Türkiye continues to unwind conflict-fueled premiums: What’s next for PP and PE in June?

Polyolefin markets in Türkiye headed into the extended Eid holidays under mounting pressure, as persistently weak demand, liquidity concerns, and poor export conditions continued to outweigh ongoing supply-side disruptions across the Middle East and the Hormuz Strait. News of some plant restarts also helped ease supply concerns to a certain extent.

Both PP and PE markets saw sellers adopt lower pricing strategies to stimulate limited spot activity before converters scale back operations or temporarily halt production during the holiday period.

Regional outages, elevated freight costs, and logistical risks remain supportive factors in theory. Yet, buyers largely stayed focused on hand-to-mouth purchases or even sold their excess resin stocks amid fading order books compared to the early weeks of the war and weak confidence across derivative sectors, where margins remained thin. Recent corrections also show the market struggling to sustain the hefty premiums built during the earlier conflict-driven rally, even as prices for several grades remain sharply above pre-war levels.



PP declines accelerate as poor demand outweighs supply concerns

In the PP market, sellers across multiple origins faced intensifying resistance from buyers as demand fatigue deepened further as Q2 wore on. Saudi, Russian, and European suppliers all revised offers downward by mid-May, while earlier attempts to maintain elevated levels quickly lost traction amid tight cash flow conditions. The accelerating downtrend reflected the sharp deterioration in purchasing appetite from converters. Manufacturers prioritized liquidity preservation rather than stock replenishment before the Eid break, with many reducing operating rates due to insufficient downstream orders.

Import Saudi Arabian homo-PP grades came under pressure after the war-driven rally accelerated in March and April. PPBC injection posted the sharpest decline among PP grades, falling nearly 9% over the past four weeks, while PPH fibre and PPH raffia lost around 5% and 6%, respectively. Nevertheless, prices continued to indicate sizable gains compared to pre-war levels. Saudi Arabian PPBC injection remained up by more than 75% from late February, while PPH fibre and PPH raffia still reflected cumulative increases of 71% and 68%, respectively.

The latest corrections suggest that part of the speculative war premium has started to erode, although supply concerns and elevated replacement costs continue to keep overall PP and PE levels historically high. Meanwhile, panic sentiment linked to supply shortages has visibly eased in recent weeks, as some Saudi and UAE producers resumed operations and inventory-based sales became more available. Buyers no longer perceive an acute shortage environment, particularly as weak end-product demand continues to suppress consumption.

European LDPE back in play as regional demand wanes

The PE market similarly remained dominated by demand weakness ahead of the holiday period. Buyers retreated further from negotiations as weak export competitiveness, sluggish domestic consumption, and poor margins continued to pressure converters. European LDPE suppliers returned to the Turkish market with more aggressive pricing strategies, while US-origin material maintained pressure.

Although some Middle Eastern capacities remain offline and arbitrage dynamics from Asia are shifting, these factors failed to generate meaningful buying interest in Türkiye, with even Middle Eastern sellers reversing their initial May hikes. Recent declines accelerated, particularly for US-origin HDPE and LLDPE film, both of which posted double-digit losses from wartime peaks after aggressive Chinese-origin deals pressured sentiment.

Still, the broader picture shows that PE prices remain exceptionally inflated relative to pre-conflict conditions, even though markets in Türkiye have continued to soften from the record highs seen after the outbreak of the Middle East war. According to ChemOrbis Price Wizard data, import Middle Eastern HDPE film, LDPE film, and LLDPE C4 film lost around 3%, 3%, and 1%, respectively, over the past four weeks. Meanwhile, US-origin PE grades saw sharper corrections, with HDPE film down nearly 11%, LDPE film easing by 2.5%, and LLDPE C4 film plunging by almost 14% over the same period.

Despite the recent downturn, PE prices still stand well above late-February levels, with cumulative gains reaching nearly 74% for Middle Eastern HDPE film, 80% for LDPE film, and 77% for LLDPE C4 film. US-origin materials also continued to reflect extraordinary net increases of 71-82% compared to pre-war levels.

Caution over June polyolefin outlook remains at the forefront

Looking ahead to June, sellers hope activity will pick up after the Eid holidays, while buyers expect additional price corrections. Many participants believe the sharp rally triggered by geopolitical tensions is still unwinding, leaving room for further downward adjustments, particularly if demand fails to recover post-Eid.

In the meantime, Turkish converters returning from the Interpack Fair in Düsseldorf also highlighted intensifying competition from lower-priced Asian finished products, particularly in European export markets, further weakening confidence for the coming term.

However, supply-side risks have not fully disappeared. Ongoing Middle Eastern outages, freight volatility, rerouting risks linked to geopolitical tensions, and uncertainties surrounding the Hormuz Strait continue to prevent expectations of a severe collapse among PP and PE producers. As a result, both PP and PE markets are likely to remain caught between structurally fragile supply conditions and heavily weakened demand fundamentals as the industry enters the summer period.