United Kingdom Petrochemicals Report Q3 2012
- ID: 2199846
- June 2012
- Region: United Kingdom, Great Britain
- 58 pages
- Business Monitor International
The United Kingdom Petrochemicals Report provides industry professionals and strategists, corporate analysts, petrochemical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on United Kingdom's petrochemicals industry.
The Q312 UK petrochemicals report assesses the impact of the eurozone crisis and the domestic economic slowdown on the British chemicals and petrochemicals industries.
The report also examines whether producers will be able to defend margins and maintain competitiveness in the face of surplus European capacity and increased competition from Asia and the Middle East.
Furthermore, BMI analyses the growth and risk management strategies being employed by the leading players in the sector, as they respond to capacity cuts in refining and volatility in naphtha feedstock supply.
As a key supplier to the domestic industrial sector as well as to the eurozone, British chemicals and petrochemicals producers face growing uncertainty as 2012 progresses. In 2011, the industry reported a recovery from the declines seen in 2010l; however, Q112 saw an overall decline in chemicals and petrochemicals output, mirroring overall trends in manufacturing, and exports point to a slump in growth over the rest of the year. This points to a contraction in 2012. The impact of a downturn on the chemicals industry will depend on the strength of the pound sterling and the weakness of export markets. With surplus capacity likely to be a feature across Europe in 2012, the UK’s competitiveness will determine the size of contraction.
We believe there will be scope for petrochemicals producers to maintain profitability and sustain volumes even after they cut product prices in an effort to respond to an increasingly volatile market. The extent to which they will be able to find a balance will be determined by relative exchange rates as well as the rate of decline in demand growth and inventory build-up. A collapse in the eurozone could wipe out any advantage in weakening naphtha feedstock prices, thereby hitting producers’ bottom lines.
Over the last quarter BMI has revised the following forecasts/views:
- We have revised our forecasts from last quarter (when we anticipated growth of 0-1%) and now expect the chemicals industry to suffer a double-dip recession in 2012, in line with broader economic trends. BMI does not preclude the possibility of a return to 2010 rates of output, with the recovery witnessed in 2011 now set to be wiped out.
- Cracker margins are likely to hold up if naphtha values hold at the levels seen going into Q212. Weakening oil prices are being passed on through the downstream value chain, although benefits could be eroded by any strengthening of the US dollar relative to pound sterling.
- The UK scores 72.0 points in BMI’s latest Western Europe Risk/Reward Ratings (RRRs), a score that is unchanged since the previous quarter. The country remains in fourth place in the ratings, coming in 0.4 points behind the Netherlands and 1.0 point ahead of Belgium. SHOW LESS READ MORE >
Executive Summary 5
SWOT Analysis 7
UK Political SWOT 7
UK Economic SWOT 8
UK Business Environment SWOT 8
Global Petrochemicals Overview 9
Petrochemicals Market Overview 9
Table: World Ethylene Production By Country, 2011 And 2016 (‘000 tonnes capacity) 9
Financial Results 13
Table: Financial Results Of Major Petrochemicals Companies, 2011 13
Global Oil Products Price Outlook 14
Table: BMI's Refined Products Forecasts, 2010-2016 14
Regional Market Overview 23
United Kingdom Market Overview 28
Sector Overview 28
Competitive Landscape 29
Industry Trends And Developments 31
Industry Forecast Scenario 34
Table: United Kingdom – Petrochemicals Sector, 2008-2016 35
Petrochemicals Risk/Reward Ratings 37
UK Petrochemicals Risk/Rewards Ratings 37
Table: Western Europe Petrochemicals Business Environment Ratings 37
Macroeconomic Forecast 39
Table: United Kingdom – Economic Activity 42
Company Profiles 43
ExxonMobil Chemical 45
Shell Chemicals UK 48
Glossary Of Terms 49
Table: Glossary Of Petrochemicals Terms 49
Demographic Outlook 50
Table: The United Kingdom's Population By Age Group, 1990-2020 ('000) 50
Table: The United Kingdom's Population By Age Group, 1990-2020 (% of total) 51
Table: The United Kingdom's Key Population Ratios, 1990-2020 52
Table: The United Kingdom's Rural And Urban Population, 1990-2020 52
BMI Methodology 53
How We Generate Our Industry Forecasts 53
Chemicals And Petrochemicals Industry 53
Cross Checks 54
Business Environment Ratings 55
Table: Petrochemicals Business Environment Indicators And Rationale 56
Table: Weighting Of Indicators 57