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Turkey

The market has been experiencing a persistent contraction in demand since the second quarter of 2022. This downturn was again evident in the second quarter of 2023 and resulted in average production capacity utilization of only around 70%.

The devastating earthquakes in February this year led to a complete halt in operations at two prominent paper mills in Kahramanmaras (Kipas Paper Mill and Kahraman Paper Mill) which persisted throughout the second quarter. However, Kipas Paper Mill was able to bounce back to resume production in July; there is also some optimism that Kahraman Paper Mill will restart production in the third quarter.

Grappling with the challenge of low capacity utilization rates and selling prices, paper mills initiated a slight increase in their sales prices during the third quarter in a strategic move which, it is hoped, will provide some financial relief for the sector.

The domestic market, heavily affected by high inflation and escalating exchange rates, has witnessed a marked reduction in recovered paper imports; over the span of six months, imports are estimated to have reached approximately 1 million tonnes. Stocks of recovered paper are averaging around 35 days among the large mills and 15-20 days for the smaller operations.

Modern Karton’s mill at Zonguldak is currently undergoing an ambitious investment, with completion slated for the first half of next year. Together with other investments to be finalized within the same timeframe, it is estimated that Turkey will expand its total production capacity by 2 million tonnes in 2024.