Hungary Petrochemicals Report Q1 2013
Business Monitor International, November 2012, Pages: 54
BMI’s Hungary Petrochemicals report examines planned investment in the country’s intermediate chemicals products, which will feed into the manufacturing chain serving the automotive sector.
However, the report warns that the industry will not escape recession and the fallout from the eurozone crisis, which will adversely impact the domestic export-oriented industries that remain the key consumers of Hungarian petrochemicals output.
Hungarian petrochemicals producer MOL reported a sharp drop in petrochemicals output through H112,
indicating that it has been badly hit by the downturn in EU demand, particularly at its domestic operations. MOL planned to boost toluene diisocyanate (TDI) output from 80,000 tonnes per annum (tpa)
to 260,000tpa, and methylene diphenyl diisocyanate (MDI) throughput from 140,000tpa to 360,000tpa by end-2012. This follows BorsodChem’s opening of a new 160,000tpa TDI plant in October 2011 and the commencement in mid-2011 of the expansion of its MDI plant from 90,000tpa to 240,000tpa. MOL is also investing HUF30bn (US$137mn) in a new butadiene plant which will help secure feedstock supplies for synthetic rubber production.
Aside from these growth segments, BMI anticipates that in 2013 Hungary will continue to have olefins production capacities of 660,000tpa ethylene and 400,000tpa propylene. Expansions in cracker capacity to 610,000tpa have helped reduce ethylene feedstock imports to virtually zero, with 90% of olefins output consumed within Hungary. It is also due to have polymer capacities of 400,000tpa high density polyethylene (HDPE), 210,000tpa low density polyethylene (LDPE), 650,000tpa polypropylene (PP) and 440,000tpa polyvinyl chloride (PVC). While basic chemicals capacities will largely remain static, there is a switch in emphasis towards adding value to the production chain and serving important industrial niches, particularly the automotive industry.
BMI has revised the following forecasts/views:
- The situation in Q212 was far worse than BMI had expected and this has prompted a radical downward revision of our petrochemicals output growth forecast for 2012 – from -10% to -29%.
Olefins are now set to decline 30% and polymers output will decline 27%.
- From a low base, the industry is likely to post growth in 2013, although confidence in a recovery is low.
- In the medium-term, investment is targeted at two key raw materials that feed into the manufacturing of car parts, namely isocyanates (used in automotive seating and other applications) and butadiene, which is used in tyre production.
- In BMI’s Central and Eastern Europe (CEE) Petrochemicals Risk/Reward Ratings (RRRs),
Hungary scores 57.8 points out of 100, placing it in fourth position, 0.9 points behind Poland and 7.7 points ahead of Slovakia. The score has not changed since the previous quarter.
BMI Industry View 5
SWOT Analysis 7
Hungarian Petrochemicals Sector SWOT 7
Hungary Political SWOT 7
Hungary Economic SWOT 8
Hungary Business Environment SWOT 9
Global Petrochemicals Overview 10
Global Oil Products Price Outlook 14
Table: BMI's Refined Products Forecasts , 2010-2016 15
Table: Middle East Outperforms In Terms of Passenger Growth 19
Europe Petrochemicals Overview 24
Hungary Market Overview 28
Industry Trends And Developments 29
Upstream Developments 29
Developments 29
MOL’s Strategy 30
Petrochemicals Risk/Reward Ratings 31
Central and Eastern European Regional Power Risk/Reward Ratings 31
Table: Central and Eastern European Petrochemicals Risk/Reward Ratings (Scores Out Of 100) 33
Hungary Petrochemicals Risk/Reward Ratings 33
Industry Forecast Scenario 34
Table: Hungary’s Petrochemical Industry, 2010-2017 (‘000tpa, unless otherwise stated) 34
Macroeconomic Outlook 36
Table: Hungary – Economic Activity, 2011-2016 38
Company Profiles 39
BorsodChem (BC) 39
Magyar Olaj-és Gázipari (MOL) 41
Tiszai Vegyi Kombinat (TVK) 44
Country Snapshot 45
Table: Hungary's Population By Age Group, 1990-2020 ('000) 46
Table: Hungary's Population By Age Group, 1990-2020 (% of total) 47
Table: Hungary's Key Population Ratios, 1990-2020 48
Table: Hungary's Rural And Urban Population, 1990-2020 48
Glossary Of Terms 49
Table: Glossary Of Petrochemicals Terms 49
BMI Methodology 50
How We Generate Our Industry Forecasts 50
Chemicals And Petrochemicals Industry 50
Cross Checks 51
Risk/Reward Ratings 52
Table: Petrochemicals Business Environment Indicators And Rationale 52
Weighting 53
Table: Weighting Of Indicators 53
BorsodChem (BC)
Magyar Olaj-és Gázipari (MOL)
Tiszai Vegyi Kombinat (TVK)
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