New Market Research Report: Turkey Petrochemicals Report Q3 2016


Recently published research from Business Monitor International, "Turkey Petrochemicals Report Q3 2016", is now available at Fast Market Research



[ClickPress, Tue Jun 14 2016] A weak lira at a time of lo w oil prices should benefit the Turkish petrochemicals industry, which is showing significantly improved profitability. Growth will be led by the export-oriented automotive industry, while other sectors such as construction will languish.

Capacity growth in ethylene and purified terephthalic acid (PTA) in 2014 had little effect on overall petrochemicals production growth in 2015, with Turkish petrochemicals producer Petkim's output totalled 4.84mn tonnes, down 1.6% year-on-year (y-o-y).

Overall growth rates appeared unaffected by the ramping up of production at Petkim's expanded ethylene plant. This increased capacity from 520,000 tonnes per annum (tpa) to 600,000tpa and the concurrent increase in PTA capacity from 70,000tpa to 105,000tpa has helped lift chemicals output and provided cheaper feedstock for polymers production.

The end of Iranian sanctions could lead to a downward pressure on product prices due to extra supply on the regional market, but slim margins may prompt Iranian exporters to look for more profitable trades elsewhere, particularly Europe. However, some players think the situation may change towards mid-2016.

Full Report Details at
- http://www.fastmr.com/prod/1182927_turkey_petrochemicals_report.aspx?afid=301

The market will demand lower prices even in the context of an increase in market activity. The Turkish lira is currently weak against the US dollar, which has made it expensive for Turkish buyers to import material, resulting in lower bids which pressure producers to lower their offers. Instead, the market may see an increase in cheaper US product, although this will be subject to longer delivery times and add to the bearish sentiment in the market which is reducing buying appetite and bringing prices down.

Petkim has established its export targets to 2018 with the aim of raising revenue from USD110mn in 2015 to USD155mn in 2016, USD175mn in 2017 and USD200mn in 2018. Although this almost doubles the value of exports over three years, compared with other producers in the region it will remain a relatively minor regional player.

Turkey sits in 12th place in BMI's Europe Petrochemicals Risk/Reward Index this quarter, with a score of 49.5 out of 100, unchanged since the previous quarter. There is no likelihood that it will climb the rankings over the coming quarters due to its relatively poor risk levels and the current comparatively low level of capacities, which limit both risks and rewards. Security risks will remain a major concern for investors, but logistics issues and an unstable policy trajectory will also weigh on the wider business environment.

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