2014-01-05 21:22:35 - New Energy market report from Business Monitor International: "Saudi Arabia Petrochemicals Report Q1 2014"
Saudi Arabia's petrochemicals sector will continue to play a central role in the development of the country's non-oil industrial sector, helping to balance an ongoing decline in oil production, according to BMI's Saudi Arabia Petrochemicals Report for Q114. However, the export-orientated sector's vulnerability to the external market, a situation made worse by an overwhelming focus on basic chemicals, is beginning to erode margins as Asian demand growth weakens.
The Saudi petrochemicals industry is not expected to see a massive rise in overall petrochemicals capacities until 2016, when the Sadara Petrochemicals complex is due onstream; the facility is to comprise a cracker with capacity for 1.5mn tonnes per annum (tpa) of ethylene. In 2014, the most notable development will be Arabian Industrial
Fibre Company's (Ibn Rushd) 420,000tpa polyethylene terephthalate (PET) plant, which is expected to begin production in Q114. The company is also due to expand the capacities of its upstream paraxylene and PTA plants, which are also located in Yanbu. After debottlenecking, the PX capacity will double, to 400,000 tpa, while the PTA capacity will increase to 700,000tpa. Alrajhi Group's new complex is also due to come onstream in 2014, which includes 100,000tpa of linear alkyl benzene (LAB) and 6,000tpa of polysilicon.
Full Report Details at
- www.fastmr.com/prod/754764_saudi_arabia_petrochemicals_report_q1 ..
The development of these intermediates should boost supplies to downstream plants in the Kingdom as well as external markets. PET is used in the production of plastic bottles and polyester fibres, with consumption growth being led by Asian emerging markets. LAB is mostly used as a surfactant, and polysilicon is used in the manufacture of solar panel cells, a sector that is being heavily invested in in the Arabian Gulf.
Key trends and developments in Saudi Arabia's petrochemicals sector:
* Access to plentiful cheap feedstock is likely to change as the government embarks on a phased increase in the price of gas sold to domestic industrial users, in addition to reducing the discount that is currently applied to propane prices. Severe feedstock shortages are expected by the end of the forecast period, at a time when Saudi production will be in competition with petrochemicals produced from cheap US shale gas. However, the country will remain a leading petrochemicals exporter, and providing the Asian market continues on the expected trend, will help absorb the surge in petrochemicals and plastics.
* By 2018, BMI forecasts ethylene and propylene capacities will reach 19.5mn tpa and 7.0mn tpa respectively, with Saudi Kayan's commercial operations set to contribute most to the increase. Total PE capacity will rise to 9.3mn tpa by 2018, with PP to reach 5.6mn tpa and PS to reach 375,000tpa, with PVC to remain unchanged at 855,000tpa. Jubail and Yanbu are the focus of petrochemicals developments. Our projections for petrochemicals capacity are based on planned projects, but it is possible that some may not come to fruition as a result of the restriction on ethane feedstock and a possible lacklustre recovery in the Chinese market, at a time of rising Chinese capacities.
* In BMI's Middle Eastern Petrochemicals Risk/Reward Ratings, Saudi Arabia is rated as the most attractive country out of the 11 surveyed, with a score of 77.3 points, down 0.1 point since the previous quarter, due to a modest decline in its Country Risk score. Increasing capacity, coupled with improvements in its long-term external environment, has helped to push up Saudi Arabia's score, although this is slightly offset by deteriorating external and financial risk scores.
Report Table of Contents:
BMI Industry View
- Business Environment
- Table: Saudi Arabia Petrochemicals Capacity, 2011-2018
- Table: Saudi Arabia - Economic Activity
Industry Risk/Reward Ratings
- MEA Risk/Reward Ratings
- Arab Spring Takes Its Toll
- Regulatory Framework Dictates Risks
- Table: MEA Petrochemicals Risk/Reward Ratings
- Saudi Arabia Petrochemicals Risk/Reward Ratings
- Table: Saudi Arabia - Cracker Capacity '000tpa
Industry Trends And Developments
- Royal Dutch Shell
- Chevron Phillips
- Middle East Overview
- Kuwait And UAE Challenge Region's Bigger Producers
Global Industry Overview
- A Stable 2013, Leading to Growth in 2014?
- Table: Top 10 ethylene producers, 2013
- Long-term growth
- Shale: The Future of Feedstock?
- Threats to growth
- Global Oil Products Price Outlook
- Crude Price Forecasts
- Table: BMI's Oil Price Forecasts, Average Price (US$/bbl)
- Variance Across Product Markets
- Narrower US Market Crude-Product Spreads
- Weak Demand Persists
- Risks To Outlook
- Table: BMI's Refined Products Forecasts, US$/bbl
- Supply: Supported By Global Refining Capacity
- Naphtha: US Gas Hits Demand
- Gasoline And Gasoil/Diesel: Subsidies & Fuel Efficiency Cap Upward Movement
- Jet Fuel: Limited Upward Movement
- Table: Total Air Freight And Passenger Volumes
- Bunker Fuels: Sulphur Control To Hit Rotterdam Hardest
- Demographic Outlook
- Table: Saudi Arabia's Population By Age Group, 1990-2020 ('000)
- Table: Saudi Arabia's Population By Age Group, 1990-2020 (% of total)
- Table: Saudi Arabia's Key Population Ratios, 1990-2020
- Table: Saudi Arabia's Rural And Urban Population, 1990-2020
- Industry Forecast Methodology
- Risk Reward Rating Methodology
- Table: Petrochemicals Risk Reward Rating Indicators
- Table: Weighting Of Indicators
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