Turkish players assess potential impacts of the Middle East flare-up on polymers

Türkiye’s polymer markets have been shaken by the escalating and ongoing tension in the neighboring Middle East since the past weekend, and the first half of this week saw traders retreating from the market. In line with reports of further freight increases from Far East Asia, PP and PVC offers from South Korea became scarce, while the fate of Iranian supply—particularly in the HDPE market—remained a point of curiosity. Meanwhile, a distributor of a European PE producer confirmed that they suspended LDPE offers amid an order stop from the region this week.

Geopolitical unrest threatens oil and polymer supply chains

The Middle East holds a critical position not only due to its strategic importance in global crude oil and energy trade, but also as Türkiye’s largest source of polymer imports, particularly for PP and PE. The ongoing tension in the region has already led to a sharp spike in crude oil prices, with ICE Brent futures hitting around $75/bbl on a weekly average toward mid-week, up by a total of $11/bbl from late May. While Iran’s potential move to close the Strait of Hormuz has reminded markets of OPEC’s spare capacity—offering slight relief—it continues to pose a risk of further increases in energy prices.

In Egypt, domestic PE producers ETHYDCO and SIDPEC, along with EPC—one of the country’s two PVC producers—have halted production due to a gas supply cut from GASCO. Although Egypt is not a major PE supplier of Türkiye and mostly provides certain HDPE grades in limited amounts, the country has been among the important suppliers for PVC as a nearby and duty-free option for particularly pipe manufacturers.

According to media reports, operations at the Bazan Group’s oil refinery in Haifa Bay were completely halted after an Iranian missile strike on Sunday. The company reportedly cited extensive damage to the on-site power plant as the reason behind the shutdown while it was working with the Israel Electric Corporation to restore electricity to the site.

Some players pointed to a potential decline in Iranian PE supply if mutual attacks were to persist, while the possibility of broader disruptions to Middle Eastern supply remained uncertain at the time of writing. Most agreed that Iranian LDPE and LLDPE cargos had not offered workable price levels for months, which would likely limit the impact on these grades. Nonetheless, HDPE film and blow molding cargos could tighten due to potentially disrupted deliveries or a lack of fresh shipments from Iran.

Meanwhile, an agent of a European supplier reported a temporary order stop for LDPE in the third week of June, citing rising crude oil and freight costs as the conflict between Israel and Iran continued to unsettle markets. This move aligned with mounting concerns over further disruptions to Red Sea shipping lanes and potential ripple effects across global supply chains.

Demand response thin amid ongoing macroeconomic strain

Earlier in June, Turkish players had reported modest demand following the Eid al-Adha holiday, and PE prices largely failed to rise above May levels. Homo PP saw slight increases of $10–20/ton at the lower end of the ranges, while freight-driven hike attempts in PVC failed to revive demand amid comfortable supply at warehouses. However, considering recent developments, many traders were noted to have suspended their offers this week amid bullish signals fueled by upstream and shipping costs.

A pipe manufacturer said, “We expect more PP copolymer prices from South Korea to rise above $1200/ton CIF soon.” A sack maker confirmed hearing slightly higher PP raffia offers. However, he said, “The July outlook remains foggy as most manufacturers still operate at reduced rates. We will adopt a waiting stance as we are covered.” A PVC trader said, “Our South Korean supplier issued $20-30/ton hikes before withdrawing its offers shortly after due to unstable freight rates. Yet, we still hear that some players can obtain more competitive container prices in a few cases, and demand for PVC has been cautious given materials on the way.”

The recent developments have not caused widespread panic among buyers for now, however, as liquidity issues remain a primary concern and the derivative outlook is blurry amid macroeconomic issues at home and in foreign markets. So far, both buyers and sellers agree that the current situation could impact polymer supply. Yet, a lack of fundamental recovery in demand may keep any hike attempts in check so long as access to loans remains problematic, they comment.

Although early July PP, PVC, and PE price expectations remain unclear amid a widespread wait-and-see stance among players, rising raw material costs, higher insurance premiums in the shipping sector, and surging container rates are expected to support sellers in the short term. Rising oil futures pushed spot naphtha prices north, which may underpin next olefin contracts in Europe. In the long term, however, a potential prolongation of geopolitical conflict could drive costs higher, signaling increased inflationary pressures. Such a scenario would likely create additional strain on end-user consumption.