Germany Petrochemicals Report Q4 2010
Business Monitor International, September 2010, Pages: 54
Germany Petrochemicals Report provides industry professionals and strategists, corporate analysts, petrochemical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Germany's petrochemicals industry.
The German chemicals and petrochemicals industries grew strongly in H110, but the latest Germany Petrochemicals Report expects that by Q410, year-on-year (y-o-y) growth will be zero owing to high base effects and slowing demand growth. The recovery in German chemicals and petrochemicals industries is stronger than had been envisaged in the previous quarter, with the German chemical industry VCI reporting production growth of 13% y-o-y in H110 with capacity utilisation of 83% in H110, which is approaching the typical 84-86% rate and well above the 77.9% reported at the end of 2009. Nearly all plants were back in operation and the authors believe that the industry as a whole is operating at a comfortable profit margin with producers better able to pass on rising raw material costs to their customers. Sales were buoyant in H110 with the value of the domestic chemicals market up 16%, to EUR77.7bn, and exports up 18% to EUR45.9bn. Domestic sales of German chemical companies improved 13%, to EUR31.8bn, according to VCI. However, a higher base and the impact of fiscal austerity measures in Germany and across the EU will lead to lower rates of growth in H210.
Domestic petrochemicals end markets are showing significant improvements. Notably, the construction industry in Germany, which represents a major European consumer of PVC, has shown excellent recovery from its precipitous decline at the start of 2009. A decrease of 4.5% in y-o-y growth over 2009 now represents an anomaly in otherwise sustained growth rather than a trend towards collapse. Growth is expected in the sector up until the end of the forecast period in 2014. This is driven by high profile projects along with EU regulations that are resulting in increased sales and movement in the power infrastructure sector.
Meanwhile, the vehicle scrappage scheme in Germany in 2009 had benefitted both domestic and foreign carmakers, with their respectively sales increasing 16% y-o-y and 40% y-o-y. Despite the growth seen in H110, the authors believe that weak consumer demand in the EU will be the main deterrent for the recovery of Germany's auto exports (and hence production) in 2010 and for the rest of the forecast period.
Moreover, given that the delivery of vehicles under the scrappage schemes in Western European markets would have ended by the end of H110, we are concerned that this export growth may not be sustained, thereby putting pressure on domestic demand for engineering plastics, particularly PP.
Although we have raised our chemicals output growth forecast from 4.5% to 7.0% and sales growth from 5.0% to 7.0%, we believe that growth will diminish to zero by Q410, with buyers keeping inventories low due to risk aversion. The 2010 GDP growth forecast of 2.0% will almost entirely be driven by external consumption, inventory re-stocking and statistical base effects. We expect German growth to dip back to 1.5% in 2011, before recovering to a trend average of 1.6%. The chemicals industry will follow the broad economic trend.
Germany scores 81.9 points and is placed first in the Western European Petrochemicals Rankings, 8.2 points ahead of France. The authors believe that Germany’s score is unlikely to change, with no capacity additions planned over the next five years. However, with little new capacity coming onstream elsewhere in Western Europe over the period, it should retain its lead in the region.
Executive Summary
SWOT Analysis
Germany Political SWOT
Germany Economic SWOT
Germany Business Environment SWOT
Global Overview
Petrochemicals Market Overview
Table: World Ethylene Production By Country, 2009 And 2014 (‘000 tonnes capacity)
Financial Results
Table: Financial Results Of Major Petrochemicals Companies, 2009
Global Oil Products Price Outlook
Table: Oil Product Price Assumptions, Q409-Q410 (US$/bbl)
Table: Oil Product Price Data And Forecasts, 2007-2014 (US$/bbl)
European Overview
Table: Financial Results Of European Petrochemicals Producers, Q110 (EURmn)
Germany Market Overview
Market Structure
Insight Into The Competitive Arena
Table: Top 20 German Chemical Companies By Turnover, 2008
Table: Top 10 German Subsidiaries Of Foreign Companies By Turnover, 2008
Industry Trends And Developments
Petrochemicals Business Environment
Table: Western Europe Petrochemicals Business Environment Ratings
Industry Forecast Scenario
Table: Germany’s Petrochemicals Sector, 2007-2014 ('000 tpa, unless otherwise stated)
Macroeconomic Outlook
Table: Germany – Economic Activity, 2007-2014
Company Monitor
BASF Aktiengesellschaft (BASF)
BP Refining And Petrochemicals GmbH
Lanxess AG
Country Snapshot: Germany Demographic Data
Section 1: Population
Section 1: Population
Table: Demographic Indicators, 2005-2030
Table: Rural/Urban Breakdown, 2005-2030
Section 2: Education and Healthcare
Table: Education, 2002-2005
Table: Vital Statistics, 2005-2030
Section 3: Labour Market And Spending Power
Table: Employment Indicators, 2001-2006
Table: Consumer Expenditure, 2000-2012 (US$)
Table: Average Annual Manufacturing Wages
Glossary Of Terms
Table: Glossary Of Petrochemicals Terms
Methodology
How We Generate Our Industry Forecasts
Chemicals And Petrochemicals Industry
Cross Checks
Business Environment Ratings
Table: Petrochemicals Business Environment Indicators And Rationale
Weighting
Table: Weighting Of Indicators
- BASF Aktiengesellschaft
- BP Refining And Petrochemicals GmbH
- Lanxess AG
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