Deeper Middle East supply shock vs. fragile ceasefire relief: Türkiye PP, PE rally tested

Türkiye’s polyolefin markets opened the week on a firm footing but quickly turned into a complex battleground of supply shocks and macro-driven hesitation. A fresh round of hikes from Petkim set the tone early on, reinforcing bullish sentiment that had already been building on tightening import availability since the eruption of the Middle East war in late February.

Yet, as the week progressed, conflicting signals—from sharp upstream disruptions to a sudden drop in oil—left market players questioning the sustainability of the pace of the steep uptrend.

Türkiye emerges as premium market, opening arbitrage window from Asia

Meanwhile, several players drew attention to Türkiye’s growing premium over Asian PP and PE markets, given its position as a net importer. The widening arbitrage window may attract re-export cargoes from Asia to Türkiye, particularly at a time when buyers need alternative supply sources amid the absence of regular suppliers.

Some players have already reported hearing ex-China PP and PE offers for certain grades, as well as re-export Middle Eastern PE volumes from China.

PP touches critical highs, buyers’ reaction muted

At the heart of the bullish push were renewed supply concerns stemming from the Middle East. The attack on Jubail sent new shockwaves across global petrochemical chains, prompting several major producers, including SABIC, to halt operations as a precautionary measure. These disruptions came at a time when regional supply was already constrained amid Hormuz issues and a strike on the UAE’s Borouge petrochemical plants over the weekend, amplifying the immediate impact on export availability into key markets, including Türkiye.

On the PP front, import offers surged aggressively in response to these developments. Sellers moved swiftly to adjust their targets upward compared to the beginning of the week, citing both reduced output and rising replacement costs. Homo PP raffia offers, which had been discussed at $1600–1650/ton CIF Türkiye just days earlier, climbed to $1800/ton CIF and even surpassed this threshold for Russian-origin cargoes. The pace and magnitude of these increases underscored the market’s sensitivity to supply-side shocks.

However, the sharp upward move in PP prices was not matched by buying interest. Converters and traders alike adopted a cautious stance, resisting higher offers amid limited ability to pass on costs. Many buyers chose to stay on the sidelines, resulting in a widening gap between seller expectations and workable deal levels. This standoff signaled that, despite tighter supply, the market’s demand fundamentals were not strong enough to fully sustain the rally.

American PE sees no respite from massive weekly increases

PE markets followed a similar trajectory, albeit with even more pronounced volatility as a Saudi Arabian major had to suspend its offers by Tuesday. US-origin LLDPE film offers started the week at around $1700/ton CIF Türkiye before surging toward $1900/ton CIF in some cases.

The spike was largely driven by tightening Middle Eastern supply after the Jubail, Saudi Arabia, and Ruwais, the UAE, disruptions, which forced some buyers to consider alternative origins at significantly higher levels, not to mention uncertain flow from Iran amid the war damage on several plants in the country. As with PP, however, these elevated offers struggled to gain traction in a demand environment that remained fundamentally fragile.

Eyes on Hormuz Strait traffic and affordability of recent highs

Midweek developments introduced a decisive caution in sentiment. Crude oil prices plunged by nearly 15% on Tuesday as geopolitical tensions eased, with Iran and the US entering a two-week ceasefire and signaling the potential normalization of flows through the Strait of Hormuz.

This sharp correction in energy markets injected a cautious tone into the polymer complex, prompting buyers to question whether the recent price surge had already reached its peak.

However, in the early hours of Thursday, crude oil prices turned upward again.Reports of violations rendered the US-Iran ceasefire fragile, accompanied by news that Iran had once again halted tanker traffic through the Strait of Hormuz. In this environment, buyers’ mid-week expectations that PP and PE prices could see a correction were overshadowed by ongoing supply disruptions.

The aftershocks of the Jubail disruption—particularly in terms of lost production and delayed restarts— are unlikely to dissipate immediately, suggesting that supply may remain tight in the near term. Against this backdrop, Türkiye’s PP and PE markets are expected to stay volatile, with players closely monitoring both upstream developments and demand signals to navigate the next move.

In the meantime, Türkiye may reportedly be preparing temporary relief measures for selected polymer imports as the closure of the Strait of Hormuz continues to tighten raw material availability across regional plastics markets, with local industry groups warning that escalating feedstock costs are beginning to strain supply chains across packaging, food, healthcare, and consumer goods sectors.