Cost support returns to Türkiye's polymer markets, reviving buying interest

Türkiye’s polymer markets had turned lower after staging a sharp rally in March and April, driven by a combination of war-related physical supply disruptions, soaring freight rates, and panic buying. Unlike polyolefins, however, PVC prices joined the uptrend only in March before entering a downturn earlier, while the corrections that began in May for PP and PE turned into a free fall by mid-June.

In recent days, renewed geopolitical tensions in the Middle East have pushed oil prices somewhat higher, lending support to a cautiously stabilizing market sentiment.

This prompted some Turkish buyers to return with price inquiries after weeks of inactivity despite a mid-week national holiday. This reflects growing perceptions that the prolonged downtrend may have neared its end. Adding to the cautiously stabilizing sentiment were modest price-increase attempts in China, as well as expectations that European markets may approach a bottom if firmer spot naphtha and monomer prices offset the impact of the summer holiday lull.

Even so, some players argue that higher production costs alone will not be sufficient to trigger a sustained recovery and may only help stabilize the markets. Unlike during the rally period, the supply chain is no longer disrupted by widespread plant outages in the Middle East, they said, while a meaningful recovery in downstream demand is still needed to support a lasting price rebound.

Traders report rising inquiries for PP, buyers causitous

A major trader reported that homo PP demand improved this week for the first time in a long while, despite the national holiday. The player said, "Buyers returned to the market to replenish some stocks amid the possibility of prices moving higher. Previously, they had preferred to consume existing inventories, as material was readily available in the domestic market. For the time being, the lack of any tangible improvement in downstream markets may keep PP buying cautious. However, we believe derivative markets could start to pick up as of September."

Meanwhile, some sack and carpet manufacturers maintained a cautious stance, saying, “Sellers may attempt to test price increases, but their viability will depend on the performance of downstream orders. Some buyers are already covered until mid-September, while the approaching summer holidays in Europe may keep purchases need-based next month. Moreover, we have been unable to pass the earlier resin price surge on to our finished-product prices over the past three months.”

US PE sellers adopt slightly firmer stance

The collapse of the ceasefire in the Middle East and the renewed escalation of hostilities pushed Brent crude oil prices to their highest level in a month. In response, naphtha, ethylene, and propylene prices also staged their first meaningful recovery in quite some time.

These developments helped improve sentiment among sellers to some extent. PE traders, who had previously been offering US-origin material at heavily discounted levels, refrained from repeating those low prices this week. Some traders also reported that US producers had either withdrawn their offers or implemented modest upward revisions in response to the renewed geopolitical tensions.

Converters and traders that have postponed purchases for an extended period are likely to return to the market, as the free fall has given way to a relatively more stable environment, a player commented. “However, buyers with sufficient inventories may remain reluctant to replenish stocks. A meaningful price recovery will ultimately depend not on resin demand alone, but on a tangible improvement in downstream orders.”

Multi-month low prices drive some PVC demand

The PVC market showed tentative signs of stabilization this week after months of steep corrections. A rebound in upstream costs, coupled with growing expectations that a major Taiwanese producer has largely completed its downward price revisions in Asia, helped restore some confidence among sellers. The sentiment was further supported by stable to slightly firmer PVC prices in China and Southeast Asia.

Even so, comfortable supply continued to cloud the outlook, although an increasing number of players believed the room for further discounts had narrowed considerably. Reflecting this shift in sentiment, multiple converters confirmed securing US K67 below the $700/ton CIF mark since late last week, believing prices were approaching a bottom.

According to weekly average data from the ChemOrbis Price Index, dutiable K67 fell back to late January levels, while the duty-free market moved to within striking distance of its pre-war level.

One manufacturer said, “The recent rebound in Brent crude oil futures and the fact that PVC prices have already corrected significantly encouraged some buyers to return to the market.” A trader shared a similar view, adding, “We noticed that South Korean suppliers started withdrawing their previous offers. It seems prices are nearing—or may have already reached—a floor after weeks of steep declines.”