The Australian petrochemicals industry is on the brink, faced with potential feedstock supply problems, a lack of competitiveness and a saturated market. The closure of the country's automotive industry in 2017 will further dampen the sector's hopes of growth.
Polymer output declined 1.3% y-o-y in the first nine months of 2015 amid a worsening terms of trade and unwinding investment boom. The strengthening of the Australian dollar combined with falling Asian polymer prices hit the competitiveness of the petrochemicals industry. Additionally, the industrial sector as a whole underperformed.
The Australian petrochemicals industry is small and its plants are ageing. Faced with over-supply in the Asian market due to the Chinese slowdown and growth in ethane-based production in the US, the country's leading petrochemicals producer Qenos is facing uncertainty. Even the growth of gas production is unlikely to shelter it from the challenges facing the industry.
The ending of automotive production in 2017 will cut demand for plastics and rubber from automotive industry suppliers, who represent an important petrochemicals market sector.
In 2015, Australia's petrochemicals capacities remained unchanged with ethylene capacity of 550,000 tonnes per annum (tpa), polyethylene capacity of 455,000tpa, polypropylene output of 355,000tpa, polyvinyl chloride production of 140,000tpa and polyethylene terephthalate (PET) capacity of 65,000tpa. Petrochemicals capacities are unlikely to change over the forecast period and in global terms output will remain modest.
An ethane supply deal between petrochemicals producer Qenos and gas producer Santos, which lasts until 2019, will give a temporary reprieve to petrochemicals
Australia's Risk/Reward Index comes in at 61.5 out of 100, down 1.6 points since 2015. As a result, the country takes ninth spot in the Asia Pacific region, down one place over a year, ahead of Indonesia and behind India. While Australia continues to score strongly in the risks category, the relatively small scale of the domestic petrochemicals industry means its overall score is dragged down in the rewards category.
The Australia 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 Australia Petrochemicals Report provides industry professionals and strategists, sector analysts, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Australian petrochemicals industry.
- Benchmark BMI's independent petrochemicals industry forecasts to test other views - a key input for successful budgetary and planning in the Australian petrochemicals market.
- Target business opportunities and risks in the Australian petrochemicals sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Australia.
- 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.