Waning demand caps July PP, PE hikes in Türkiye

PP and PE sellers in Türkiye approached the market with some price hikes in July. This pricing strategy aligned with earlier expectations, as the conflict that erupted in the Middle East in mid-June had revived demand from polyolefin buyers looking to hedge against potential risks. As a result, regular suppliers from the Middle East, Russia, and the US saw reduced stock pressure. On the other hand, following heavy purchases last month, the subsequent cooling in resin demand has limited the scope of July increases.

While the market continues to draw some support from limited import availability, sluggish derivative consumption and cash flow issues have come to the fore.

PP hikes lose steam in July, copolymer trails behind PPH

As the market extended its gains into July—mainly supported by reduced stocks at Saudi Arabian suppliers—homo-PP offers neared new highs of $1000/ton for raffia and $1030/ton for fibre, both CIF Türkiye, subject to 6.5% customs duty, cash. However, these fresh high-end offers failed to translate into deals amid a lukewarm response from buyers.

“We had secured our needs back in June during the wave of freight rate hikes and crude oil’s rally. With operating rates at manufacturers remaining modest due to rising utility costs and poor margins, most of them now prefer to consume their existing stocks,” a converter said.
At the same time, PPH producers were not widely present this week, as import volumes for new shipments stayed limited and risk premiums in the logistics industry remained high. A recent series of attacks by Yemen-based Houthi militants has driven up insurance costs for vessels transiting the Red Sea.

A converter added, “We heard that a Saudi Arabian producer faced some delays in shipments, although we could not confirm this. Buyers are not enthusiastic to make purchases, while sellers remain firm on their list prices amid a lack of counter bids.”

According to weekly average data from ChemOrbis, Saudi Arabian PP raffia and fibre prices have risen by $10/ton so far in July, after gaining $20–30/ton throughout June.

As a side note, several traders reported slower demand for PP copolymer grades, as competitively priced, locally held materials amid ongoing cash constraints weighed on interest in Middle Eastern import cargos. Meanwhile, lower freight rates from Far East Asia—following a previous rally—also influenced the market, prompting slight downward adjustments in South Korean offers after their mid-June gains.

PE supported by production hiccup in Saudi Arabia

Turkish PE players reported limited import supply for LDPE and LLDPE C4 film from the Middle East, which helped mitigate the impact of weakening demand in July. Middle Eastern suppliers approached the market with slight increases of $10–30/ton in most cases early in the month, although a few sellers conceded to rollovers, albeit only for regular customers. Attempts at larger hikes met resistance from PE consumers, many of whom had already restocked in June amid supply concerns at the time.

The main supportive factor for PE has been a recent cracker issue in Saudi Arabia, which led to a tighter supply outlook from some producers for the coming term. Buyers said, “We heard that a Saudi Arabian PE producer will have limited prompt allocations for two to three months due to a cracker shutdown. This, coupled with already limited LLDPE supply and higher US LDPE and LLDPE offers, helped suppliers achieve some hikes in their deals this month. Nonetheless, HDPE supply has been sufficient, which dampened demand for this grade in some cases.”

LLDPE and HDPE film prices at or above the $1000/ton CIF Türkiye mark lacked buying interest at the time of writing, with negotiations still underway. For LDPE, a player said, “Low netbacks in Türkiye compared to India and other Asian markets pushed Middle Eastern sell ideas up month over month. Moreover, the strong €/USD parity curbed material flow from Europe, despite sluggish pre-holiday demand in the region. It remains to be seen whether modest import supply will outweigh buyers’ resistance to new highs in the coming days.”

Similar to the PPH market, Middle Eastern PE offers have been up by $10/ton from June so far this month, according to weekly average data from ChemOrbis.