Polyolefin players will leave their desks for Eid al-Adha holiday soon after wrapping up their June PP and PE businesses with monthly hikes in Türkiye. The culprit behind the gains were soaring shipping costs amid container shortages and a lack of space in vessels, rather than a brisk demand from downstream sectors.
In the meantime, European cargos found their way to Türkiye more visibly compared to the previous months. Prior to the summer holidays, which typically points to waning resin demand in Europe, these volumes grabbed buying appetite from Turkish converters, regardless of their prices, due to their delivery advantage.
Long lead times for Middle Eastern LDPE deter buyers
Escalating import PE prices from the Middle East did not catch players’ surprise this month. Tightening availability for certain LDPE grades, mainly general purpose (G03-5), amid previous plant turnarounds and longer delivery terms stemming from the Red Sea issue triggered jitters among players by late May, driving bullish expectations. Indeed, the sentiment for LDPE was stronger than LLDPE and HDPE film due to more supportive supply-demand conditions and Türkiye’s poor netbacks to Asian LDPE markets.
Nonetheless, transit times of up to 70-90 days caused converters to take a cautious approach amid the holiday lull and blurry demand outlook in derivative segments. Thusly, an increasing number of manufacturers preferred to turn to nearby LDPE cargos, including European and Iranian volumes, if not to the local producer, Petkim.
Buyers commented, “We find it risky to engage in CIF cargos due to late arrivals. Transit times for Middle Eastern materials have been as long as distant American cargos. It would cost us a lot if the price trend turned bearish at the time when these cargos arrived.”
European LDPE sellers focus on exports prior to summer break
Middle Eastern LDPE film offers were assessed steady from last week at $1170-1200/ton CIF Türkiye, subject to 6.5% customs duty, cash. A supplier source confirmed resistance to dutiable prices above the $1200/ton CIF Türkiye threshold, saying, “Tight import volumes from Middle Eastern suppliers, coupled with rising buying interest from Turkish players for nearby origins, attracted European LDPE producers to the market.” LDPE deals were reported at around €1200-1230/ton ($1285-1317/ton with recent parity) CIF, no duty for various European origins.
A manufacturer said, “European suppliers provide fast shipments as they are willing to conclude their export business before the summer holidays kick off. We preferred to secure some LDPE G03-5 volumes, with arrival in July.”
According to data from ChemOrbis Stats Wizard, Türkiye imported slightly more than 115,000 tons of European LDPE in 2023, accounting for 32.5% of the total volume.
Absence of Asian sources stimulates demand for European PP
Although not as visible as for PE, some European PP volumes were traded amid rising interest in nearby cargos from buyers. A global PP producer confirmed selling some European raffia and fibre materials at €1180-1200/ton ($1263-1285/ton with recent parity) earlier this week, with a company source noting, “We realized rising demand from our customers for cargos with delivery in August regardless of high prices in tandem with reduced Saudi and Russian stocks. We have limited quotas for exports, and our list prices may see renewed gains next week.”
A pipe maker reported securing some European PPRC type 3 this month at €1200/ton ($1285/ton) CIF, no duty before fresh offers neared €1300/ton ($1391/ton). “We wanted to hedge against possible price hikes stemming from disrupted shipments from South Korea amid tripled shipping costs from Far East Asia, let alone container issues,” he said.
Supply curtailments in South Korea took its toll on Türkiye’s PP copolymer market, in particular. Although demand had not been buoyant prior to the Eid al-Adha holiday, reduced availability paved the way for higher import prices for dutiable origins and provided sellers with leverage to stay adamant at their price levels.
According to data from ChemOrbis Stats Wizard, Türkiye imported nearly 200,000 tons of European PPH in 2023, accounting for around 10% of the total volume. As for PP copolymer, imports from the bloc stood at approximately 150,000 tons with a share of 32.5% in total imports.
