Algeria Petrochemicals Report Q2 2016 - New Report Available

From: Fast Market Research, Inc.
Published: Tue Feb 16 2016

Domestic consumption of petrochemicals is set to be lacklustre in 2016, with economic growth at a relatively subdued 2.9% and consumer and business confidence remaining low. Lower oil prices are responsible for the erosion of economic performance. Additionally, they militate against Algeria's ability to capitalise on its gas resources to establish gas-based petrochemicals production.

The country has around 178,000 tonnes per annum (tpa) of polyethylene (PE), 40,000tpa of vinyl chloride monomer (VCM), 35,000tpa of polyvinyl chloride (PVC), 120,000tpa of methanol (rising to 1.12mn tpa by 2017) and 990,000tpa of ammonia, which should increase to 5.6mn tpa when new fertiliser plants enter production. These rises in capacity will also result in the production capacity for urea hitting 3.59mn tpa.

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Algeria's economic growth will slow markedly over 2016. Under the pressure of lower oil prices, the government will adopt a greater shift towards spending cuts and protectionism. These trends will weigh on investment and consumption over the coming quarters, and we forecast the economy to grow by only 1.9% in real terms - the weakest rate since 2009.

Growth in the automotive industry and rising local content in car-making should stimulate consumption of plastics products, but it remains to be seen whether local plastics converters will benefit.

In relation to the agricultural sector, the government's new emphasis on improving food self-sufficiency should help local chemical fertiliser consumption, although this is at the mercy of government subsidies that could be cut due to falling oil revenue.

Algeria's Petrochemicals Risk/Reward Index (RRI) score remains unchanged this quarter at 32.6 out of 100, down 1.8 points since the previous quarter due to a downward revision in its country risk score. This maintains its bottom place in the table for the Middle East and Africa RRI table. The falling price of oil has undermined the refining sector, while market activity is increasingly sluggish. With no new petrochemicals capacities expected in the next five years, it is unlikely Algeria's position will improve.

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

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