Rising Costs Drive Further PP and PE Gains in Turkey as Supply Remains Tight

Turkey’s PP and PE markets have carried their upward trend into September, with sharply higher energy costs adding strength to the supply-driven rally that began in mid-July. Brent crude futures moved above the key $100/bbl level by midweek and climbed beyond $105/bbl on Thursday, strengthening suppliers’ cost-based arguments and leaving limited scope for concessions on imported cargoes.

Persistent logistics disruptions, extended lead times and restricted availability from several origins have also kept the supply situation supportive. This has allowed suppliers to pursue further price increases despite the absence of a broad recovery in downstream demand.

Some buyers have continued to secure limited volumes amid consecutive hikes, but higher replacement costs and tight supply have largely kept sellers in control. Rising imported polyolefin prices in China, Vietnam and India, particularly LDPE, have provided additional support and outweighed the slow recovery in Europe following the summer break.

PP Prices Rise Further on Higher Costs and Tight Supply

Import PP prices moved higher again this week, with the renewed increase in crude oil adding further support to a market already facing restricted availability due to war-related disruptions. Rising production costs have encouraged suppliers to maintain their upward targets, while weak netbacks in Turkey have continued to discourage aggressive offers from regular overseas sellers.

Logistics remain a key factor behind the bullish market. Disruptions and extended delivery times for seaborne Middle Eastern cargoes, combined with limited Russian spot availability, have tightened supply. Prompt and nearby cargoes are therefore commanding premiums, leaving buyers with fewer alternatives despite increasing resistance to higher prices.

However, demand remains an important factor for the continuation of the PP rally. Some converters are reluctant to build large inventories after the sharp recovery from summer lows, particularly as downstream margins remain under pressure and liquidity is tight.

Nevertheless, limited seller inventories are reducing the incentive to offer significant discounts. As a result, some buyers have returned to the market to cover their requirements during the early days of autumn.

Saudi Arabian PPH raffia prices on a CIF Turkey-equivalent basis currently stand only $10/ton above Middle Eastern raffia and injection offers in China, highlighting the upward pressure on the Turkish market.

PE Rally Expands as LDPE and HDPE Supply Remains Tight

The PE market has also continued to strengthen in September, although price gains vary across grades. LDPE and HDPE film remain the most supported products because of tight local and import availability.

The latest rise in crude prices has further strengthened the overall pricing environment, giving Middle Eastern and US suppliers greater support for higher targets. Tight availability has also narrowed the price gap between US and Middle Eastern material, with US offers moving above Middle Eastern levels for some grades. Limited supplies from Russia and Uzbekistan have further reduced buyers’ options, particularly for HDPE.

Market participants reported that US LLDPE C4 film reached $1,100/ton CIF or higher this week, compared with transactions at $1,060–1,080/ton last week. HDPE film is currently trading at a significantly higher level than LLDPE.

Local PE availability is also benefiting from the tighter supply environment, as rising replacement costs and uncertain delivery schedules have made distributors cautious about rebuilding inventories. Market participants also pointed to temporary production problems affecting certain LDPE grades at domestic producer Petkim, which has generated additional buying interest during September.

As a result, buyers may find it difficult to obtain discounts on prompt LDPE and HDPE film, even with downstream demand remaining uneven. However, the rapid accumulation of gains since mid-July could eventually test converter resistance, particularly in LLDPE.

For now, the combination of higher crude oil prices and persistent supply constraints continues to favor sellers, suggesting that the September rally could maintain its momentum unless energy prices reverse sharply or stronger buyer resistance limits further increases.

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