Turkish demand for polypropylene (PP) could be facing a significant decline following the deadly earthquakes in the important textiles hub of Gaziantep this week. But some traders indicate the region's textiles industry is already gearing up to resume and ramp up production.
Prices for polymers, including PP, have ticked higher so far this week as some buyers have sought to replace lost or delayed volumes and logistics costs have increased. The Gaziantep region is a major convertor of PP into textiles, particularly machine-made carpets for export. Traders say the region accounts for as much as three-quarters of Turkey's homopolymer polypropylene imports, which were around 2mn t in 2022. That would equate to up to 125,000 t/month of demand into the Gaziantep industrial region.
The Middle East is the main supplier to Turkey, with Russia, South Korea, Egypt and Europe also supplying significant volumes. The potential for a significant drop in demand in the short term, combined with logistics issues backing up deliveries, could see some Middle Eastern and Russian suppliers direct more volumes to other markets. This could put pressure on prices in other regions in the current weak demand environment globally.
Yet there are some positive signs emerging that Gaziantep's textiles industry will restart in some form in the near future. The damage within the industrial region has been limited and power supply was restored to factories yesterday. Some convertors indicate that they plan to resume production next week to fulfil responsibilities to customers and are hoping to return to pre-quake levels of output by the end of the month. Whether this will be possible — given challenges around the availability of workers, access to banking facilities and logistics — remains to be seen.
Most of Turkey's polymer imports arrive at the port of Iskenderun, where a fire burned for two days, consuming or trapping previously shipped volumes. Operations at the port are suspended and are not expected to restart until at least March. Traders are diverting volumes to Mersin, another key Turkish port, but it is already operating at capacity. Some transporters have chosen to anchor at Port Said in Egypt, causing extra shipping costs.
