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2019.08.12Turkish polyethylene (PE) prices are at their lowest levels since ICIS began publishing prices in 2014.
PE prices mostly fell again this week following further rollovers to lower offers from suppliers.
Buying interest remains limited and suppliers have continued to discount prices in an attempt to encourage purchases.
US producers are leading the current trend, cutting high density polyethylene (HDPE) prices, in particular, this week. They had previously pushed linear low density polyethylene (LLDPE), presumably because further HDPE capacity is due this year.
Iranian sellers have also become increasingly desperate. This follows the reimposition of US sanctions in 2018 and the increasing competition for market share following recent capacity expansions.
Since demand in China has fallen away, Iranian sellers have implemented aggressive price discounts, although this has failed to revive Turkish buying interest.
In the past, because sanctions were only loosely enforced, buyers could find ways to work around the restrictions. However, the Trump administration has been far more active in ensuring that the sanctions are adhered to - making Iranian material especially unattractive.
The Turkish economy has shown some positive signs in recent weeks, with the lira continuing to recover after the recent decision by the country's central bank to cut interest rates.
Despite this, completed deals have been minimal and buyers remain cautious heading into the Eid ul-Adha holiday period.
HDPE film prices were heard down to $890/tonne for US origin material, although this could not be confirmed with the wider market.
Iran has traditionally been a large supplier of HDPE into Turkey and may be forced to cut its offers to compete.
The LLDPE high end has fallen, but the low end remains static, suggesting a reluctance to cut prices any further, at least for now.
Demand traditionally picks up in September, and therefore some players expect prices to hit the bottom sometime this month.
