Turkey is importing polymers at record levels in 2023, in apparent contrast with the weak market sentiment. Imports reached record levels on an outright and a net basis in the first quarter of the year, and monthly data for April and May show that trend continuing.
In the first five months of 2023, polymer imports across polyethylene (PE), polypropylene (PP) and polyvinyl chloride (PVC) were 4pc higher than a year earlier. PE imports show the strongest upwards trend, growing by 12pc. PP imports have slipped back 7pc from the same period of 2022 but are still 14pc higher than 2019, pre-Covid.
This is a reminder that despite facing economic challenges around inflation and a weakening currency, Turkey is a growing economy and that means growing demand for polymers. Turkey's gross domestic product (GDP) growth was 5.6pc in 2022 and while the OECD's forecast for 2023 has slipped to 3.6pc this is still better than many countries. Reconstruction efforts after the devastating earthquake in February are likely to offset the initial hit it gave to the economy.
And trade data refute the idea that Turkey is importing more polymers just to re-export. There has been an increase in export activity, but net polymer imports are still higher.
There has been a certain amount of inventory build, certainly in late 2022 when global prices had decreased and some felt were near a bottom. Anecdotally, warehouses are understood to be very full, yet the data to May show few signs that imports have been curtailed. If demand was fundamentally weak and inventories full, this should to begin to show in lower imports. Yet polymer imports were 511,000t in May, the second highest of the year after March and 73,000t above the same month in 2022.
But trade data may not tell the whole story. It is likely that underlying demand is better and has been masked by availability of supply from a global market that is long and is continuing to add more PE and PP capacity than is needed. Buyers have no problem with availability and with a growing imports market being shared between a larger number of suppliers, many are not seeing the benefits of prices that have remained under strong downwards pressure until recently.
