Tight Supply Keeps Turkey Polyolefins Firm Ahead of October

Polyolefin markets in Turkey are heading toward the end of September with supply availability playing a bigger role than production costs. PP and PE prices continued to rise during the month as limited availability became the key factor supporting the market. Despite sharp fluctuations in crude oil prices amid ongoing geopolitical uncertainty in the Middle East, market participants increasingly expect supply-driven increases in October.

Importers continue to report extended delivery times for PP and PE, keeping availability restricted. Strong demand from China and India is also limiting suppliers’ willingness to offer competitively into Turkey, as better netbacks in these markets provide little incentive for sellers to reduce their price expectations.

PP Offers Below $1200/ton Fade

Import homo-PP offers below $1200/ton CIF Turkey have largely disappeared as supply tightens across key origins. A Saudi producer has been absent since last week after completing its September sales, while spot Russian material remains difficult to secure because of extended delivery times.

Russian suppliers have also been prioritizing contractual commitments following earlier production disruptions, further reducing spot availability.

As a result, Saudi and Russian homo-PP offers are now being reported at $1200/ton CIF Turkey or higher, with nearby cargoes reaching as much as $1250/ton CIF. Availability of PP fibre and non-woven grades is reported to be particularly tight.

Market sources also indicated that another Saudi producer had lowered its operating rates because of shipment difficulties, although this information could not be confirmed by primary sources. Shipments from the United Arab Emirates have also faced difficulties.

Limited trader replenishment and weak netbacks are adding to the supply pressure. Middle Eastern sellers have increasingly favored India, where import PP prices have moved above Turkey's levels. At the time of writing, India was trading around $160/ton higher than Turkey even after accounting for the freight difference.

Turkey's CIF import PP prices have also been broadly in line with Middle Eastern PPH offers in China since late August, reducing the country's attractiveness as a destination.

Cost support remains in place despite volatility in Brent crude futures. Europe's October propylene contracts are expected to settle higher, supported by the sharp increase in spot naphtha costs over the past month.

PE Sellers Supported by Asian Demand

PE sellers entered October with a firm stance, supported by strong sales into China and India, where returns have remained more attractive than in Turkey.

US PE offers have been limited since last week, with some market participants suggesting that healthy Asian sales may have reduced pressure on US suppliers to move additional volumes.

Russian and Uzbek PE availability remains tight, while lengthy transit times from the Middle East continue to create concerns among Turkish buyers. Potential US sanctions targeting Iran have added further uncertainty, making buyers more cautious about Iranian PE and potentially reducing the range of available import sources.

Under these conditions, PE prices are expected to remain firm during early Q4. Cost support could strengthen as well, with Europe's October ethylene contracts expected to settle higher after rising naphtha costs outweighed the recent decline in spot monomer values.

Netbacks are also unfavorable for Turkey in the PE market. Middle Eastern LDPE, LLDPE and HDPE film prices in Turkey have been trading around or slightly below Chinese levels. At the time of publication, Turkey's import PE film market was also around $100/ton below India.

October Price Reversal Appears Unlikely

Market participants do not currently expect October to bring a significant change in the direction of Turkey's polyolefin markets. One player expects prices to remain firm, noting that even if logistics disruptions in the Black Sea and Middle East improve, sellers may continue trying to preserve the current momentum.

Turkey's prices are already below several competing markets, which could reduce the likelihood of the sharp seasonal declines traditionally seen in November and December. However, market participants will continue watching geopolitical developments, crude oil movements and the potential impact of upcoming Chinese holidays on regional demand and supply.

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