Turkey declared state of emergency worries Asia petchem sellers

As Turkey government put the country on three months emergency state after the failed coup attempt last Friday, the World Bank expected to see a slow down in economic activities and growth in the months to come. For this, players are anticipating reduced buying appetite from end consumers in certain industries such as automotive and appliances. Experts are saying that, “If that polymer does not find its way into Turkey right away, it might bounce back and affect prices in other markets.”

This indeed has worried many international producers who are active in selling to Turkey market. In a discussion with an Asian producer, the source said, “At the moment, we have not been able to confirm if maritime transportation would be affected, though this is at the center of our concern too since Turkey is one of the biggest PP export destinations for us. In the past few months we are not having large export allocation, yet we might need to scout for other markets if situation in Turkey become unfavorable.”

Another regional producer added, “We have not been able to achieve satisfactory sales to Turkey in the past couple of months due to the Ramadan season and poor margins. However, the current political turmoil in the country might impact general demand in the near term, which means there is a possibility that Middle Eastern producers might switch their attention to other markets.”

Korea is having a free trade agreement with Turkey and is the third largest petrochemical exporter to the country in 2015. Sellers here are particularly concern about a possible trade flow disruption due to Turkey’s political crisis. Players in Asia therefore are speculating on increasing Korean cargoes to be diverted to the region in the near to medium term. The impact of Turkey’s political turmoil on petrochemical industry remains uncertain, hence players are monitoring the situation closely to gauge the likely outcome.