August outlook for PP and PE strengthens in Turkey as suppliers test higher prices

Sentiment across Turkey’s polyolefin market continued to improve this week after stabilizing on the back of rising production costs in the previous week. Sellers have become increasingly confident, with several suppliers already lifting August import offers for homo PP and PP copolymers. In the polyethylene market, firmer US-origin offers have triggered the first signs of recovery, while domestic producer Petkim has also reinforced its pricing strategy amid improving buying interest.

Adding further support to the market, Brent crude oil climbed above $95/bbl on July 23 following escalating tensions between the US and Iran. The sharp rise in oil prices has also strengthened expectations for higher August olefin contract settlements in Europe, providing additional support to polyolefin prices.

China recovery and higher propylene costs support PP market

The rebound in China’s polypropylene market, along with stronger propylene prices across Asia, has encouraged suppliers to adopt a firmer pricing approach for August shipments into Turkey.

Following several months of continuous price declines, producers are no longer willing to match previous low price levels. Higher feedstock costs and improving market sentiment across Asia have significantly reduced room for additional discounts. Although many buyers remain cautious due to uncertain demand, sellers have become more confident as upstream market conditions continue to improve.

Market sources indicated that a major Saudi Arabian producer is preparing to increase August offers by $50/ton or more. Another supplier noted that stronger buying interest from India, Africa and Gulf countries helped clear July allocations, allowing producers to introduce higher prices for August cargoes.

US suppliers lead PE recovery

The polyethylene market has also started showing signs of recovery, led by US-origin material. After weeks of aggressive pricing, US suppliers have either withdrawn official offers or raised LLDPE C4 film and HDPE film prices above the $1,000/ton CIF mark.

This development has increased expectations that Middle Eastern producers will soon follow with similar price increases, as higher crude oil and ethylene prices continue to raise production costs. Competitive pressure has also eased after many suppliers sold most of their available volumes into Asia during the previous week, resulting in a much stronger outlook for August compared with only two weeks ago.

Converters have also expressed concern after the European Union removed its 6.5% import duty on US-origin polyethylene. Market participants believe this decision will allow European manufacturers to access lower-cost US resin while exporting finished products duty-free, reducing the competitiveness of Turkish manufacturers. In addition, increased US PE imports into Europe could encourage regional producers to redirect their domestic material into Turkey, creating additional competition.

Several exporters argued that Turkey should consider introducing a similar customs policy to maintain fair competition with European manufacturers.

Domestic market firms as spot availability tightens

The stronger sentiment has also spread to Turkey’s domestic polyolefin market, where distributors have begun increasing offers as buying activity improves and prompt material becomes less available.

After several weeks of inventory liquidation and aggressive discounting, traders reported that most low-priced stocks have now been exhausted. This has enabled sellers to adopt a firmer pricing stance and recover part of the losses recorded during June and early July. Market participants reported weekly increases of up to $100/ton in some grades.

Domestic producer Petkim has also reflected the improving market conditions by raising prices for PP and HDPE grades. LDPE sentiment has strengthened as well, supported by healthier demand, limited import availability and indications that European suppliers may increase prices by €150/ton.

Converters also noted that distributors avoided building inventories during the recent market downturn. As demand has gradually improved over the past two weeks, prompt supply has tightened, allowing sellers to continue increasing offers.

Demand remains the key factor for sustained recovery

Despite the stronger market outlook, industry participants believe that further gains in PP and PE prices will ultimately depend on downstream demand.

Some manufacturers have reported improving buying interest from end-users, although this has not yet translated into strong order volumes. Most buyers continue purchasing only according to immediate requirements while monitoring potential price increases. Financing constraints and uncertainty surrounding finished product demand continue to keep converters cautious.

The approaching summer holiday season in Europe also remains an important factor, as it typically slows export activity for Turkish manufacturers. Over the coming weeks, market participants will closely monitor downstream orders to determine whether improving demand can support the recent price recovery or whether the market will remain primarily driven by rising feedstock costs.

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