Turkey’s EPS Market Rebounds in August, Further Increases Expected

Turkey’s EPS market moved into positive territory in August, ending a three-month period of declining prices. Higher upstream costs, supported by renewed Middle East tensions and a sharp rise in global oil prices, created the conditions for substantial price increases. Market expectations are now turning toward further gains in September if production costs remain close to current elevated levels.

For August, domestic white EPS prices increased by $140/ton from July. Regular-grade material was assessed at $1,800-1,850/ton, while non-flammable grades stood at $1,830-1,880/ton, on an ex-warehouse Turkey equivalent, cash basis, excluding VAT. Meanwhile, local black/gray EPS offers reached $2,200/ton FD Turkey, representing a significant monthly increase of $250/ton.

The sharp rise was mainly driven by stronger spot styrene prices. Spot styrene on an FOB NWE basis has increased by nearly $200/ton compared with last month, providing substantial cost support to EPS suppliers. The direction of crude oil and its impact on feedstock markets will remain crucial in the coming weeks.

If styrene prices continue to hold firm, EPS suppliers are likely to seek additional increases in September. However, the size of any further hike will depend largely on demand and suppliers’ ability to pass higher costs on to buyers. The return of European market participants from the summer holiday period may also provide a clearer indication of market direction.

Market sentiment has already become more bullish, with some participants expecting domestic EPS suppliers to pursue increases of $150/ton or more next month if current spot styrene levels persist. Whether such hikes can be achieved will depend on the sustainability of the upstream rally and the strength of downstream demand and derivative orders during the later part of the third quarter.

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