Recent Study: Czech Republic Petrochemicals Report Q1 2015

The Czech petrochemicals industry enjoyed strong growth in 2014. Even though strong is expected to continue in 2015, it is set to decelerate. This is due to reduced demand from the eurozone and, consequently, a slowdown in exports, which affects industrial growth.

The transition from serving interests of the Eastern Bloc economies to become a more devoted to the EU market economies, including Germany, has served the Czech Republic chemicals and petrochemicals industry well. The industry has diversified away from basic chemicals to serve domestic industry, leading to the development of the petrochemicals chain. There is now greater emphasis on rubber and plastics processing, as well as pharmaceuticals and speciality chemicals.

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In the first eight months of 2014 chemicals output was up by 11.4% year-on-year (y-o-y) while rubber and plastic was up by 10.0% y-o-y. Meanwhile, in the first nine months of 2014, the Czech Republic's leading petrochemicals producer Unipetrol reported that olefns and polyolefins margins rose by around 14.8% y-o-y. At the same time, sales of polyethylene (PE) increased by 25% and sales of polypropylene (PP) by 32%.

Unipetrol's profitability is also improving. In the first nine months of 2014, olefins margins were up 14.7% to EUR374/tonne while polyolefins margins rose 14.8% to EUR271/tonne. However, BMI believes the situation could be reversed if oil prices rise and the koruna depreciates against the USD, which could put pressure on margins at a time when buyers are not willing to take on price increases.

Key BMI Views

* Growth in petrochemicals output and sales occurred against an improving economic backdrop with GDP growth estimated at 2.4%. However, the export-led recovery will wane in going into 2015, as external demand suffers from tepid eurozone growth.
* From the supply side, the positive effects brought about by any future external and domestic growth could be outweighed by the reduction in refining capacity, which risks limiting...

The Czech Republic Petrochemicals Report has been researched at source, and features Business Monitor International (BMI)'s market assessment and independent forecasts for key petrochemicals sub-sectors. The report also analyses the impact of regulatory changes, recent developments and the background macroeconomic outlook and features competitive landscapes comparing companies by products and services, sales, market share, investments, projects, partners and expansion strategies.

BMI's Czech Republic Petrochemicals Report provides industry professionals and strategists, sector analysts, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Czech petrochemicals industry.

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