Argentina Petrochemicals Report

Published 20 November 2014

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Argentina Petrochemicals Report

With gas on the decline and a cautious approach to investment in the country's shale potential, Argentina's petrochemicals industry is unlikely to see growth over the next five years, according to BMI's latest Argentina Petrochemicals Report.

The Argentine petrochemicals industry faced a major challenge in 2014 when growth from the previous year was wiped out by a contraction in plastics and rubber production. This coincided with a downturn in the economy. Tepid private consumption growth is expected to continue into 2015, leading to further pressure on local producers.

Gains reported in ethylene and polyethylene (PE) in 2013 were reversed in 2014 with the downturn likely to have undermined that recovery with the total cracker utilisation rate at around 15% below full capacity. At the same time, PE was also under pressure, partly as a result of market dynamics with the influx of lower priced PE imports.

  • Winter is traditionally a slow time for Argentine petrochemicals producers, who are competing with electricity production for gas. Mid-2015 will see a downturn in production, exacerbated by pre-existing feedstock shortages. On the upside, depreciation of the peso should give the industry some protection from an influx of petrochemical imports from Brazil.

  • PVC output is facing pressure from a weak construction sector, which is set to recover slowly from a 2% contraction in 2014. However, construction growth will be driven by energy and transport infrastructure projects which will have a more limited impact than residential construction and as such growth in PVC is likely to be small, if at all.

  • Argentina's petrochemicals capacity remains small, with olefins nameplate capacity at 700,000tpa of ethylene and 355,000tpa of propylene. Polyolefins capacity is just over 1.2mn tpa. There are no plans for major additions to olefins and polyolefins capacities, so the scope for production growth will be limited.

  • The success of the development of the Vaca Muerta...

Table of Contents

BMI Industry View
7
SWOT
8
Political
9
Economic
10
Business Environment
11
Industry Forecast
12
Table: Argentina's Petrochemicals Sector, 2011-2019, ('000 tpa, unless otherwise stated)
16
Macroeconomic Forecasts
18
Table: Economic Activity (Argentina 2009-2018)
23
Industry Risk Reward Ratings
24
Americas Petrochemicals Risk/Reward Index
24
Divergence: Large Markets Take The Lead
25
Table: Americas Petrochemicals Risk/Reward Index (Scores Out Of 100)
27
Industry Risk Reward Ratings
28
Market Overview
29
Table: Argentina's Olefins Facilities
32
Table: Argentina's Polyolefins Facilities
33
Table: Argentina's Aromatics Facilities
34
Table: Argentina's Fertiliser Facilities
34
Industry Trends And Developments
35
Company Profile
37
Dow Chemical Company
37
Petrobras
38
Table: Financial Results (ARSmn)
40
YPF
41
Table: Financial Results (ARSmn)
43
Regional Overview
44
Middle East And Africa Overview
44
Losing cracker competitiveness
44
2015 Outlook
48
Diversification The Long-Term Focus
50
Global Industry Overview
52
China versus the US: feedstock wars
53
Table: Top 10 Ethylene Producers, 2013
57
Demographic Forecast
59
Table: Population Headline Indicators (Argentina 1990-2025)
60
Table: Key Population Ratios (Argentina 1990-2025)
60
Table: Urban/Rural Population & Life Expectancy (Argentina 1990-2025)
61
Table: Population By Age Group (Argentina 1990-2025)
61
Table: Population By Age Group % (Argentina 1990-2025)
62
Glossary
64
Table: Glossary Of Petrochemicals Terms
64
Methodology
65
Industry Forecast Methodology
65
Risk/Reward Index Methodology
67
Table: Petrochemicals Risk/Reward Index Indicators
68
Table: Weighting Of Indicators
69

The Argentina 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 Argentina Petrochemicals Report provides industry professionals and strategists, sector analysts, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Argentinian petrochemicals industry.

Key Benefits

  • Benchmark BMI's independent petrochemicals industry forecasts to test other views - a key input for successful budgetary and planning in the Argentinian petrochemicals market.
  • Target business opportunities and risks in the Argentinian petrochemicals sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Argentina.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. KPIs and latest activity).

Coverage

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.

Market Overview

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.

Company Profiles*

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.

Sources

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.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc