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Türkiye witnesses plentiful PE offers amid globally weak demand

by Merve Madakbaşı -
  • 12/05/2023 (02:14)
Globally weak demand has caused Türkiye’s PE market to attract more offers in May, with competitive deep-sea offers putting a strain on regular Middle Eastern suppliers. Activity remained muted as economic uncertainties remained at center stage with only a couple of days left for the elections on May 14.

Middle Eastern prices announced lower for May

Earlier expectations had called for more modest price cuts compared to April for the month, with the local producer, Petkim’s upward adjustments for LDPE following aggressive drops helping sellers to renew their confidence in late April. Indeed, the producer was willing to offset its losses emanating from parity movements with slightly firmer prices.

Nonetheless, buying enthusiasm remained mostly low as deeper cash flow issues hampered trading activity into the second half of May. Moreover, the emergence of attractive prices for distant cargos exerted extra pressure on prices this week.

Middle Eastern LDPE prices were assessed $30-40/ton lower at $1060-1090/ton for LDPE CIF Türkiye, subject to 6.5% duty, cash from last week as initial attempts for prices at or above the $1100/ton threshold failed. LLDPE C4 film was assessed $20/ton lower and HDPE film was flat on the week, with both ranges standing at $1080-1100/ton.

As for LDPE, prices at around $1050/ton or below were also talked for some Saudi cargos from traders although these levels were not widely confirmed at the time of writing. According to the weekly average data from ChemOrbis, Middle Eastern LDPE moved below LLDPE and HDPE film following May drops.

CIF Türkiye – Import Prices – LDPE – LLDPE – HDPE

Market buffeted by talks about US PE below $1000 CIF

US PE prices were assessed $40-100/ton lower week over week as stagnant demand from other outlets put a heavy strain on American suppliers. The notional ranges receded to $1000-1040/ton for LDPE film, LLDPE C4 film and $1040-1060/ton for HDPE film, b/m and injection. These June shipment prices stood $60-70/ton below the low ends of the Middle Eastern ranges.

A global trader commented, “Falling spot ethylene prices in the US, adequate stocks at US producers, and slow economies across the board led to significant declines for this origin.”

US LDPE, LLDPE and HDPE film prices as low as $930-980/ton were also talked about, but they were not widely confirmed at the time of press. A converter said, “We are curious about whether ex-USG PE cargos will continue to find their way to Türkiye with aggressive prices in the coming term.”

Malaysian LLDPE grabs some interest

The market has been seeing Malaysian LLDPE C4 film prices since last week, while earlier levels have moved down to $1100-1130/ton CIF Türkiye, no duty. These levels stood $40-50/ton below the lowest dutiable offer in the market.

“These cargos are for May and June shipments, while some buyers concluded deals at these levels due to their competitive power against dutiable origins,” multiple players said.

Some players do not exclude the possibility of hearing competitive LDPE offers from Europe based long supply and low consumption in the region. “Prices stood at around €1100/ton ($1200/ton with recent parity) CIF Türkiye earlier this month, whereas we have started to hear prices below the €1050/ton ($1145/ton) mark recently. This reflects the lethargic demand in Europe amid the lingering recession,” a converter reported late this week.

Players not optimistic for near term

Sentiment remains weak in the near term, considering a widespread cautiousness amid the persisting uncertainties for the post-election period. Global indications, including a soft scene in China right after the Golden Week Holiday, poor PE consumption in Europe and India, as well as a downswing in global ethylene prices, also underpin this view.

The pressure from competitive US PE cargos may continue to shadow limited Middle Eastern supply unless activity picks up in H2 May or June. In the meantime, players will monitor Türkiye’s narrowing gap with China’s import markets, which hovers between $85-130/ton depending on the grade these days.
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