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Hungary Petrochemicals Report Q1 2012
Business Monitor International, Dec 2011, Pages: 51
Business Monitor International's Hungary Petrochemicals Report provides industry professionals and strategists, corporate analysts, petrochemical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Hungary's petrochemicals industry.
The Hungarian petrochemicals industry reported strong export-led growth in H111, but BMI’s latest Hungary Petrochemicals Report states that the sector’s exposure to the eurozone will lead to flat growth in 2012.
In H111, leading Hungarian petrochemicals producer MOL’s olefins and polyolefins growth rates were broadly positive. Total olefins production grew 8% y-o-y to 636,000 tonnes, while polymer output rose 13% y-o-y to 622,000 tonnes. LDPE output was up 21% y-o-y to 127,000 tonnes and PP was up 18% to 279,000 tonnes. HDPE rose by 4% to 216,000 tonnes. Polymer demand was stable in H111, increasing yo- y due to growth in the automotive, construction and packaging industries. MOL’s polymer sales increased by 11% due to improving market demand and exports.MOL became increasingly reliant on the domestic market for petrochemicals sales in 2010, with its 6% growth to 1.42mn tonnes driven by a 20% rise in Hungarian sales – to 462,000 tonnes – which more than offset the fall in exports to the eurozone.
However, in H111 Hungarian total refined product and petrochemical sales were flat at 2.25mn tonnes, while Slovakian sales grew 5.1% y-o-y to 769,000 tonnes, Croatian sales dropped 8.6% y-o-y to 946,000 tonnes and other markets – mostly in the eurozone – saw sales rise 10.1% to 5.9mn tonnes. Overall refined product and petrochemical sales grew 5.3% y-o-y to 9.9mn tonnes.
BMI believes MOL’s production of basic chemicals in 2012 will increase modestly compared to 2011, which itself was marked by mixed market performance in petrochemical-consuming industries. Meanwhile, the construction sector contracted further, while the automotive industry started its recovery. Growth in the Hungarian chemicals industry will be led by production of isocynates, assisted by EUR140mn (US$203mn) of investment into BorsodChem by Wanhua Industrial Group, which acquired the Hungarian firm in Q111. In July 2011 work was due to start on the expansion of methylene di-para-phenylene isocyanate (MDI) capacity at Kazincbarcika, by 90,000tpa to 240,000tpa. Meanwhile, a 160,000tpa toluene diisocyanate (TDI) plant came online in October 2011.
However, BorsodChem said it was reviewing operations at its existing 90,000tpa TDI plant at Kazincbarcika and that it may idle the unit temporarily when the company completes commissioning of the new plant. The old plant was due to begin a planned maintenance turnaround in July 2011, which was due to until late August. A decision on restarting the plant will be made once maintenance is completed. The reason for idling the plant was the effect of rising raw material prices on TDI margins.
In BMI’s CEE Petrochemicals ratings, Hungary has 55.9 points, up 0.2 points on the previous quarter due to an improvement in long-term structural characteristics. As a result of its improved score and a decline in the Czech Republic’s score, Hungary has moved from fourth to third place, 0.1 points ahead of the Czech Republic and 2.2 points behind Poland.
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