Ukraine Petrochemicals Report Q1 2013
- ID: 2373268
- January 2013
- Region: Ukraine
- 54 pages
- Business Monitor International
The Ukraine petrochemicals report examines the impact of external factors on Ukraine's troubled chemicals industry, particularly in relation to currency depreciation, feedstock costs and competitiveness.
The report looks at the problems facing polyvinyl chloride (PVC) production, an area of downstream development that is now threatened with closure. Furthermore, we also analyse the expansion plans outlined by the leading players in the petrochemicals industry as they seek to boost their share of the Russian market.
In 9M12, chemicals and petrochemicals production grew 9.5% year-on-year (y-o-y) but basic chemicals declined 2.8%. Rubber production fell 6.3% y-o-y and plastic output grew 3.3% y-o-y as domestic and external demand came under pressure. Over the period, the production of plastics in primary forms totalled 417,800 tonnes. While this represented an increase of 5.2% y-o-y, growth was concentrated in H112; in Q312, output declined 24% y-o-y to 122,600 tonnes.
The situation is precarious and we anticipate stagnation in exports. Ukraine's balance of payments dynamics remain precarious, and growing imbalances continue to point towards a 2.6% decline in the value of the hryvnia against the US dollar in 2012 and a further 12% decline in 2013. This will have the effect of both raising the cost of feedstock and reducing the value of exports in hryvnia. Producers will therefore be looking to exports to increase margins, a situation that BMI believes will be extremely challenging in a highly competitive environment. A weak external scenario has huge implications for Ukraine's economy, which is heavily geared towards the export sector (on which petrochemicals depends), with exports of goods and services accounting for close to 50% of GDP. Domestic economic mismanagement is also damaging the country's growth prospects.
Over the last quarter BMI has revised the following forecasts/views:
- BMI estimates that full year primary plastics production fell 4%, a downward revision from our previous forecast of 3% growth.
- The idling of the Karpatneftekhim complex, which includes 200,000 tonnes per annum (tpa)
caustic soda, 180,000tpa chlorine, 250,000tpa ethylene and 100,000tpa polyethylene (PE), is directly leading to losses in Ukrainian polymers production and has heightened industry risk.
- Proposals for a 6.5% anti-dumping tariff on PVC imports could lead to the reopening of Karpatneftekhim, but would raise costs and therefore prices for downstream manufacturers,
further eroding the competitiveness of Ukrainian plastics conversion.
- Ukraine has fallen from eighth to ninth place in BMI's Central and Eastern Europe Petrochemicals Risk/Reward Ratings (RRRs) matrix, with its score falling 0.4 points to 39.8 as a result of declining market risk. It currently sits 1.7 points behind Bulgaria and 5.1 points ahead of Azerbaijan. SHOW LESS READ MORE >
Executive Summary 5
SWOT Analysis 7
Ukraine Petrochemicals Industry SWOT 7
Ukraine Political SWOT 7
Ukraine Economic SWOT 8
Ukraine 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
European Petrochemicals Overview 23
Ukraine Market Overview 27
Table: Ukraine's Petrochemicals Sector - Cracker Capacity, 2009-2016 ('000tpa) 27
Industry Trends and Developments 28
Table: Refineries In Ukraine 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
Ukraine Risk/Reward Ratings 33
Industry Forecast Scenario 35
Petrochemicals Outlook 35
Table: Ukraine Petrochemicals--Olefin & Polyolefin Data and Forecasts, 2010-2017 37
Macroeconomic Outlook 38
Table: Ukraine - Current Account 40
Company Profiles 41
Glossary of Terms 45
Table: Glossary Of Petrochemicals Terms 45
Country Snapshot 46
Table: Ukraine's Population By Age Group, 1990-2020 ('000) 47
Table: Ukraine's Population By Age Group, 1990-2020 (% of total) 48
Table: Ukraine's Key Population Ratios, 1990-2020 49
Table: Ukraine's Rural And Urban Population, 1990-2020 49
BMI Methodology 50
How We Generate Our Industry Forecasts 50
Chemicals And Petrochemicals Industry 50
Cross Checks 51
Business Environment Ratings 52
Table: Petrochemicals Business Environment Indicators And Rationale 52
Table: Weighting Of Indicators 53