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Polymer players continue to tackle supply chain disruptions in Turkey

by Merve Madakbaşı -
  • 24/02/2023 (02:24)
Turkey has been trying to heal its wounds since devastating quakes that hit more than 10 provinces in the southeastern region earlier this month caused a death toll beyond 43,000 and affected millions of citizens. 

According to the official data, more than 13 million people live in the provinces affected by the earthquakes, which constitutes 15.7% of the total population. The region accounts for 10.1% of total GDP, 1.15 points of economic growth and 8.5% of the country’s exports.

Around 14.5% of the agricultural added value comes from the disaster-hit area. Realizing slightly more than 11% of the total manufacturing, the region is notable for its textile and metal industries. Projections point out that the quakes may cause a loss of up to 2% of Turkey’s total gross domestic product this year.

Iskenderun Port remains offline amid repair work 

The catastrophic quakes in the southeastern region have caused severe challenges in the logistics industry. Structural damage at ports in Hatay triggered supply chain disruptions. Carriers have put in alternate calls to other ports in Turkey until Iskenderun Port resumes operations.

LIMAK Iskenderun International Port Management Inc. aims to start full container gate-out and unstuffing operations in March, while they hope to resume vessel discharge and loading operations within 3 months after the necessary tests and repairs at Iskenderun Port are completed.

Large traders, buyers battle with disrupted operations  

Many traders have been battling with delayed deliveries as most of them have had to direct their import cargos from Iskenderun Port to other destinations, mainly Mersin. “Some shipping lines directed containers to alternative ports in Istanbul, Kocaeli, Tekirdag or Izmir as operations at Iskenderun Port will remain halted for a few months,” said a participant.

Details about burned containers remain undisclosed for now  

At Iskenderun Port, 3,670 of the approximately 5,400 containers in the entire container storage area were unburned, and the damage to the containers that overturned due to the earthquake will be determined. Accordingly, about 1,730 containers were completely burned with cargos inside, and their details will be provided later.

Some players reported hearing that some of the burned containers had PP, additives, compounds, and some grades of PE while the damage assessment was still being carried out. A converter said, "We have around 1,500 tons of PPH fibre at Iskenderun Port, which we are not able to receive for the time being."

"We have not experienced any severe issues regarding our PE cargos so far, except for modest amounts," some consumers reported to ChemOrbis. According to a trader, around 10,000 tons of petrochemical products might have been damaged while this was not confirmed at the time of writing. “The pending insurance operations and bureaucratic procedures take a long time,” he added.

Another culprit behind challenges: Reduced workforce

“The immigration has led to a lack of workers, truck drivers and officials at customs in most provinces in the disaster area. The fall in labor force hinders operations at warehouses while customs officials from other cities may be aligned to solve the problem,” players said.

How has shipping turmoil affected polymer prices?

Activity has remained stagnant since the quakes as polyolefin consumers opted to handle their restarts amid falling manpower at their factories while sellers tried to reorganize their delivery operations. 

However, the recent mishaps in the logistics industry contributed to the strong sentiment for March, regardless of the foggy demand outlook for the near term. This is also because the PP and PE markets have already been facing supply constraints from the Middle East amid turnarounds, let alone delayed deliveries from Russia since the beginning of the year. 

Meanwhile, players have not reported any considerable impact on PVC, for which prompt supply has been comfortable owing to the arrival of cheaper cargos in late January. Despite long-term projections of a demand revival based on the proposed reconstruction of the affected cities, import prices leveled off this week.
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