Turkey Continues to Lose Conflict-Driven Premiums: What Lies Ahead for PP and PE in June?

Polyolefin markets in Turkey continued to weaken ahead of the extended Eid holidays as poor demand, liquidity issues, and weak export performance kept pressuring both PP and PE markets despite ongoing supply disruptions in the Middle East and around the Strait of Hormuz.

Market sentiment also softened after news emerged that some regional production units had resumed operations, easing part of the earlier supply concerns.

Sellers across PP and PE markets adopted more competitive pricing strategies in an attempt to stimulate limited buying activity before many converters reduce operating rates or temporarily shut operations during the holiday period.

Although high freight costs, logistics risks, and regional outages still provide theoretical support to the market, buyers largely remained focused on hand-to-mouth purchasing. Some converters were also seen selling excess inventories as downstream orders weakened compared to the early stages of the Middle East conflict.

PP market faces stronger pressure amid weak demand

In the polypropylene market, buyers pushed back harder against high prices as demand conditions continued deteriorating through the second quarter. Suppliers from Saudi Arabia, Russia, and Europe lowered offers by mid-May after earlier attempts to maintain elevated levels failed amid tight cash flow and slowing downstream demand.

Converters prioritized preserving liquidity instead of building inventories before Eid, with many reducing production rates due to insufficient orders from end-product sectors.

Among PP grades, PPBC injection recorded the steepest correction over the last four weeks, while PPH fibre and raffia grades also moved lower. Despite the recent declines, PP prices still remain significantly above pre-war levels due to the strong rally seen during March and April.

The recent correction indicates that part of the conflict-driven premium has started fading, although ongoing supply concerns and higher replacement costs continue keeping overall market levels historically elevated.

At the same time, fears of severe shortages have eased in recent weeks as some Saudi and UAE producers resumed operations and inventory-based sales became more available in the market.

PE market also weakens before Eid holidays

The polyethylene market remained under pressure from sluggish buying interest and weak downstream profitability.

European LDPE suppliers returned to the Turkish market with more aggressive pricing, while competitively priced US-origin cargoes continued pressuring sentiment.

Even though some Middle Eastern capacities are still offline and regional arbitrage dynamics remain unstable, buyers in Turkey showed limited interest as weak domestic consumption and poor export competitiveness continued affecting converters.

US-origin HDPE and LLDPE film grades recorded sharper corrections compared to Middle Eastern material, especially after aggressive Chinese-origin deals increased pressure on the market.

Despite recent declines, PE prices still remain far above levels seen before the Middle East conflict began, reflecting the massive gains accumulated during the earlier rally phase.

Market remains cautious for June outlook

Looking ahead, sellers hope market activity may improve after the Eid holidays, while buyers expect additional price reductions if demand recovery remains weak.

Many market participants believe the conflict-driven rally is still correcting, leaving room for further downward adjustments in both PP and PE markets.

Converters returning from the Interpack Fair in Düsseldorf also highlighted growing competition from cheaper Asian finished goods in European export markets, adding more pressure on Turkish manufacturers.

Still, supply-side risks have not disappeared completely. Ongoing outages in the Middle East, freight volatility, rerouting risks, and continued uncertainty surrounding the Strait of Hormuz are expected to prevent any sharp collapse in PP and PE prices.

As a result, the Turkish polyolefin market is likely to remain caught between fragile supply conditions and heavily weakened demand as the industry moves into the summer season.

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