PE markets in China and Turkey were under intense pressure from very competitive Iranian offers, particularly for HDPE film and b/m, since mid-May. Aggressive prices from Iranian producers formed the low ends of both markets for the above-mentioned products as they failed to achieve smooth sales to China, the largest PE importer in the world.
Both Turkey and China continued to see lower price levels this week given seasonal factors that limit demand and comfortable supplies for most PE grades. However, the number of aggressive Iranian offers in China has thinned out this week while Turkey's previous low ends of the HDPE market formed by Iranian sources have faded recently.
In China, where PE prices maintained their softening trend due to collapsing energy costs and high stocks, large traders are said to be not able to receive the previous low ends directly from Iranian sources this week particularly for LDPE.
According to sellers in China, trading activities are very slow as the high season for manufacturing has finished. Plus, futures market, ethylene costs and crude oil prices are all down. There are still competitively-priced cargoes for different origins such as Russian, Mexican and Iranian, exerting pressure on the market; however, the pressure from Iran is not as visible as before since traders do not seem to be that aggressive any longer and there is a reduced number of offers for Iranian cargoes.
In Turkey, some players also claimed that they have not heard the previously aggressive prices for Iranian HDPE materials so far this week. Overall demand is still silent during Ramadan with no supply concerns being voiced. However, Iran must have found some relief in terms of stock pressure following very attractive prices and deals reported both in Turkey and China.
A trader in Turkey said, "The previously attractive prices for Iranian HDPE seem to have become scarce recently. Yet, the market remains on the weaker side due to unsupportive upstream costs and weak global PE markets including China and Europe, where prices are down further for June."
A converter in Turkey confirmed receiving slightly firmer prices from his Iranian suppliers for new shipment cargos. "One of the mainstream producers in Iran returned from a maintenance shutdown and is not willing to step back for LLDPE. We don't expect the Qatari crisis to affect Turkey much so long as Iranian availability continues to feed the market, meanwhile," he said.