Algeria has focused on low added-value production, relying on commodity chemicals that are highly price-responsive to market fluctuations and easily undermined by capacity elsewhere in the world. The industry is some distance from competing on equal terms with European petrochemicals producers with regard to product diversification. As a result, it will be vulnerable to market fluctuations in the narrow range of products it produces, although the effects on margins should be cushioned by the local availability of competitively priced feedstock.
Domestic consumption of petrochemicals is set to be lacklustre in 2016, with economic growth at a relatively subdued 2.9% and consumer and business confidence remaining low. Lower oil prices are responsible for the erosion of economic performance. Additionally, they militate against Algeria's ability to capitalise on its gas resources to establish gas-based petrochemicals production.
The country has around 178,000 tonnes per annum (tpa) of polyethylene, 40,000tpa of vinyl chloride monomer, 35,000tpa of polyvinyl chloride, 120,000tpa of methanol and 990,000tpa of ammonia, which should increase to 5.6mn tpa when new fertiliser plants enter production. These rises in capacity will also result in the production capacity for urea hitting 3.59mn tpa.
BMI has removed 1mn tpa of extra methanol capacity from the five-year forecast due to slow progress on announced projects.
Based on data from the Ministry of Energy & Mines (MEM), we estimate crude and lease condensates production of 1.37mn barrels per day (b/d) in 2014, y-o-y growth of 4.6%. The growth is significant, ending six consecutive years of decline. However, in 2015 we estimate the sector endured a decline in output of 3.2% to 1.33mn b/d.
We have revised down our 2015 gas production forecast, based on data released from the MEM and due to repeated delays to output from the third train at In Amenas. We now forecast 2015 gas production at 82.3bn cubic metres, a y-o-y decline of 2.0%. The volatility of oil refinery output and declining gas production will be a disincentive to expand petrochemicals production.
Algeria's Petrochemicals Risk/Reward Index (RRI) score remains unchanged this quarter at 35.0 out of 100, down 0.2 points since the previous quarter due to a downward revision in its country risk score. This maintains its bottom place in the table for the Middle East and Africa RRI table. The falling price of oil has undermined the refining sector, while market activity is increasingly sluggish. With no new petrochemicals capacities expected in the next five years, it is unlikely Algeria's position will improve.
The Algeria Petrochemicals Report has been researched at source, and features BMI Research'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 Algeria Petrochemicals Report provides industry professionals and strategists, sector analysts, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Algerian petrochemicals industry.
- Benchmark BMI's independent petrochemicals industry forecasts to test other views - a key input for successful budgetary and planning in the Algerian petrochemicals market.
- Target business opportunities and risks in the Algerian petrochemicals sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Algeria.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. KPIs and latest activity).
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis, covering the petrochemicals markets, regulatory changes, major investments, projects and company developments.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the petrochemicals sector and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (2009-2013) and forecasts to end-2019 for key industry and economic indicators, supported by explicit assumptions, plus analysis of key risks to the main forecasts. Indicators include:
- Energy: Oil production (‘000 b/d), oil consumption (‘000 b/d), net oil exports (‘000 b/d), gas production (bcm), gas consumption (bcm), net gas exports (bcm), oil refinery capacity (‘000 b/d).
- Petrochemicals: Ethylene capacity (‘000 tpa), ethylene production (‘000 tpa), ethylene consumption (‘000 tpa), polyethylene capacity (‘000 tpa), polypropylene capacity (‘000 tpa), polyvinyl chloride capacity (‘000 tpa), polyolefins consumption (‘000 tpa).
- Oil Products Prices: Price forecasts for all major oil-based products (USD/bbl) at major global energy trading hubs.
- Economic: Nominal GDP (USDbn), real GDP growth (%), GDP per capita (USD), population (mn), unemployment (%), exchange rate (against USD).
BMI’s Petrochemicals Risk Reward Index
BMI’s Risk Reward Indices provide investors (both corporate and financial) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.
Structure, size and value of the industry sector; overview of the industry landscape and key players; assessment of the business operating environment and the latest regulatory developments.
Industry Trends & Developments
Evaluation of company and sector-wide developments, including key projects (as well as expansion plans), latest company financial details and proposed international ventures.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
Global & Regional Market Overview
Analysis of the key trends driving the global industry, including worldwide output/capacity and demand analysis across ethylene, polyethylene, polyvinyl chloride, polystyrene, polyethylene terephthalate and polypropylene. The regional analysis looks at the implications of local and global trends on specific company activity.
Sub-sectors covered by the Petrochemicals Reports include:
Oil & Gas, Oil Refining, Olefins (ethylene, propylene), Polyolefins (polyethylene, polypropylene), Polyvinyl Chloride, Polystyrene
Please note – not all country Reports cover all sub-sectors – see website for details.
The Petrochemicals Market Reports are based on a network of primary sources, such as multilateral organisations (ACC, APLA, Cefi c, ICCA, ICMA), national chambers of commerce and industry, national statistical offi ces, government ministries and central banks, and multinational companies.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.