This year, the Czech petrochemicals sector is expected to see increased and solid growth, according to BMI. However, this growth is reliant on external markets and feedstock prices.
BMI has said that the road to recovery for the French petrochemicals sector is going to be slow and long. The industry is still struggling with a lack of competitiveness and tenuous growth in domestic consumption, both putting pressure on the sector. BMI remains sceptical that there will be any major improvements in the country’s export levels due to high labour costs as well as competitiveness issues.
Naphtha represents over 80% of France’s feedstock requirements, so the refining sector is playing a crucial role in the current petrochemical chain. Refinery output is however set to fall in the coming years, so the availability of naphtha could decline as time goes on.
The German petrochemicals market is likely to make a transition to more high value speciality production due to increasing competition and rival markets, according to BMI. However, this is expected to be at the expense of other petrochemicals and polymers. In the first half of this year, the speciality chemicals sector saw an increase of 6% growth year on year, compared to chemicals which saw 1.5% growth year on year. Petrochemicals saw growth of only 0.5%.
There is plenty of upside when it comes to the petrochemicals sector in Hungary, according to BMI, however, basic chemicals production has not seen the benefits from rising growth.
The Polish petrochemicals market is still being faced with challenges in the domestic market, BMI have reported. A slow recovery in external markets is also having an impact on the sector. Also, the polymers sector has seen an overall downwards trend in the first half of this year with growth only hitting 0.2% year on year.
BMI has reported that the UK’s petrochemical sector is going through a growth period as the domestic market gains strength and external markets begin to recover. The country is now well positioned, according to BMI to take advantage of the high level of value added as well as strong integration in its domestic production chain. The country’s petrochemical sector will however struggle competitively, particularly from the US. The first half of 2014 saw the UK’s petrochemical sector grow by 11% year on year and BMI believes total growth in the sector for 2014 could be in the 10% region.
The shale potential in the UK could provide the petrochemicals sector with a long term supply of ethane, however the price of the feedstock, is yet to be determined. Ethane currently represents under 1/3 of the UK’s feedstock but this could rise as shale gas is exploited. In the near term, cheap ethane imported from the US could boost the UK petrochemical sector, especially is Grangemouth is ethane production based.
Due to political and economic crises, the Ukrainian petrochemical industry is facing big problems and is closing plants, BMI has said. Several large plants are shut and a weak export base, currency instability and political risks are making the situation worse. Russia is also threatening to cut supplies of natural gas to the country on the claims of unpaid bills.
There are movements in the country, BMI has reported, to diversify energy sources, and this will have benefits for the petrochemicals sector, however, these are some years away yet.
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