The depreciation of the Brazilian real is having a positive effect on the share of local petrochemicals production sold on the Brazilian market. Although recovery is expected from 2017, it will be slow and will lack the stimulus needed to significantly raise petrochemicals consumption to pre-recession levels. The industry will need to improve competitiveness if it is to survive going forward, which will entail maintaining low feedstock prices and ensuring an attractive business environment. Producers will be looking for greater political stability to ensure certainty.
The level of petrochemicals capacity utilisation stood at 80% for the first eight months of the year, one percentage point higher than in the same period in 2015. Although output and sales were up, petrochemicals prices fell 11.4% in 8M16 due to the effects of declining costs of naphtha feedstock as well as depressed prices on global markets. Demand rose 1.7% y-o-y and domestic sales expanded by 1.6%. The trade balance has shifted towards exports, which rose 15.2% y-o-y in volume in 8M16 while imports fell 6.3%. However, margins on exports fell as producers sought to maintain stable operating levels. Output grew 3.1%, indicating a solid performance.
Total capacities over the next five years will include 3.7mn tpa of ethylene, 3.1mn tpa of propylene, 3.8mn tpa of polyethylene, 2.4mn tpa of polypropylene and 1.2mn tpa of polyvinyl chloride.
In Q316, Petrobras was holding exclusive negotiations with Mexican petrochemical company Alpek for the acquisition of the Brazilian state-owned oil company's petrochemical units. The subsidiaries include Petroquimica Suape and Citepe, which have significant polyester chain production.
Brazil remains in third place in our Americas Risk/Reward Index ranking, with its score rising by 0.4 points to 63.3 points.
The Brazil 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 Brazil Petrochemicals Report provides industry professionals and strategists, sector analysts, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Brazilian petrochemicals industry.
- Benchmark BMI's independent petrochemicals industry forecasts to test other views - a key input for successful budgetary and planning in the Brazilian petrochemicals market.
- Target business opportunities and risks in the Brazilian petrochemicals sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Brazil.
- 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.