Slack demand looms over sellers’ rollover targets in Türkiye’s PE market

Most Middle Eastern PE suppliers approached the market with steady prices for August this week after the uptrend faltered last month due to declining resin demand. Buyers have slightly lower buy ideas, influenced by volatile upstream costs, sluggish derivative markets, and pervasive liquidity issues in the polymer markets.

Suppliers face resistance to initial August offers

Middle Eastern producers revealed their offers with rollover requests for the new month, with prices centering at $1210-1230/ton for LDPE film, $1060-1090/ton for LLDPE C4 film and $1050-1060/ton for HDPE film, all on CIF Türkiye, subject to 6.5% customs duty, cash basis.

Within the ranges, some deals indicated tiny discounts month over month, while the weekly assessments were stable to $10/ton softer from last week, reflecting persistently thin demand from Turkish PE consumers.

A regional source said, “We achieved rollovers on our LDPE deals while our LLDPE deals indicated $5-10/ton discounts given buyers’ resistance to the prevailing offers.” According to players, LDPE supply remained limited but global sellers were still willing to sell material to Türkiye amid weak demand and lower prices in Asian outlets, which caused suppliers to trim their earlier targets of $1250/ton CIF Türkiye in some cases for this grade.

A converter also agreed to the recent situation, saying, “A Saudi Arabian supplier told us that they were open to discounts of $20/ton for LLDPE, albeit depending on grade. Still, we are reluctant to secure distant cargos considering long lead times as the outlook remains foggy for Q4.”

Prompt PE provides more competitive edge than new shipments

Reflecting tight liquidity and cautious resin demand, players reported hearing some offers for materials on port, which stood below the prices of new shipment cargos. For instance, American LLDPE emerged at $1050-1070/ton CIF Türkiye as prompt versus fresh shipments at/above the $1100/ton mark in early August, multiple players confirmed.

Falling prices in China, SEA and India dampen sentiment

So far, Türkiye’s modest premium over Asian PE outlets coupled with restricted availability for certain PE grades has kept the market close to last July levels. Nonetheless, lower prices particularly for LDPE across China, Southeast Asia, and India dimmed sentiment in Türkiye, let alone a steep drop in oil futures earlier this week. On top of this, high domestic polyolefin stocks overshadowed seasonal hopes in China, where economic data for July disappointed.

Weekly average data indicates that import PE prices in Türkiye offer improved netbacks based on prevailing levels in China for LLDPE and HDPE film, which will keep players focused on the upcoming trends in Asia.

HDPE film and pipe 100 deemed the weakest products

HDPE grades remained the weakest among all PE products, even though the market as a whole underperformed despite seasonal expectations. A global producer noted, “We heard competitive Saudi Arabian HDPE pipe black (100) offers below the $1100/ton CIF Türkiye mark this week. This mirrors stalled market conditions in the pipe industry amid economic challenges.”

HDPE traders affirmed weaker demand for film compared with blow moulding amid plentiful availability and poor demand for this product.

Short-term outlook stays unpromising

Players now prefer to keep their money in interest-bearing accounts rather than spending or investing it elsewhere. This suggests that macroeconomic headwinds may continue to keep resin purchases at a bare minimum, impacting sellers’ rollover targets for the month.

“Buyers will likely push for discounts counting on easing shipping costs, but the extent of potential price cuts will depend on supply levels,” a player noted. Highly volatile crude oil prices will also be a key factor to monitor, especially amid ongoing demand concerns and tensions in the Middle East. Global benchmarks rebounded from a six-month low by mid-week after recession fears in the US caused a steep drop in commodity markets on Monday.