Middle East players face stiff competition in polymer markets of Turkey

10-Dec-14

Middle East polymer players are facing stiff competition in Turkey, which, in recent years has attracted a host of suppliers and distributors due to high margin offerred, industry sources said in ICIS. Due to its proximity to the region, Turkey is a major market for Middle Eastern suppliers, especially during times of weak demand in Asia and in other parts of Europe. The Turkish market used to account for over 25% (2 mln tons) of the Gulf Cooperation Council’s (GCC) chemical exports to Europe in 2012, according to the Gulf Petrochemicals and Chemicals Association (GPCA). “Turkey no longer offers high netbacks for producers. We are seeing more intense competition in the market,” said a source close to a Middle East supplier. However, provisional data from Turkish statistics agency Turkstat in the first 10 months of 2014 showed that Azerbaijan, Israel and Romania feature in the top 10 exporters of PE to Turkey, along with European countries such as Germany, Spain and Belgium. Saudi Arabia – the only Middle Eastern country in the list – ranks as Turkey’s fourth biggest PE exporter. Competition has led to a sharp decline in spot PE prices in Turkey, substantially narrowing the gap in offers between this market and China – another major market for Middle Eastern polymer producers – over the past two years. Offers for Middle East polypropylene (PP) and low density polyethylene (LDPE) to the Turkish market were US$140-225/ton higher than those to China in 2012, but this gap has since narrowed to US$42.50-75/ton as of end-November 2014, according to ICIS data. For the week ended 3 December, prices for PP homopolymer raffia from India and the Middle East were assessed at US$1370-1400/ton CFR (cost and freight) Turkey, while LDPE film of Middle East origin was assessed at US$1400-1430/ton CFR Turkey, according to ICIS.