|
|
 |
|
Viewing report
|
|
|
|
Saudi Arabia Petrochemicals Report Q3 2011
Business Monitor International, June 2011, Pages: 69
Business Monitor International's Saudi Arabia Petrochemicals Report provides industry professionals and strategists, corporate analysts, petrochemical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Saudi Arabia's petrochemicals industry.
The Saudi petrochemicals industry is leveraging its advantages in ethane feedstock to expand its Asian markets, with exports, output and production capacity set to continue to expand in 2011, according to BMI’s latest Saudi Arabia Petrochemicals Report. In the first two months of 2011, Saudi Arabia’s petrochemicals exports grew 6.8% y-o-y to 4.65mn tonnes. Growth was spurred on by rising demand from Asia and increased local production of ethane feedstock. A rise in ethane output was related to higher oil production with crude up 300,000b/d to 8.7mn b/d in February which resulted in increased associated gas production. Ethane is Saudi Arabia’s main petrochemicals feedstock, accounting for at least 75% of the total.
Saudi Arabia’s petrochemicals margins were healthy in 2010, but sales could come under pressure from a moderation in Chinese demand growth. China's annual PE demand is expected to grow by 8-9% in 2011 down from 19% in 2010, but new capacity will reduce imports by up to 14% from the 7.4mn tonnes imported in 2009. BMI believes this will be more at the expense of neighbouring Asian states while Saudi suppliers will be less affected and should benefit from low domestic ethane feedstock costs.
Saudi Arabia’s main weakness is its dependence on commodity petrochemicals and a lack of high performance and speciality grades, which can add value to exports and put the industry in direct competition with producers in Japan and other more mature markets. However, the country is making a concerted effort towards the development of downstream industries with Petro Rabigh’s expansion involving the creation of facilities dedicated mainly to the plastics converting industry. Petro Rabigh II will be almost entirely dedicated to value-added downstream activities with 17 new facilities including an aromatics complex with combined capacity for more than 1mn tpa of benzene, toluene and xylenes, as well as plants making thermoplastic olefins, ethylene vinyl acetate (EVA), methyl tert -butyl ether (MTBE), methyl methacrylate (MMA), polymethyl methacrylate (PMMA), acrylic acid and superabsorbents, cumene, phenol, cyclohexanol, caprolactam, nylon-6, hydrogen peroxide and polyether polyols. A final decision on Petro Rabigh II will be made at the end of this year with completion scheduled for the end of 2015.
Demand for Saudi petrochemicals export has been led by China, which is seeing better than expect growth in orders. A large proportion of growth is related to inventory restocking and the extent to which this is sustained at this level is conditioned by the growth in the Chinese domestic market as well as the continued recovery in its exports of manufactured goods, which utilise imported petrochemicals. BMI does not believe that China can be relied upon to absorb everything that Saudi Arabia exports and it is likely that producers will become more reliant on the European market over the medium term.
By 2015, BMI forecasts ethylene and propylene capacities will rise to 16.52mn tpa and 6.55mn tpa respectively, with Saudi Kayan’s commercial operation in 2011 set to contribute most to the increase. Compared with 2010, total PE capacity will rise 20% to 8.86mn tpa, PP will rise 11% and PS, PET and PVC capacities will remain unchanged.
In BMI’s Middle Eastern Petrochemicals Business Environment Ratings, Saudi Arabia is rated as the most attractive country out of the 11 surveyed by some margin, with a score of 76.3 points, up 1.3 points as a result of an improvement in Saudi Arabia’s long-term external environment. Nevertheless, increasing capacity has helped to push up Saudi Arabia’s score in recent quarters, although this is slightly offset by deteriorating external and financial risk scores. The country is placed ahead of the UAE, which is in second place with 63.0 points, and a cluster of other Gulf countries that cannot compete with Saudi Arabia’s feedstock or economies of scale. It is also ahead of Iran, which suffers from poor risk levels.
Product samples
A sample for this product is available. Please Login/Register to download this sample.
|
|
|
|
