Turkey Petrochemicals Q3 2019
Despite Turkey's overall economic woes, its petrochemicals industry has managed to sustain growth and is set to seestrong growth in a broad range of petrochemicals and polymers over the forecast period. In 2018, we estimate that Turkey'sproduction of chemicals and chemical products grew 5.6% y-o-y, while rubber and plastic products grew 1.2% y-o-y. However, thetrend turned sharply down in Q418 and Q119 with chemicals output in January-February 2019 down 6.1% y-o-y while rubber andplastic fell 11.1%. The depreciation of the lira coupled with the rise in the price of crude oil could hit the sector disproportionatelyharder than other sectors of the Turkish economy. Furthermore, the channelling of substantial credit into construction has come atthe expense of manufacturing and other sectors, which will restrain export potential and higher value-added production growth inthe years ahead. While this lending is now likely to be reduced following the election, the overall economic situation will remain poorand Turkish petrochemicals production will see slower growth and lower margins.
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