Likely increase in import duties in 2014 triggers panic buying among Turkish PVC consumers

17-Dec-13

Turkish PVC consumers are panic-buying over increased import duties likely to hit the market from 2014, said Cemal Pamuk, president of Turkish trading company Nepa Chemicals, as per Platts."We are already seeing a sort of panic in the PVC market. Clients don't want to pay extra so there is pressure to buy now," he said. The Turkish PVC market is anticipating a hike in import duties on Iranian and Mexican product from 3% to 6.5% as of January 1. Although the news has not yet been made official by the Turkish government, the market has been informed by government officials, he said. A rise in Iranian and Mexican import duties will impact price competition among suppliers for the PVC market, said Pamuk. Turkish customs tariffs for linear low polyethylene (LLPE) and Copol polypropylene are expected to increase from 3% to 6.5% for all imports from the Persian Gulf countries, such as Saudi Arabia as of January 1. However, other grades, such as low density polyethylene (LDPE), high density polyethylene (HDPE) and homo polypropylene will not be affected as the import duty on these is already 6.5%, Pamuk said. While Turkey imports the bulk of its PP and PE from the Persian Gulf, it imports PVC from a wider selection of suppliers, including Egypt and Europe, which will remain duty free, the US, which is already subject to 6.5% duty, and Mexico and Iran, which are likely to see a hike in duty from 3% to 6.5%. "The US will be positively affected as they are already on 6.5%. Ineos, as the biggest European company [supplying into Turkey], will also have a big advantage. Egypt is also duty free and they will have an even bigger advantage," said Pamuk. Egyptian cargoes are closer, the transit time is shorter and the quality is adequate for PVC pipe and fittings customers, an industry source said.