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US HDPE, LLDPE fall below $800 in Turkey; does further weakness lurk ahead?

by Merve Madakbaşı -
by Esra Ersöz -
  • 15/11/2019 (09:40)
American PE prices have broken below new thresholds in Turkey. This was not caught by surprise considering the year-end lull in global markets, the lingering trade dispute between the US and China as well as large PE capacities in both countries.

HDPE and LLDPE down 12% since early October

US HDPE blow moulding and film prices have plunged by $80-100/ton (10-12%), while LLDPE c4 film has also sunk by $95/ton (12%) in one-and-a-half months. The US price ranges moved below the $800/ton CFR Turkey threshold on the low ends both for HDPE and LLDPE cargoes due for late December shipment, as was previously mentioned in ChemOrbis Plastics News LATEST NEWS: US PE offers break below $800 CIF in Turkey.

Little supply pressure keeps drops for LDPE modest

Abundant supply resulted in larger losses for HDPE and LLDPE unlike in LDPE, as this product felt the least pressure based on relatively limited US capacities.

Still, US LDPE film has broken below $950/ton with the latest assessments representing $30-40/ton cuts on the week. Prices have declined by nearly 6% from early October, as can be seen from the ChemOrbis Product Snapshot below.

*Right click the image and open in new tab to view the full-sized snapshot.

Early expectations for Dec call for a new series of PE drops

Some players have already voiced their early projections for December based on a bunch of bearish factors. These weak expectations are based on subdued purchasing activity, destocking on the side of sellers moving into the year-end and the ongoing weakness of China’s PE market.

“US PE prices may have room to move down further next month since global demand stays tepid,” opined a major trader. Not only Turkey but also other major markets including Southeast Asia and Europe may probably be readying to receive more competitive offers from the US. Moreover, supply pressure is far from easing over the near term when newly launched capacities as well as upcoming start-ups both in China and the US are considered.

Competition heats up for Middle Eastern PE sellers

According to ChemOrbis data, Middle Eastern PE prices posted decreases of $20-45/ton on a weekly average since November kicked off. Still, US HDPE and LLDPE cargos are trading at a discount of around $65-75/ton to Middle East origins. “Suppliers may remain under heavy pressure from aggressive US offers in the last month of 2019,” commented a buyer.
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