Just Published: "South Korea Petrochemicals Report 2016"

South Korea's petrochemicals output growth will be challenged by dwindling demand from China, as well as the deepening supply glut in the domestic petrochemicals market, which will push down prices and reduce margins. However, the industry's competitiveness coupled with its high value product slate should help producers maintain revenues going forward.

South Korea's integrated petrochemicals supply chain and high value added will enable it to capitalise on growing demand opportunities for petrochemicals in the region's emerging economies. For example, Indonesia's emergence as a regional auto manufacturing hub will increase its demand for synthetic rubber and engineering plastic over the next five years. India's sluggish capacity growth is also widening the gap between demand and domestic supply. These factors should help offset some of the decline in growth of exports to China.

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Nevertheless, South Korea's surge in aromatics capacity, alongside the construction of propylene units, appear to have come at an unfortunate time in the market cycle. With Northeast Asian demand for feedstock for the polyethylene terephthalate (PET) chain slackening, paraxylene (PX) prices fell in Q415 and are not expected to recovery strongly in the year ahead. South Korean PX producers are therefore likely to see narrow margins in the quarters ahead, unless the Chinese market picks up.

The strength of the Korean won against the Japanese yen and Chinese yuan is a blow to the competitiveness of Korean petrochemicals producers as well as the industrial sector that consumes polymer and rubber.

The industry is focusing on adding value to the chemicals chain and serving domestic electronics and automotive industries with an emphasis on quality and specialisation.

Over the medium term, South Korea will have a stable supply of naphtha feedstock, which depends on refining rates. However, Korean refineries have historically suffered from chronic over-capacity and low operating rates.

The South Korea 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 South Korea Petrochemicals Report provides industry professionals and strategists, sector analysts, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Korean petrochemicals industry.

Key Benefits

* Benchmark BMI's independent petrochemicals industry forecasts

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