PP, PVC and PE prices continued to decline as the end of May approached. Markets are poised to end the month on a bearish note, driven by weak demand due to inflationary pressures as well as tight liquidity. Meanwhile, market participants have begun to focus on the June outlook.

PPH – CIF Turkey – PVC K67– Import Prices – LDPE – HDPE – LLDPE
Lower buying price leads to rapid slide in price of PP homo

Weak demand due to lower purchasing power and finally calm market continued to drag down import PPH prices this week. Meanwhile, the pace of the price drop has surprised some market participants. "We didn't anticipate seeing such low prices before June," they said. This demonstrates a general stagnation in the market.

Both Saudi Arabia's PP raffia and fiber prices in the low-end segment touched $1,400/ton CIF Turkey in a few transactions. As prices are estimated to be down $80-120/ton from last week, the latest weekly average shows the lowest level in about a year.

This decline is due to a downward trend in the global PP markets, where sellers succumb to persistently slow consumption on the end consumer side. Falling propylene costs coupled with weak demand have pushed Europe's spot market lower, while China's import market has touched below the $1100/t CFR mark due to the effects of the lockdown.

Sellers think prices may be nearing a bottom after sharp drops, on optimism about Shanghai reopening and strong crude oil futures prices. However, sellers' search for a bottom could be hampered by weak downstream markets due to high inflation and lower global propylene costs.

PVC hits new low on persistently weak demand

Similarly, import PVC prices have continued to decline for another week as a combination of a bearish forecast for June and a sluggish construction industry has limited plastic resin purchases to basic demand. The European price of K67 fell to $1820/ton at the end of the week, while the Egyptian and Korean cargoes touched below the CIF $1800/ton mark.

Forecasts remain weak for next month unless demand recovers strongly. A volatile economy and escalating utility costs are likely to maintain pressure on domestic plastic resin consumption, not to mention the impact of an increase in the USD/Lira exchange rate. The ethylene contracts are expected to fall in price in Europe along with the effect of the rainy season on Indian consumption also support this view.

However, Shanghai's planned return from the Covid lockdowns will remain closely watched. Chinese PVC manufacturers, who have been actively exporting their goods in the past few months, could find a way out if domestic demand recovers.

A Turkish market participant said: “Competitive PVC commodities from Russia and China have played a key role in the downward price trend over the past few months while global activity has been affected by inflation. high broadcast. We plan to monitor whether this flow continues towards the end of Q2.”

June PE quotes expected to drop on lackluster demand

PE price has also maintained a downward trend, although the market is more prosperous than PP. Liquidity concerns, eventual market quiet due to inflationary pressures, and lower ethylene prices keep sentiment bearish next month.

Most Middle East quotes are estimated to be down $20-50/ton from last week, to $1800-1830/ton LDPE, $1520-1550/ton LLDPE C4 film and $1480-1500/ton HDPE film CIF Turkey, 6.5% customs duty, cash. New quotes from this region are yet to be announced. Buyers expect sellers to continue to lower prices due to persistent demand uncertainty and a June drop from a major Saudi Arabian producer in China as well as an ongoing slide in prices in China. Europe.

Several market participants have provided price forecasts for next month at $1700-1750/ton LDPE, $1400-1450/ton HDPE and $1450-1500/ton LLDPE C4 film. One producer said: “The increase in the USD/Lira exchange rate and cash restrictions may continue to affect domestic plastic pellet consumption. We will observe export activity under global inflationary pressures.”