Türkiye PE market slumps as US cargoes topple Mideast offers

After tracking a soft trend in August under the summer lull, PE extended losses into September as fresh offers from Middle Eastern suppliers failed to sustain rollover attempts. Most producers had to yield to sharply discounted US cargoes, which have been actively offloaded into the region for select grades. The pressure was particularly acute in LLDPE, eroding Middle Eastern suppliers’ pricing power and forcing concessions.

Market players pointed to two key drivers behind the slide: thin downstream demand under ongoing financial strains at home, and globally subdued PE trade that outweighed unattractive netbacks in Türkiye compared with Asia. ChemOrbis data confirmed that Middle Eastern PE offers in Türkiye lack a healthy premium over Southeast Asia and India, with LDPE even slipping into negative margins.

A Middle Eastern producer skipped LLDPE and HDPE offers this month, citing poor profitability and muted offtake. Unconfirmed reports also suggested the company may be preparing for a planned turnaround.

This month, sporadic transactions were reported at $950/ton for LLDPE C4 film and HDPE film, while LDPE film deals were heard as low as $1070/ton CIF, subject to 6.5% duty in a couple of cases, all for Middle Eastern origins.

Import LDPE dragged down by local pressure

LDPE bore the brunt of recent weakness, breaking below the critical CIF $1100/ton threshold not seen since January 2024. Import offers softened as rollover attempts failed to attract deals, while the local producer’s latest price cut set a benchmark. Middle Eastern suppliers had little choice but to grant discounts despite visibly poor returns versus Asian outlets.

Buying interest offered little support. Demand was confined to converters operating under re-export schemes, leaving most import cargoes without strong backing. This explains why LDPE currently delivers negative margins for Middle Eastern producers in Türkiye — an unusual but telling sign of the market’s frailty. Weekly ChemOrbis averages showed Middle Eastern import LDPE on CIF Türkiye basis trading $25-35/ton below Southeast Asia and India.

“Competitive prices from the local producer Petkim weighed on import suppliers. Despite poor netbacks compared to some Asian outlets, the import market softened in response. Still, buying interest was largely muted, with limited inquiries mostly coming from converters holding re-export documents,” players commented.

Meanwhile, a player noted that more buyers have shifted from LDPE to mLLDPE in recent months, lured by more competitive offers, which further weighed on LDPE demand.

LLDPE loses edge over HDPE after two months

Another striking development this month was the erosion of LLDPE’s premium over HDPE, which had held for the past two months. Aggressive US shipments for late October drove LLDPE values down enough to align with HDPE, with the two products trading at par. Players said this narrowing was inevitable under the weight of US LLDPE cargoes in trader bags — with and without additive — priced slightly below $900/ton CIF.

LLDPE had enjoyed relative strength over the summer, but sentiment turned quickly as buyers in Türkiye increasingly tested how low prices could go.

Meanwhile, US pressure also spilled over into HDPE and LDPE markets toward the second half of September. US LDPE neared $1050/ton CIF on the low end, subject to 6.5% duty, while HDPE film hovered around $900-920/ton under the same terms. HDPE injection witnessed more attractive levels near $850/ton CIF. Multiple players said, “We obtained $860/ton for HDPE inj., albeit for material without UV.”

Outlook clouded by weak demand, poor netbacks

Demand drivers are still absent, while financial headwinds at home continue to cap appetite. On the supply side, no imminent concerns are expected to lend support, at least in the short term. Some players argue that US producers may curb their aggressive stance before year-end, as they started depleting earlier than usual this year. Yet, consensus holds that Middle Eastern PE remains stuck between poor netbacks and subdued local consumption for the time being.

Weekly ChemOrbis data showed narrowing premiums of $15/ton over Southeast Asia and $45/ton over India for Middle Eastern HDPE film in Türkiye, while LLDPE traded at par with Southeast Asia and about $60/ton above India.

Bureaucratic hurdles for certain alternative origins, such as Qatar and Uzbekistan, lingered, but no considerable supply concerns were felt since the broader tone remained dominated by aggressive US pricing. Players noted that US producers began depleting stocks earlier than usual this year, likely due to slower exports to Brazil and elsewhere, while the anticipated removal of EU import duties did not prevent sellers from accelerating shipments.

Cues from global PE markets

In fact, apart from China’s import PE market, which has drawn support from seasonal factors, it is evident that global markets are also under pressure. Europe’s PE market failed to stage as strong a rebound as hoped after the summer break, while US competition has also weighed on Southeast Asia’s PE markets. Meanwhile, in India, where import Middle Eastern LDPE prices have fallen to seven-month lows, hopes are pinned on a demand recovery after the monsoon season.