Boston, MA -- (ReleaseWire) -- 06/03/2014 -- The positive effects brought about by external and domestic growth could be outweighed by the reduction in refining capacity, which risks limiting local feedstock availability, warns BMI's latest Czech Republic Petrochemicals Report. There is the potential for increased reliance on imported ethane and propylene, which creates uncertainty around the cost of Czech petrochemicals production. Meanwhile, the government's sustained fiscal austerity drive will feed through to lower household and government spending.
In Q114, Unipetrol's petrochemicals sales grew 9% y-o-y and 5% q-o-q to 440,000 tonnes. In the polymers segment, polyethylene was up 22% y-o-y to 73,000 tonnes but was down 7% q-o-q. Meanwhile, polypropylene sales rose 13% y-o-y and 16% q-o-q to 68,000 tonnes. The petrochemical segment was Unipetrol's key profit maker with an operating profit of CZK997mn in Q114. There was a significant improvement in the segment due to higher cracker utilisation, higher sales volumes, a more stable crude price and the strengthening euro against both the Czech koruna and the US dollar. As such, the trend of high margins was maintained. On the downside, refining margins worsened in Q114 compared to Q113, dropping to below minimums seen in the past five years. This was due to a lower diesel spread (USD106 per tonne in Q114 compared to USD122 in Q113) and particularly by significantly lower gasoline spread (USD141 per tonne in Q114 compared to USD189 in Q113).
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- From 2014 onwards, the recovery in private consumption should pick up speed, while dissipating uncertainty around the political environment, which in our view has been the main drag on investment growth, will facilitate deferred investment plans. We retain an upbeat outlook for the Czech economy in 2014-2015, and forecast real GDP growth to come in at 1.5% in 2014 and 2.4% in 2015. However, our growth forecast for 2014 remains below consensus as we do not believe export growth will be as robust as consensus projections...
The Czech Republic Petrochemicals Report has been researched at source, and features Business Monitor International (BMI)'s market assessment and independent forecasts for key petrochemicals sub-sectors. The report also analyses the impact of regulatory changes, recent developments and the background macroeconomic outlook and features competitive landscapes comparing companies by products and services, sales, market share, investments, projects, partners and expansion strategies.
BMI's Czech Republic Petrochemicals Report provides industry professionals and strategists, sector analysts, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Czech petrochemicals industry.
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