The Belgian economy has enjoyed a relatively stronger economic recovery than other eurozone member states, which has lifted its plastic and rubber output. However, the high degree of financial and trade integration with the eurozone mean the economy is highly exposed to a regional downturn, and the impact of Brexit and this instability will be reflected in Belgium's petrochemicals outlook.
Belgium benefits from a massive, highly integrated refining and petrochemicals hub in and around the Port of Antwerp, which is the lynchpin of both the country's export-oriented manufacturer sector and the supplier of energy resources and derivatives to neighbouring countries. In the first eight months of 2016, the plastic and rubber sectors performed better than they had in 2015 with growth of 2.0% and 4.8% respectively, although chemicals output fell by a further 4.1%, marking a second successive year of decline.
The attractiveness of the Belgian petrochemicals industry and growth in European propylene demand has prompted Borealis to look to create an on-purpose propylene investment at Kallo, near Antwerp. In September 2016, Borealis announced a feasibility study for a new, world-scale propane dehydrogenation (PDH) plant, which is due to be concluded in mid-2017 with a final investment decision in Q318 and potential start-up in H221. The new PDH plant would have a targeted production capacity of 740,000 tonnes per annum (tpa), making it one of the largest PDH facilities in the world. The Borealis Kallo location has been chosen due to its excellent logistical position and its experience in propylene production and handling.
In 2016, Belgium had ethylene capacity of 2.54mn tpa with intermediate and aromatics capacities of 870,000tpa benzene, 890,000tpa ethylbenzene, 1.94mn tpa ethylene dichloride, 810,000tpa vinyl chloride monomer and 600,000tpa xylenes. In terms of polymers, Belgium has capacities of 1.64mn tpa high density polyethylene, 930,000tpa low density polyethylene, 2.1mn tpa polypropylene, 475,000tpa polyvinyl chloride and 645,000tpa polystyrene. These capacities are unlikely to change over the next five years.
A major challenge could come from outside Europe with Belgium's Port of Antwerp becoming the favoured point of entry for Iranian petrochemicals, which are set to flood the global market when sanctions are due to be lifted some time in 2016. Iranian polymers are likely to be more competitively priced, and with Europe a major target market, prices of basic polymers are expected to be depressed further. While low naphtha - 70% of total feedstock - protected Belgian margins in 2015, lower product prices could squeeze profits and undermine operations.
Belgium scores 71.4 points in BMI's Europe Risk/Rewards Index for the petrochemical industry, a decline of 0.8 points since the previous year due to a significant decline in its country and market risk ratings. Nevertheless, it retained its fourth place in the European rankings, 0.2 points behind the UK and 0.1 point ahead of France. While it is unlikely to rise up the rankings over coming quarters, it could increase its lead over neighbouring France where capacities are in the process of being cut.
The Belgium 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 Belgium Petrochemicals Report provides industry professionals and strategists, sector analysts, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Belgian petrochemicals industry.
- Benchmark BMI's independent petrochemicals industry forecasts to test other views - a key input for successful budgetary and planning in the Belgian petrochemicals market.
- Target business opportunities and risks in the Belgian petrochemicals sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Belgium.
- 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.