What is the global industrial impact of Türkiye's strong earthquake?

On February 6, two 7.8 magnitude earthquakes occurred in Türkiye, which were felt all over Asia, Europe and Africa. Türkiye is the seventh largest plastic producer in the world, the second largest plastic producer in Europe, and the fifth largest paint producer in Europe. The chemical industry is a major part of Türkiye's industrial system. Once the earthquake has impacted the local chemical industry, how will it affect the global chemical industry?

On the morning of February 6 local time, a strong earthquake occurred in southeast Türkiye. Lebanon, Syria and other neighboring countries were also affected by the earthquake. The chemical industry is an important part of Türkiye's industrial system, and its import and export amount accounts for a relatively large proportion of the country's import and export trade. However, Türkiye's imports and exports of chemicals account for a relatively limited proportion in the world, so even if the earthquake has an impact on the local chemical industry, it is difficult to have a significant impact on the supply of the global chemical market.

Türkiye's petrochemical industry plays an important role in Europe

Türkiye is the seventh largest plastic producer in the world, the second largest plastic producer in Europe, and the fifth largest paint producer in Europe. Its chemical industry has high technology content and rich product categories. It is an important part of Türkiye's industrial system. Global chemical giants Dow, Bayer, Procter&Gamble, etc. have invested in Türkiye. According to the data of Türkiye Exporters Conference (TIM), Türkiye's chemical and its products export volume will be the highest in 2022, amounting to 33.524 billion US dollars, accounting for 13.2% of Türkiye's total export volume. In the future, the growth of Türkiye's chemical industry will exceed the growth rate of the overall economy. In 2023, Türkiye's chemical industry export is expected to reach 50 billion dollars, accounting for 0.79% of the global chemical market.

Türkiye's chemical exports are mainly concentrated in Europe and the Middle East, and its trade with China is limited

In recent years, Türkiye's automobile manufacturing industry, urban reconstruction projects and plastic industry have developed rapidly, so Türkiye's chemical imports have increased significantly. Türkiye's imports are mainly polyurethane, fiber raw materials, rubber raw materials, etc. Türkiye mainly imports chemicals from a country in Europe, a country in the Middle East, Germany, India, Italy, etc. The main export directions are Egypt, Iraq, Germany, a European country, Italy, the United Arab Emirates, etc. In addition, as a chemical transit place, Türkiye plays an important role in the chemical trade of surrounding countries.

The trade volume of chemicals between Europe and China is relatively limited. According to the statistics of the General Administration of Customs of the People's Republic of China, the amount of organic chemicals imported from Türkiye by China in 2022 will be 130 million yuan, accounting for 0.04% of the total amount; Plastic and its products were 200 million yuan, accounting for 0.04%; The import value of rubber and its products was 220 million yuan, accounting for 0.2%. In addition, the amount of chemical fiber (including chemical fiber filament and chemical fiber staple, the same below) imported from Türkiye was 350 million yuan, accounting for 3.3%. In terms of export, the amount of organic chemicals exported from Türkiye by China in 2022 will be 17.04 billion yuan, accounting for 2.9%; Plastic and rubber products accounted for 1.7% and 0.9% respectively. The proportion of chemical fiber is slightly higher, reaching about 8.6%.

On the whole, although the chemical industry and products industry is the industry with the highest export volume in Türkiye, it only accounts for about 1% of the global chemical trade. At the same time, the amount of chemical products trade with China accounts for a very limited proportion of the total amount. Therefore, even if the Türkiye earthquake has an impact on the local chemical industry, it is difficult to have a significant impact on the supply of the global chemical market, The impact on China's chemical import and export is also relatively limited. However, it should be noted that Türkiye is known as the "European Energy Interface", and most of the oil (gas) pipelines in a European country and the Middle East enter Europe through this country. The impact of the earthquake on the oil and gas pipelines and whether it affects the raw material supply of refining enterprises in the above regions remains to be seen.