New Market Study Published: Turkey Petrochemicals Report Q3 2014

The short-term outlook for the Turkish petrochemicals industry is challenging, with the depreciation of the lira and the rising cost of credit dampening domestic demand, but export growth and low stocks should help lift demand in H214.

The pace of polymers growth will be partly determined by the strength of the export-oriented automotive sector as well as the domestic construction industry. Although we have revised down 2014 GDP growth forecast for Turkey from 2.6% to 1.5% and the lira may not have ended its depreciatory run, there are upsides.

Demand for major polymers declined in Turkey owing to the fall in domestic currency in the first few months of 2014. A few domestic polyethylene converters have suspended production lines and major domestic petrochemicals producer Petkim has stopped producing at full capacity due to payment issues prompted by an interest rate hike. BMI believes this trend will be reversed through H214 as stocks are depleted and orders increase.

Full Report Details at
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* Local producer Petkim has been able to counter a decline in sales by successfully reducing costs through cuts and efficiency savings, while running plants at an overall capacity utilisation rate of around 83%. As a result, while its revenue declined 4.4%, its net income nearly doubled to TRY49mn.
* We still believe growth will slow sharply over the next several quarters. All categories of GDP by expenditure are developing broadly in line with our expectation of growth of just 1.5% in 2014. Private consumption is set to see the most prominent decline on the back of a sharp slowdown in consumer credit, which will impact negatively on demand for plastic goods and packaging.
* On the upside, industrial production has remained resilient, with average year-on-year growth of 5.3% in Q114. This is in line with our forecast for a relatively strong export performance on the back of lira depreciation and external demand recovery in the EU. As such, growth in the petrochemicals industry as well as the local...

The Turkey Petrochemicals Report has been researched at source, and features Business Monitor International (BMI)'s market assessment and independent forecasts for key petrochemicals sub-sectors. The report also analyses the impact of regulatory changes, recent developments and the background macroeconomic outlook and features competitive landscapes comparing companies by products and services, sales, market share, investments, projects, partners and expansion strategies.

BMI's Turkey Petrochemicals Report provides industry professionals and strategists, sector analysts, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Turkish petrochemicals industry.

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