Israel Petrochemicals Report

Published 30 January 2015

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Israel Petrochemicals Report

BMI View: Lower naphtha prices will help support Israeli petrochemica ls margins over the medium term , while in the short-term producers will benefit from a recovery in the domestic market, according to BMI 's latest Israel Petrochemicals Report.

In the first 10 months of 2014, Israeli rubber and plastic production declined 1.1% year-on-year (y-o-y) while petroleum and chemical products output declined 2.4%. Downtime at Oil Refineries Ltd's (ORL) hydrocracker in September did not help output volumes, but improved margins in petrochemicals helped shore up its profitability.

In 2014, Israel's petrochemicals industry included capacities of 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, according to BMI estimates. BMI does not envisage any substantial increase in capacities during our forecast period (ending in 2019), and there are no plans for any new petrochemicals plants over the medium term.

  • The domestic market will be supported by a recovery from a poor performance in 2014 when the economy was hit by the effects of the government's conflict with Hamas in Gaza, but the strength of this recovery will be determined in large part by the security situation.

  • Israeli petrochemicals competitiveness will continue to be determined by naphtha and the risks are to the upside in the country's relatively small, naphtha-fed petrochemicals industry, this will be crucial to ongoing profitability.

  • In BMI's MEA Petrochemicals Risk/Reward Index (RRIs) matrix, Israel remains in sixth place, although its score has declined 0.7 points to 56.3 points as a result of a decline in its country risk score. The Palestinian issue and strained relations with its neighbouring countries have led to a precarious security situation that is having a wide-ranging effect on the country. Nevertheless, it...

Table of Contents

BMI Industry View
7
SWOT
8
Political
9
Economic
10
Business Environment
11
Industry Forecast
12
Table: Israel's Petrochemicals Sector, 2011-2018 ('000 tpa, unless otherwise stated)
13
Macroeconomic Forecasts
15
Table: Israel - Economic Activity
20
Industry Risk Reward Ratings
21
MEA Petrochemicals Risk/Reward Ratings
21
Table: MEA Petrochemicals Risk/Reward Ratings, Q314
23
Israel Petrochemicals Risk/Reward Ratings
23
Market Overview
25
Table: Israel's Petrochemical Sector - Cracker Capacity, ('000 tpa) 2010-2018
26
Industry Trends And Developments
27
Upstream
27
Company Profile
30
Oil Refineries Ltd (ORL)
30
Israel Chemicals Ltd (ICL)
34
Regional Overview
37
Middle East And Africa Overview
37
Looking To Asia
38
Diversification The Long-Term Focus
40
African Growth Focused In The North
40
Global Industry Overview
44
Table: Top 10 Ethylene Producers, 2013
47
Latin America: The Main Loser In US Expansion Drive
48
Asia: New Growth Markets Fuel Global Demand
49
Challenges For The Arabian Gulf
50
Russia And CIS: Coming To The Fore
50
Gasoline
52
Table: BMI Gasoline Price Forecast, 2012-2018
52
Weak Q114 For Gasoline
53
Europe And The US: Competitive Market To Limit Summer Gains
54
Asia: Market Rebalancing To Better Support Market
57
Risks To Outlook
60
Diesel
60
Table: BMI Crude Oil And Diesel Price Forecast (USD/bbl)
61
New York's One-Off Heat Up
61
NY: Short-Term Diesel Price Support Expected
64
Rotterdam: Green Policies Drive Diesel Forward
68
Singapore: Diesel Support With Power Risks
70
Risks To Outlook
74
Jet Fuel
75
Table: BMI Crude Oil & Jet Fuel Price Forecast, USD/bbl
75
Better Outlook Tames Price Fall
75
Table: Total Air Freight And Passenger Volume Growth
77
Risks To Outlook
80
Bunker fuel
81
Table: BMI Crude Oil & Bunker Fuel Price Forecast (USD/bbl)
81
The Storm Clears For Shipping
82
(Slightly) Better Times For Bunker Prices
84
Long-Term Threats Linger
85
Pressing Rotterdam & New York Harder
87
Risks To Outlook
87
Demographic Forecast
89
Demographic Outlook
89
Table: Israel's Population By Age Group, 1990-2020 ('000)
90
Table: Israel's Population By Age Group, 1990-2020 (% of total)
91
Table: Israel's Key Population Ratios, 1990-2020
92
Table: Israel's Rural/Urban Population Split, 1990-2020
92
Glossary
93
Table: Glossary Of Petrochemicals Terms
93
Methodology
94
Industry Forecast Methodology
94
Risk/Reward Ratings Methodology
96
Table: Petrochemicals Risk/Reward Rating Indicators
97
Table: Weighting Of Indicators
98

The Israel Petrochemicals Report has been researched at source, and features Business Monitor International (BMI)'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.

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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