New Market Report: Czech Republic Petrochemicals Report Q1 2016

The Czech petrochemicals industry saw a surge in growth in Q215, following a lacklustre Q115, amid strong growth in export-led manufacturing. This puts the industry in a strong position for capacity expansion and diversification.

Czech chemicals output growth averaged 3.5% y-o-y and rubber and plastic rose 9.0% y-o-y in H115. Low naphtha costs have improved competitiveness of the sector and boosted polyolefins margins, while higher sales volumes - particularly in the polypropylene segment - have been led by a manufacturing surge. Export-led industries have stimulated petrochemicals consumption, helping to raise cracker capacity utilisation to 89%.

The external environment will be crucial to sustaining growth. With one-third of Czech exports destined for the German market, the Czech petrochemicals industry is integrated with the needs of Germany's industry and consumer markets. Germany's outlook continues to look healthy, but there remains a high risk the Greek crisis could upset growth in the eurozone with negative consequences for Czech industry. As such, we are mindful of the possibility of petrochemicals growth collapsing, although current trends are favourable.

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The domestic market will be lifted by 3.3% growth in construction and 6.9% growth in the automotive sector, with similar strong growth forecast in 2016.

Leading Czech petrochemicals producer Unipetrol plans to increase its polyethylene (PE) capacity at its Litvinov site. It has submitted plans to replace the ageing 120,000 tonnes per annum (tpa) high-density polyethylene (HDPE) unit with a 300,000 tonnes per annum (tpa) plant, thereby raising its total PE capacity from 320,000tpa to 500,000tpa. It hopes to start operations in Q216, although BMI believes it may be later than scheduled if the appointment of contractors is delayed.

Unipetrol is also planning the closure of its 350,000tpa ammonia plant in Litvinov due to a lack of competitiveness and an increasingly limited market.

The Czech Republic Petrochemicals Report has been researched at source, and features BMI Research'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.

Key Benefits

* Benchmark BMI's independent petrochemicals industry forecasts

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