Türkiye PE outlook for 2026: From margin pressure to cautious rebalancing – Is a sustainable recovery finally within reach?

The polyethylene market in Türkiye approaches 2026 after a year marked by volatile supply patterns, shifting trade flows, and chronic demand weakness. A brief tightness phase at the start of 2025 quickly gave way to oversupply, aggressive US competition, falling oil markets, and intermittent geopolitical shocks that lifted sentiment only temporarily.

Middle Eastern allocations fluctuated amid netback complaints, Iranian participation was inconsistent, and European parity swings repeatedly reshaped import competitiveness, all while converters navigated high costs and tight financing.

Against this backdrop, price movements were rather supply-driven, leaving the market responsive to even marginal disruptions, which prevented steeper decreases. From peak to trough, film-grade PE prices moved by $170–200/ton. As 2026 approaches, the core question is whether a more sustained recovery is possible—or whether global uncertainties will keep volatility in place.

2025: A year of sharp losses and structural constraints

PE markets endured another challenging year defined by erratic demand. A firm Q1, supported by limited Middle Eastern quotas and robust LDPE consumption, was followed by a prolonged slump from April through mid-summer. As liquidity tightened and US suppliers pushed deeply discounted HDPE and LLDPE worldwide in H2, Middle Eastern producers were pressed into defensive pricing.

Geopolitical tensions: A short-lived shockwave in June

A notable turning point came in June 2025, when escalating Middle Eastern tensions briefly pushed crude and naphtha sharply higher. Concerns about shipping disruptions triggered short-term restocking, particularly in LDPE and select HDPE grades. Yet the impact faded quickly: supply chains remained intact; energy prices retreated within weeks, and weak downstream orders prevented lasting price gains.

By early July, the market had returned to an oversupplied, demand-constrained landscape. Meanwhile, the end of the years-long civil war in Syria was interpreted by some industrial players as a factor that could gradually revive export prospects.

Late-Q3 geopolitical risks, freight volatility, and brief supply disruptions provided some support, but downstream demand remained structurally weak. As a result, import PE prices hovered near multi-year lows toward Q4—setting the tone for expectations heading into 2026, which called for traditional hikes in the early new year.

Tentative influence of trade-war dynamics

The trade-war episodes of 2025 were closely watched by Turkish players. US tariffs against key trade partners, China’s retaliatory measures, and evolving EU responses redirected American PE into Türkiye, Southeast Asia, and Latin America earlier in the year. Thus, expectations rose that Türkiye might gain some advantage in downstream export markets, whereas disputes began to ease later on.

With Türkiye applying no retaliatory tariffs against just a 15% duty by the US, the country has remained a natural sink for US surplus PE, creating periodic buying opportunities but also injecting additional volatility into supply patterns. Whether this role will deepen in 2026 is unclear, particularly as tariff tensions have started to cool. During January–October, the USA overtook Saudi Arabia as Türkiye’s largest PE supplier with a 25% share of total imports, compared with Saudi Arabia’s 22%, according to ChemOrbis Stats Wizard. In the same period of 2024, the shares stood at 21% and 24%, respectively.

Middle Eastern suppliers succumb to US pressure for another year

This is to say, Middle Eastern producers remained a primary source in 2025 but faced mounting pressure from competitively priced US cargoes. LDPE availability tightened sharply in Q1 due to turnarounds and unattractive netbacks to Asia, widening its premium to beyond $100/ton over other grades. In contrast, HDPE and LLDPE remained adequate throughout much of the year.

Temporary cracker issues in Saudi Arabia and shipment delays mid-year helped prevent a deeper collapse, but could not overcome soft demand. US suppliers effectively set the global tone for HDPE and LLDPE C4 film during August–October, dragging Middle Eastern offers to more than 5-year lows. By November, however, the US lows began to fade, and modest upward corrections emerged as sellers cleared excess stocks.

Supply swings amid regulation changes, sanctions, and margin pressure

The convergence of weak margins and depressed demand in Europe, South Korea, and China had channelled more material toward Türkiye until recently, when restructuring efforts accelerated and deep financial losses triggered output cuts. Meanwhile, geopolitical frictions and sanctions continued to shape Iranian participation, while regulatory changes altered expectations for Qatar-origin cargoes. Even so, buyers remained cautious as prices showed few signs of a sustained recovery.

European LDPE turns to Türkiye despite climbing €/USD

European LDPE was competitive early in 2025 when parity was favorable, but the strengthening of the euro later eroded that advantage, prompting corrections in Q2 and dampening interest in Q3. Despite occasional production hiccups and the euro appreciating roughly 12% year-to-date, European sellers eventually regained an edge versus other origins and local producer Petkim.

This reflected efforts to protect margins at home amid restructuring, high utility costs, and weak profitability—conditions that encouraged European producers to offload material into Türkiye. Meanwhile, Petkim also posted consecutive losses in Q1–Q3, mirroring broader macroeconomic challenges. Import suppliers likewise faced squeezed margins despite softer crude, as global oversupply continued to limit netbacks.

Iran: Still a wildcard with limited visibility

Iran remained an important but unpredictable supplier. US sanctions on distributors and a major Turkish converter, coupled with regional instability, reduced Iranian participation—particularly for LDPE and LLDPE. HDPE film and blow molding continued to anchor the low end of the market when logistics allowed. Still, the uncertainty surrounding sanctions kept many buyers cautious, particularly in the second half of the year.

Qatar freed from customs duty; volumes under watch for 2026

Türkiye removed customs duties on Qatar-origin polymers in early August. However, implementation was slow due to Euro One documentation issues, which persisted until October and forced buyers to continue paying duties. With paperwork now resolved, market participants will be watching to see whether Qatar-origin volumes expand meaningfully in 2026.

LDPE retains a consistent premium, LLDPE and HDPE trade at par for most of the year

Import LDPE consistently commanded a premium over other commodity grades, supported by limited availability and unattractive netbacks for Middle Eastern sellers relative to Asia. HDPE, by contrast, grappled with structural oversupply for much of the year. LLDPE C4 film largely moved in tandem with HDPE—experiencing brief periods of tightness but lacking firm structural support. Toward year-end, HDPE film supply tightened as Iranian deliveries thinned and South Korean shipments decreased amid lower operating rates and firmer freight costs. As a result, HDPE film prices edged slightly above LLDPE C4 film in November for the first time in 20 months.

Stats: Import volumes defy demand views; HDPE leads

Demand remained the weakest element of 2025. Converters faced soft downstream orders, elevated borrowing costs, rising labor expenses, and weaker export markets—especially in Europe. Even during price-attractive windows in April–May and September, restocking was tactical rather than sustained. Expectations for 2026 point to only a moderate improvement: local consumption may stabilize, but a broader recovery depends on stronger European industrial output and easier financing conditions domestically. Without a demand-side rebound, any price rally is likely to remain supply-driven.

Despite persistent reports of weak end-product demand, Türkiye’s total PE imports for the first ten months of 2025 did not decline. LDPE and LLDPE volumes were nearly unchanged year-on-year, while HDPE imports even rose by 5%. This resilience partly reflects a soft 2024 base and greater importer confidence after last year’s exchange-rate volatility subsided. Exceptionally low offers—at five-year lows for several grades—also supported consumption. HDPE exports rose 8%, suggesting much of the increased supply was re-exported.

Outlook for 2026: A more balanced yet fragile market

Risks for 2026 remain tilted toward supply rather than cost inflation. Regional tensions, shifts in shipping routes, and China’s ongoing self-sufficiency efforts all represent structural challenges. Freight volatility—one of 2025’s defining cost drivers—may persist into H1 2026 depending on Red Sea security and insurance costs. Nonetheless, overcapacity may limit gains in container prices. On the positive side, any easing in trade frictions or renewed stimulus in Asia and Europe could revive resin demand and support export markets.

Overall, Türkiye enters 2026 with a more balanced but still delicate PE landscape. A sustainable bullish trend will depend on a genuine improvement in downstream demand—both domestically and across Europe, China, and India.

According to the OECD, Türkiye’s economy is projected to grow around 3.9% in 2026, with IMF and Fitch estimates in the 3–3.5% range. Inflation, which remained high in 2025, is expected to ease toward single digits or low double digits—around 20–21% per the OECD and 13–19% based on central bank forecasts. Exports are officially targeted at roughly USD282 billion.

Domestic consumption is expected to recover gradually as inflation moderates and financial conditions normalize, though purchasing power will improve only slowly. Export performance should also firm, but hitting official targets will depend heavily on global demand and currency stability. A more realistic range appears to be USD250–270 billion unless external markets strengthen more decisively.

2026 is likely to deliver incremental—rather than dramatic—improvements in both domestic and export-driven consumption.