Turkey Polyolefin Sellers Turn Firmer Ahead of August as PP and PE Outlook Improves

Sentiment in Turkey’s polyolefin markets strengthened further this week after stabilizing last week on the back of higher production costs. Several suppliers have already increased their August import offers for homo PP and PP copolymer grades, while stronger US-origin offers have started to lift the PE market. Domestic producer Petkim has also reinforced its pricing policy as buying interest gradually improves.

Adding further support to the market, Brent crude oil futures climbed above $95/bbl on July 23 following the escalation of the US-Iran conflict, boosting expectations for firmer August olefin contract settlements in Europe.

PP market supported by stronger China and rising propylene costs

The recovery in China’s PP market, combined with relatively tighter supply and firmer propylene prices across Asia, has encouraged suppliers to adopt a more confident pricing strategy for August shipments into Turkey.

After several months of uninterrupted price declines, producers are increasingly reluctant to repeat the lows seen earlier, arguing that higher feedstock costs and improving market sentiment across Asia have significantly reduced the scope for further discounts. Although many buyers continue to approach the market cautiously because of weak downstream demand, suppliers have started announcing higher August offers for homo PP and PP copolymer grades.

Market participants also reported that a Saudi Arabian producer was expected to increase August offers by $50/ton or more. Another supplier noted that stronger buying interest from India, Africa and Gulf countries helped sell out its July allocation, allowing the producer to implement price increases for August shipments.

US-origin PE offers lead the market higher

The first signs of recovery in Turkey’s PE market have come from US-origin material. After consistently offering the lowest prices in previous weeks, US suppliers either suspended official offers or increased prices above the $1000/ton CIF Turkey level for LLDPE C4 film and HDPE film.

This change has strengthened expectations that Middle Eastern suppliers will also raise August offers as higher crude oil and ethylene costs continue to increase production expenses. Competitive pressure has also eased because many suppliers have already sold out their July allocations following stronger demand from Asian buyers, making the August outlook considerably more positive than it was only a few weeks ago.

At the same time, some converters expressed concerns after the European Union removed its 6.5% import duty on US-origin PE. They believe the decision will allow European manufacturers to source lower-cost US resin while continuing to export finished products duty-free, potentially reducing the competitiveness of Turkish manufacturers in European markets.

Market participants also warned that greater availability of US PE in Europe could encourage regional producers to redirect more locally produced material into Turkey, increasing competition. A major exporter suggested that Turkey should consider adopting a similar policy in order to maintain a level playing field for domestic manufacturers.

Domestic market gains momentum

The stronger sentiment has also spread to the locally held market, where distributors have started firming offers as prompt availability becomes tighter. Following weeks of inventory liquidation and heavy discounting, lower-priced stocks have largely been exhausted, allowing traders to raise prices in an attempt to recover part of the losses suffered during June and early July. Some market participants reported weekly increases of up to $100/ton.

Domestic producer Petkim has also reflected the stronger market by increasing prices for PP and HDPE grades. Meanwhile, LDPE continues to show a positive outlook due to improving demand, limited CIF availability and expectations of €150/ton increases from European suppliers.

A PE converter noted that distributors are becoming more confident because traders avoided building large inventories during the recent market downturn, while buying activity has improved over the past two weeks, leading to tighter prompt supply.

Demand remains the key factor

Despite improving sentiment, most market participants agree that the sustainability of higher PP and PE prices will ultimately depend on downstream demand.

Some manufacturers have reported increased inquiries from end users, although these have yet to translate into strong order volumes. Most resin buyers continue purchasing only for immediate requirements to protect themselves against possible price increases, while financing difficulties and uncertainty surrounding finished product demand continue to limit purchasing activity.

The approaching summer holiday season in Europe, which typically slows export business for Turkish manufacturers, also remains an important factor. Market participants will therefore continue monitoring downstream orders closely to determine whether stronger demand can support the current price recovery or whether the recent gains will remain mainly driven by higher production costs.

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