Spain Petrochemicals Report Q3 2011
Business Monitor International, June 2011, Pages: 55
Spain Petrochemicals Report provides industry professionals and strategists, corporate analysts, petrochemical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Spain's petrochemicals industry.
Export growth will lead the recovery of the Spanish petrochemicals industry with domestic sales set to remain weak in 2011, according to BMI’s latest Spain Petrochemicals Report.
The key elements vital for private consumption to grow – including higher incomes, lower taxes, greater wealth and available consumer credit – will all be lacking in Spain over the medium term, and this will thrust Spanish petrochemicals production into increased export dependency. We have revised down our forecast for Spanish growth in 2011 to 0.7%, from 0.9% previously, on the back of the government's push for major fiscal consolidation this year, which allows for little prospect of recovery. Indeed, aside from exports, we believe it unlikely that any petrochemicals market will recover in 2011. In order to recover competitiveness lost during the boom years and successfully rebalance the economy away from an overreliance on domestic demand, asset prices and real wages will need to be brought down further. As such, we believe that Spanish growth will prove anaemic over the long run, averaging 1.6% through to 2015.
The country remains burdened with low levels of consumer confidence, contraction of credit and rising inflation, all of which are combining to dampen domestic demand. Firms have failed to see a significant rebound in industrial activity, with industrial production growth – a bellwether for the petrochemicals industry – proving flat in recent months. With industrial production remaining well below 2007 levels, and with low capacity utilisation rates, overall demand for petrochemicals products will be capped for the foreseeable future.
BMI believes Spanish petrochemicals production will grow on the back of growth in eurozone markets. The resumption of operations at the PET plant at San Roque, after Compania Espanola de Petroleos (Cepsa) acquired it from La Seda de Barcelona (LSB) in January 2011, is largely in response to declines in imports from Asia, which had undermined domestic production. The plant, which was closed in September 2008, will be integrated with Cepsa’s 480,000tpa PTA facility at Guadarraque, creating a captive market for its output. The move should enhance and grow PTA-PET output in 2011. The reopening of the San Roque PET facility comes nearly a year after LSB brought its PET plant at El Prat de Llobregat following a lengthy shutdown.
An increase in PET output, helped by the resumption of production at a PET plant at San Roque, prompts us to raise our chemicals output growth forecast for 2011 from 3.0% to 3.5%. However, this is still lower than the 4.0% growth estimated in 2010 and not enough to offset the 11% decline reported in 2011. Most of the growth seen in 2010 was due to stronger export performance along with domestic polymers restocking activity. Although production has yet to reach pre-crisis levels, revenues from chemicals production grew by around 8.5% in 2010 with a further 6.5% expected in 2011 as prices recover, more than offsetting the 4.1% decline reported in 2009. As such, by end-2011, annual sales could reach around EUR60bn. Exports are leading the recovery, increasing around 17.5% in 2010 to over EUR23bn. In 2011, exports are set to rise by a further 17% to EUR28bn. The fortunes of the Spanish chemicals industry have been far more favourable than the rest of the industrial sector. However, BMI still expects some outdated and smaller plants to be taken offline permanently leading to shrinkage in available production capacity, although continuing restructuring efforts.
Spain scores 67.8 points, putting it in sixth place in our Western Europe Petrochemicals Ratings, 1.8 points behind the UK. Its score has improved in recent quarters due to a rise in its country risk score, particularly its long-term external risk.
Executive Summary
SWOT Analysis
Spain Petrochemicals SWOT
Spain Political SWOT
Spain Economic SWOT
Spain Business Environment SWOT
Global Petrochemicals Overview
Petrochemicals Market Overview
Financial Results
Global Oil Products Price Outlook
Table: Oil Product Price Assumptions, Q410-Q411 (US$/bbl)
Table: Oil Product Price Data And Forecasts, 2008-2015 (US$/bbl)
European Petrochemicals Overview
Spain Market Overview
Market Structure
Table: Spain’s Polymer Capacity
Petrochemicals Business Environment
Table: Western Europe Petrochemicals Business Environment Ratings
Industry Trends And Developments
Upstream
Industry Forecast Scenario
Table: Spain’s Oil, Gas And Petrochemicals Sector, 2007-2015 (‘000 tpa unless otherwise stated)
Macroeconomic Outlook
Table: Spain - Economic Activity; 2006-2015
Company Monitor
Cia Española de Petroleos (Cepsa)
LyondellBasell
Repsol YPF
La Seda de Barcelona (LSB)
Glossary Of Terms
Table: Glossary Of Petrochemicals Terms
BMI 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
- Cia Española de Petroleos (Cepsa)
- LyondellBasell
- Repsol YPF
- La Seda de Barcelona (LSB)
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