Israel Petrochemicals Report

Providing expert analysis, independent forecasts and competitive intelligence on the petrochemicals.

Report includes: BMI Industry View, Industry SWOT Analysis, Industry Forecasts, BMI's Petrochemicals Risk Reward Index, Economic Forecasts, Company Profiles and Global, Regional and Country Industry Overviews.

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Israel Petrochemicals Report
Product Price
$1,295.00

Although Israeli petrochemical prices declined in 2015, margins improved as a result of falling naphtha costs even as sales stagnated. Israel's refinery sector has capitalised on imports of oil from Kurdistan as well as lower global oil prices, which has been fed through the production chain. With economic growth set to pick up in 2016, the outlook for the country's petrochemicals market is brightening, although capacity constraints will limit volumes.

Despite 1.7% manufacturing growth and improving economic performance, the petrochemicals industry witnessed lacklustre growth in 2015. In 10M15, plastic and rubber output declined 0.7% y-o-y, compared to 0.8% growth in 2014. Meanwhile chemicals declined 0.1%. In 9M15, Israel's main petrochemicals producer, Bazan Group, reported that aromatics output was down 4.7% to 365,000 tonnes, but polymers production grew 1.5% to 481,000 tonnes, indicating that the industry's performance varied across market segments.

Naphtha costs will be crucial over the medium term to defending and growing petrochemicals margins. The theoretical surplus between supply and demand in the global oil market will grow over the coming years, precipitating a decline in the price of oil and a corresponding decline in naphtha feedstock costs. For Israel's relatively small, naphtha-fed petrochemicals industry, this will be crucial to ongoing profitability. However, at issue are the sector's ageing plants, which are under investigation for environmental crimes with calls for closure due to the effects of operations on residents. The efficiency of the plants brings into question their long-term competitiveness. While BMI does not envisage an imminent closure, long-term stagnation is likely.

  • Israel's petrochemicals capacities are likely to remain unchanged over the next five years with 450,000 tonnes per annum (tpa) ethylene, 345,000tpa propylene, 125,000tpa benzene, 230,000tpa xylenes, 165,000tpa polyethylene (PE), 450,000tpa polypropylene (PP), 160,000tpa polyvinyl chloride (PVC) and 60,000tpa of methanol.

  • We forecast the Israeli economy to grow by 3.4% in 2016 compared to our estimate of 2.1% in 2015, but below the 4.2% average recorded between 2004 and 2014. Rising security threats will present the main challenge to industry growth.

  • In BMI's Middle East and Africa Petrochemicals Risk/Reward Index matrix, Israel remains in sixth place, but its score has risen 0.9 points to 57.2 points this quarter as the country's economy will expand faster than most of its developed peers, in line with the past decade's trend. It retains the Middle East's best country risk score. Israel lies 1.5 points behind Kuwait and 5.7 points ahead of South Africa in the regional petrochemicals matrix. In spite of this improvement, it is unlikely that Israel will see movement in its ranking in the foreseeable future

BMI Industry View
7
SWOT
8
Political
10
Economic
12
Operational Risk
13
Industry Forecast
15
Table: Israel's Petrochemicals Sector, 2011-2019 ('000 tpa, unless otherwise stated)
19
Macroeconomic Forecasts
20
Israel - Private Consumption And Exports To Drive Growth Acceleration
20
GDP By Expenditure Outlook
22
Table: Private Consumption Forecasts
24
Table: Government Consumption Forecasts
24
Table: Fixed Investment Forecasts
25
Table: Net Exports Forecast
25
Industry Risk Reward Ratings
26
MEA Petrochemicals Risk/Reward Index
26
Table: MEA Petrochemicals Risk/Reward Index - Q1 2016
31
Israel Risk/Reward Index
32
Market Overview
33
Industry Trends And Developments
35
Upstream
36
Company Profile
39
Oil Refineries Ltd (ORL)
39
Israel Chemicals Ltd (ICL)
43
Regional Overview
46
Middle East And Africa Overview
46
Market Diversification Crucial To Growth
48
Tightening Ethane Supplies
49
Diversification Is The Long-Term Focus
51
Africa Falls Behind
51
Global Industry Overview
53
Feedstock Differentials: Respite for Europe
53
2016 Feedstock Outlook
55
Could US Gas Run out-
56
Market Outlook: Chinese Downturn
57
Long-term Outlook
57
Europe - Brent On Board For A Bumpy Ride
61
Demographic Forecast
62
Table: Population Headline Indicators (Israel 1990-2025)
63
Table: Key Population Ratios (Israel 1990-2025)
64
Table: Urban/Rural Population & Life Expectancy (Israel 1990-2025)
64
Table: Population By Age Group (Israel 1990-2025)
65
Table: Population By Age Group % (Israel 1990-2025)
66
Glossary
67
Table: Glossary Of Petrochemicals Terms
67
Methodology
68
Industry Forecast Methodology
68
Risk/Reward Index Methodology
70
Table: Petrochemicals Risk/Reward Index Indicators
71
Table: Weighting Of Indicators
72

The Israel 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 Israel Petrochemicals Report provides industry professionals and strategists, sector analysts, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Israeli 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 Israeli petrochemicals market.
  • Target business opportunities and risks in the Israeli petrochemicals sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Israel.
  • 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.