PVC Loses Much of Its War Premium as Oversupply and Weaker Costs Weigh on Turkey

Turkey’s PVC market remained under significant pressure this week as weakening feedstock costs, improving geopolitical sentiment, and ample supply continued to drag prices lower. The sharp retreat in crude oil prices, coupled with softer naphtha and ethylene markets, has removed much of the cost-based support that fueled PVC’s rally during the Middle East conflict.

In the import market, buyers pushed for lower levels amid expectations of further declines. Discussions increasingly centered on sub-$800/ton CIF levels for dutiable PVC K67, particularly for US-origin material. Some processors indicated target buying levels as low as $770/ton CIF, reflecting the increasingly bearish mood across the market.

The duty-free segment also softened further. European PVC offers were reported around $940-950/ton CIF Turkey, but these levels generated little buying interest. Market participants noted that continued weakness in Europe’s upstream chain could encourage suppliers to lower offers further, potentially bringing prices closer to the $900/ton CIF mark in the coming month.

While Chinese-origin material also faced downward pressure, higher container freight rates from Asia helped limit the pace of declines. Rising logistics costs offset part of the reductions in Chinese export offers, preventing a more aggressive correction. Nevertheless, many traders agreed that freight has become the market’s only meaningful source of support as crude oil, naphtha, and ethylene prices continue to move lower.

Supply conditions remain comfortable across Turkey. Local distributors have been offering larger discounts to attract buyers, while expectations surrounding Petkim’s planned restart have added to confidence that material availability will remain sufficient. Combined with weak demand, this has reduced the urgency for processors to replenish inventories.

As a result, domestic PVC K67 prices moved lower again during the week. Local assessments fell by around $40/ton compared with the previous week, reaching fresh lows near $1200/ton ex-warehouse, cash, including VAT.

Demand remains a major concern. Buyers continue to purchase only for immediate requirements, while some processors have reportedly begun reselling resin into the spot market, highlighting the extent of supply length. This trend has further weakened sellers’ bargaining power and reinforced expectations of additional price erosion.

Looking ahead, most market participants expect the bearish trend to continue into July. The easing of tensions in the Middle East and expectations for smoother petrochemical trade flows through the Strait of Hormuz have removed a large portion of the geopolitical premium from feedstock markets. At the same time, oversupply conditions within Turkey and the approaching summer holiday season in Europe are expected to keep demand subdued.

Although a few traders believe that even a modest improvement in buying activity could slow the pace of declines, the broader market consensus remains cautious. Unless demand recovers more meaningfully, PVC prices are likely to remain under pressure in the coming weeks.

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