow suit soon.

Although recycled offers recorded modest drops from November levels, potential hikes in virgin prices will probably find a reflection on the recycled market, as sellers hope. “Our expectations for January are mainly stable as demand is not likely to improve soon. Yet, we have not ruled out the possibility of small upward adjustments depending on the trajectory in the virgin market,” said a market source.

What lies ahead for Q1?  

Recycling markets seem to have bottomed out in December. However, January expectations called for mixed trends depending on the product, due to opposite factors. Financial challenges remain intact at home which may keep purchases tied to needs amid the low season. On the other hand, sellers need to recoup margin losses and whether exports will recover after the Christmas holidays may also shape the January trend.

While some sellers believe R-PP and R-PE prices may witness a modest upturn following relentless drops throughout Q4 2024 in line with the firmer virgin markets, others think that markets will stabilize based on unpromising demand projections.

A recycled seller who took a cautious approach said, “Our sales have not been bright amid the year-end lethargy. If demand remains disappointing, the market may not reflect firmer expectations in virgin LDPE prices.”

When it comes to R-PET, expectations call for a stable to softer trend for the short term based on indications from the virgin market, which is not very promising due to the off season. “We hope prices can hold steady next month or even tick up as otherwise any drops will mean selling at a loss,” a trader commented.

However, as Q1 wears on, seasonality support will come to the fore for all recycled markets. With the arrival of spring, the tourism sector may revive and bolster bottle consumption, which could lead to a recovery in prices. In the long run, hopes for a more solid demand recovery are pinned on late 2025 or early 2026.