Boston, MA -- (ReleaseWire) -- 09/04/2012 -- The Spain Petrochemicals Report examines the short-term impact of the eurozone crisis on the domestic industry and also assesses the long-term structural changes to the global petrochemicals industry.
The report will look closely at the potential for growth in the Spanish polymer segment at a time when there is both heightened risk and low levels of consumer confidence, particularly as the domestic construction industry lurches from one crisis to the next. It also analyses whether Spain has the ability to compete against the growing number of integrated facilities in the Middle East and Asia, with its ageing units generally functioning at a far lower capacity than producers in these regions.
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The outlook for the Spanish petrochemicals market has worsened considerably as the economic situation has deteriorated. Spending growth will remain negligible as the housing market continues to disintegrate, leading to a further contraction in PVC use. Additionally, packaging and consumer durables will be hit due to high unemployment, thereby depressing demand for all grades of polyethylene (PE) and polypropylene (PP).
There are, however, some bright spots. The downturn in the Spanish petrochemicals industry has prompted a wave of merger and acquisition (M&A) activity as some firms seek to limit their exposure, while others use the recession as an opportunity to consolidate and grow their market share. Some production capacity has also come back online. The resumption of operations at the polyethylene terephthalate (PET) plant at San Roque, after Compania Espanola de Petroleos (Cepsa) acquired it from La Seda de Barcelona (LSB) in 2011, is largely in response to a decline in imports from Asia. The reopening of the San Roque PET facility comes nearly a year after LSB brought its PET plant at El Prat de Llobregat, following a lengthy shutdown. It is to be expanded by 45,000 tonnes per annum (tpa) to 220,000tpa in 2013.
Over the last quarter BMI have revised the following forecasts/views:
- Spain scores 66.7 points, leaving it in sixth and last place in our Western Europe Petrochemicals Risk/Reward Ratings (RRRs). It lies 4.3 points behind Belgium.
- In July 2011, Artlant PTA began the commissioning of a 700,000tpa purified terepthalic acid (PTA) plant. The plant entered full production in March 2012 and is expected to generate revenue of more than EUR600mn per annum, 95% of which will come from exports.
- The decline in the downstream industries continued into Q112 when chemical output fell 1.8% y-o-y and plastic and rubber production dropped 6.2%.
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