Import PPH breaches $1400 CIF, copolymer orders from South Korea cancelled
Homo PP prices for import origins subject to 6.5% customs duty moved above $1400 CIF Turkey, with raffia and BOPP deals reportedly concluded at these levels last week amid scarce availability caused by Hormuz Strait disruptions and war-related surcharges. South Korean production issues, particularly naphtha-related outages, prompted cancellations from PP block copolymer suppliers, further tightening supply. Locally, raffia and injection grades surpassed $2000/ton inc. VAT, while high MFI PPBC grades climbed to $2200/ton, reflecting both robust demand for prompt cargoes and limited distributor inventories. Meanwhile, Petkim continued to offer material amid robust demand, keeping its sales in a controlled manner amid stock management.
A sack converter commented, “Some raffia deals were concluded at $1420–1450 CIF. Market participants increasingly point to April as a critical juncture, as Jeddah port is expected to face severe congestion with cargoes diverted from across the Gulf. With multiple suppliers—including those from the UAE—seeking to reroute shipments via Saudi Arabia, the port’s capacity is likely to be stretched beyond its limits, exacerbating delays. Even in the event of an immediate ceasefire, players anticipate that logistical disruptions will persist for at least two months. Against this backdrop, serious questions are emerging over the sustainability of purchases at such elevated levels and how buyers will manage the growing strain on cash flow.”
US PE sources take advantage of fewer import sources
Polyethylene imports faced similar constraints. Shutdowns and force majeure declarations across Middle Eastern producers, alongside logistical bottlenecks, kept volumes tight. US PE, taking advantage of fewer competing offers, surged sharply: LDPE moved above $1600 CIF Turkey, while LLDPE C4 film and multiple HDPE grades breached the $1300 CIF mark. Domestic producer Petkim raised LDPE by another $100/ton on Monday, bringing total March increases to $410/ton, amid limited local stocks and high demand for immediate material. The company continued its sales in a controlled manner.
No relief on the near horizon, duration of war critical
Market sentiment remains bullish for both PP and PE under current circumstances. Traders expect prompt cargoes to see further hikes unless large post-holiday volumes return to the market. Many buyers are reportedly shutting their factories temporarily to digest the recent rally, weighing the potential for passing steep resin costs onto finished products. Global supply-side constraints, surging freight and insurance costs, and tight feedstock availability are likely to sustain upward pressure, keeping Turkey’s polyolefin markets firmly on an elevated trajectory into April.
Remembering pandemic peaks of 2022
At the time of writing, weekly averages from ChemOrbis Price Index indicated that PP and PE prices—both import and local—have reached their highest levels since May–June 2022.
The latest wave of sharp increases has revived memories of the March 2021 rally, when markets surged on the back of a post-pandemic demand boom. At the time, Saudi Arabian PP raffia and PPBC injection grades climbed to as high as $1915/ton and $2045/ton CIF Turkey, respectively, before reversing course. Local raffia and PPBC prices respectively peaked at $2246/ton and $2458/ton, excluding VAT.
In PE, Middle Eastern LDPE, LLDPE C4 film, and HDPE film reached $1960/ton, $1665/ton, and $1615/ton CIF Turkey, respectively. Local PE prices peaked at $2288/ton for LDPE, $1953/ton for LLDPE C4 film, and $1712/ton for HDPE film, not including VAT.
Unlike the post-pandemic period, however, today’s rally is not supported by a real demand boom. Instead, tight cash flow and modest derivative demand in Turkey contrast sharply with the severe supply disruptions triggered by the closure of the Strait of Hormuz, which have rippled through both upstream and downstream chains.
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