Turkey had become used to double digit growth in demand for plastics and chemicals, sucking in imports from Europe and Asia. No longer. Here is chemicals content of the report, just out:
"While 2009 will be a terrible year for the Turkish petrochemicals market, we maintain that the country remains among the best positioned economies in emerging Europe to recover in late 2010. We hold to the view that H109 will be the trough of the current recession. With the economy set to grow 1.7% in 2010 with a concurrent recovery, BMI forecasts a strong rebound in petrochemicals. Two key industries consuming petrochemicals – the automotive and construction sectors – will see growth of 8% and 3.6% respectively in 2010, with higher rates of growth thereafter. This should help support the development of Turkey’s downstream industries and give a boost to Petkim, its customers and other Turkish petrochemicals and plastics producers as the industry expands capacity.
By the end of 2009, petrochemical capacities are forecast to include 420,000tpa of PE, 150,000tpa of PP, 150,000tpa of PVC and 520,000tpa of ethylene. The economic downturn will have a highly negative impact on petrochemicals output in 2009, particularly given the importance of the automotive industry as one of its chief consumers. It is believed the days of 15%+ annual growth in polymer demand seen in recent years will come to an end, and expect a contraction in the market. Plastics production capacity reached around 5.6mn tpa in 2008 and was forecast to reach 6.5mn tpa in 2009, 11.3mn tpa in 2013 and 13mn tpa by 2014. However, the plastics industry will be impacted by the raising of import tariffs on petrochemicals from 3% to 6.5%. Although providing local producer Petkim with some protection from foreign competition, the new taxes will make it more expensive to import the raw materials needed for plastic production. Turkey is dependent on foreign raw materials for its needs, with 84% imported in 2007. On a positive note, the Turkish Plastics Industry Association has reported that plastics exports increased 25% in 2008 to reach US$43.7bn.
Plastics accounted for roughly 27% of total chemicals exports, with the main export markets being Russia, Romania, Ukraine, Iraq and Germany. The report forecasts plastics production capacity not exceeding 9mn tpa. For some polymers, Turkey’s needs have to be covered largely by imports, with PVC 81% imported, PP 87% and HDPE 80%. In the case of LDPE, local production met 62% of needs in 2007. The share of domestic producers will rise in 2009, although this is in the context of a decline in overall sale volumes."