Taiwan Petrochemicals Report 2013
- ID: 2323420
- November 2012
- Region: Taiwan
- 57 pages
- Business Monitor International
BMI’s Taiwan Petrochemicals Report examines the challenges facing the country’s petrochemicals industry, which possesses ageing plants that are frequently prone to outages and where opposition against expansion has grown. BMI analyses the threat of potential market saturation in mainland China on industry growth over the medium-term.
BMI estimates that in 2012 chemicals and rubber production declined by over 3% y-o-y while plastics production growth stagnated. The trend is likely to worsen going into 2013 as the Chinese market – the principal destination for Taiwanese petrochemicals exports – exhibits slowing consumption of polymers.
Yet, even in the advent of increased external demand, production growth may prove elusive. The Kuokuang project would have provided 1.2mn tonnes per annum (tpa) ethylene fed by a 300,000 barrel per day (b/d) refinery, thereby resolving ethylene shortages forecast for 2015 when the 500,000tpa No.5 naphtha cracker in Greater Kaohsiung’s Nanzih District is closed down; however, the project has been turned down for environmental reasons. Formosa Petrochemicals’ plans to increase ethylene capacity at Mailiao are also facing opposition from environmentalists. Although the proposed project will only increase the capacity of the cracker by 6%, the opposition to the plant could jeopardise other planned expansions at Mailiao that would add value down the petrochemicals chain, particularly in the expansion of PP, PTA and aromatics.
BMI has made the following revisions to its forecast:
- BMI believes total available ethylene production capacity will rise to 4.54mn tpa in 2013.
However, the closure of 500,000tpa of capacity in 2015 will ensure that Taiwan ends the forecast period with 3.99mn tpa ethylene capacity. This may well lead to Taiwan becoming a net importer of ethylene over the medium-term.
- Taiwan’s reliance on naphtha streams, derived from refining imported crude, give it little margin to compete with ethane-based producers in the Middle East unless oil prices drop significantly and at a faster rate than the drop in petrochemical prices.
- CPC is set to bring its new 600,000tpa cracker at Linyuan into operation in Q113. The facility replaces the 230,000tpa No.3 cracker and also includes capacities of 430,000tpa propylene,
90,000tpa benzene and 130,000tpa butadiene. This is likely to provide the only growth in basic chemicals capacity over the forecast period.
- While Taiwan’s Petrochemicals Risk/Reward Ratings (RRRs) score rose 0.7 points this year to 69.5 on the back of improved country risk ratings, the country has slipped one place to sixth in BMI’s Petrochemical Ranking for Asia, falling 0.2 points behind Thailand and 2.7 points ahead of Malaysia. SHOW LESS READ MORE >
Executive Summary 5
SWOT Analysis 6
Taiwan Petrochemicals Industry SWOT 6
Taiwan Political SWOT 6
Taiwan Economic SWOT 7
Taiwan Business Environment SWOT 8
Global Petrochemicals Overview 9
Global Oil Products Price Outlook 13
Table: BMI's Refined Products Forecasts, 2010-2016 14
Table: Middle East Outperforms In Terms of Passenger Growth 18
Emerging Asia Petrochemicals Overview 23
Taiwan Market Overview 27
Table: Taiwan’s Olefins Facilities 28
Table: Taiwan’s Polyolefins Facilities 29
Table: Taiwan’s Aromatics Facilities 30
Industry Trends And Developments 31
Asia Petrochemicals Risk/Reward Ratings 33
Table: Asia Petrochemicals Business Environment Ratings 35
Industry Forecast Scenario 36
Table: Taiwan’s Petrochemicals Sector, 2010-2017, (‘000 tpa, unless otherwise stated) 38
Macroeconomic Outlook 40
Table: Taiwan – Economic Activity, 2011-2016 42
Company Profile 43
Formosa Plastics Group 43
Table: 2011 Financial Highlights of Formosa Plastics Group (US$’000) 46
Chinese Petroleum Corporation (CPC) 47
Table: CPC’s long-term investments, 2011 and 2010 (TWD bn) 50
BASF Taiwan 51
Glossary Of Terms 52
Table: Glossary Of Petrochemicals Terms 52
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 55
Table: Weighting Of Indicators 56