Fast Market Research recommends "Saudi Arabia Petrochemicals Report Q3 2016" from Business Monitor International, now available
[ClickPress, Fri Jul 01 2016] Saudi producers have improved margins since the previous quarter, but there is the ongoing threat from growth in Iranian exports and the slowdown in the Chinese market. However, the industry benefits from economies of scale and is moving increasingly towards mixed feedstocks, which should allow some flexibility in defending margins in a low oil price environment.
On the production side, the Sadara and Petro Rabigh complexes will have a major effect on the market in 2016. The former has the capacity to produce 3mn tpa of ethylene and polyethylene (PE) and will utilise naphtha and ethane as feedstock, meaning it will benefit from lower oil prices. Meanwhile, the second phase of Petro Rabigh is set to add 1.2mn tpa of ethylene capacity, with significant downstream polymer and aromatics facilities, including 600,000tpa PE, 400,000tpa benzene and 850,000tpa paraxylene (PX).
Meanwhile, a projected decline in local market growth will have an impact on petrochemicals consumption. Lower government spending, diminishing government deposits in the banking system and tighter liquidity, and weaker consumer and business sentiment are bound to affect downstream plastics conversion. This will be felt significantly in sales of plastics used in packaging, such as polyethylene terephthalate (PET) and PE.
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By 2020, BMI forecasts ethylene and propylene capacities will rise to 19.52mn tonnes per annum (tpa) and 7.00mn tpa respectively, with Saudi Kayan's commercial operations set to contribute the bulk of the increase. Total polyethylene (PE) capacity will rise to 10.23mn tpa by 2019, polypropylene (PP) will increase to 5.65mn tpa, polystyrene (PS) will reach 375,000tpa and polyvinyl chloride (PVC) will remain unchanged at 855,000 tpa. Jubail and Yanbu are the focus of petrochemicals developments.
Saudi Arabia continues to top BMI's Middle East and Africa Petrochemicals Risk/Reward Index rankings with a score of 76.1, unchanged since the previous quarter as upside and downside risks have largely cancelled out.
The Saudi Arabia 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 Saudi Arabia Petrochemicals Report provides industry professionals and strategists, sector analysts, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Saudi petrochemicals industry.
Benchmark BMI's independent petrochemicals industry forecasts to test other views - a key input for successful budgetary and planning in the Saudi petrochemicals market.
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