Losses in the Plastics Sector Offset by Exports

PAGEV continues to monitor the pulse of the plastics industry through its sector reports. According to PAGEV's latest data from its Turkey Plastics Sector Monitoring Report for January-September 2020, Turkey's plastics sector recorded 9-month plastic product output of 7.3 million tonnes, down 2% by volume compared to the same period in 2019, and valued at USD 25.7 billion, down 2.8% in value. Despite the contraction in domestic market demand due to the pandemic, exports acted as a brake on the sharp production decline. As losses in the sector are offset by exports, the plastics sector is expected to reach its highest export figures in history in 2020. Under the impact of the decline in demand caused by the coronavirus pandemic since March, plastic product output in the January-September 2020 period totalled 7.3 million tonnes, down 2% by volume, and USD 25.7 billion, down 2.8% in value, compared to the same period in 2019. Year-end production is expected to reach 9.2 million tonnes, down 1% by volume, and USD 30.5 billion, down 6.6% in value. Should this scenario materialize, plastic product output is estimated to fall below 2019 levels by volume and below 2015 levels by value. Capacity utilization rates in Turkey's plastics sector, which have declined significantly since March, approached September 2019 levels by September. The average capacity utilization rate for the plastics sector during the 9-month period of last year was 69.7%, while in the 9-month period of 2020 it averaged 64.1%.

Covid-19 Pandemic Increases Export Ratio in Plastics Sector

The wounds of the Covid-19 pandemic in the plastics sector are being healed through exports. During the 9-month period of 2020, plastic product exports reached 1.7 million tonnes, up 19.2% by volume, and USD 3.9 billion, up 8.8% in value, compared to the same period of the previous year. The plastics sector, which exports to nearly 200 countries, exported the most plastic products to five countries during this period: Iraq, Germany, United Kingdom, Israel and the United States.

Plastic product exports expected to reach record highs in both volume and value in 2020

By year-end, plastic product exports are estimated to reach 2.3 million tonnes, up 15.8% by volume, and USD 5.2 billion, up 6.9% in value, compared to 2019.

Plastics sector exports rank first in total chemical sector exports

According to İMMİB data, the share of plastics sector total exports within total chemical sector exports rose from 30.3% in the 9 months of 2019 to 34.4% in the 9 months of 2020. Thus the plastics sector maintained its leading position in total chemical sector exports. During the same period, it was noted that the added value in plastic product exports increased. Plastic product imports during the period reached 427 thousand tonnes, up 3.2% by volume, and USD 2 billion, up 7.1% in value, compared to the same period of 2019. By year-end, imports are expected to reach 570 thousand tonnes, up 1.8% by volume, and USD 2.7 billion, up 4.8% in value, compared to 2019.

Domestic demand contraction continues

The negative effects of the coronavirus pandemic on many sectors, particularly construction, automotive and tourism, are narrowing domestic demand. Plastic product domestic market demand fell to 7.5 million tonnes, down 6.3% by volume, during the January-September 2020 period compared to the same period of the previous year. By value it rose to USD 23.8 billion with an 8.5% increase. By the end of 2020, domestic consumption is expected to reach 7.5 million tonnes, down 4.9% by volume, and USD 29.6 billion, down 2.5% in value, compared to 2019. The plastic product sector recorded a trade surplus of USD 1.9 billion in 9 months. Compared to the same period last year, a 10.7% increase was achieved in the trade surplus. Expectations suggest that by year-end the trade surplus will increase 21.4% by volume and 9.3% by value compared to 2019.

Commenting on the January-September 2020 data, Yavuz Eroğlu, Chairman of the Turkish Plastics Manufacturers Research, Development and Education Foundation (PAGEV), said: "Although our plastics sector's 9-month production figures show contraction in both volume and value, we can view the approaching of capacity utilization rates to September 2019 levels as a positive development. Additionally, the increases achieved in exports played a role in keeping losses in our sector's production limited despite the contraction in domestic market demand during the January-September period.

Our sector firms went through an extremely challenging process, particularly after April. Due to the pandemic, we saw significant declines in plastic domestic market demand outside areas such as packaging and medical where demand increased. Companies balanced their losses with exports. A development that gave us morale and hope for the sector's future during this period was the increase in added value in plastic product exports. We may see a historic record in plastic product output by year-end. While the world is experiencing such a challenging period, I congratulate all our plastics manufacturers who managed to increase their exports. The plastics sector, which made significant contributions to combating the Covid-19 pandemic, played a critical role during this process and met incoming demand very quickly." Concluding his remarks with the message "Plastics have no place in nature, but they have a place in our lives," Yavuz Eroğlu said: "During the pandemic, it became clear that masks, disinfectant packaging, face shields, cologne bottles, test kits and hygienic food packaging made from plastic raw materials, which became a basic necessity for all of us, played a vital role. However, it saddens us to see carelessly discarded masks and packaging. While protecting our own lives with plastics, we must protect the environment through conscious consumption, proper waste segregation and recycling."