Poland Petrochemicals Report

Published 20 February 2015

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Poland Petrochemicals Report

Growth of just 0.1% in overall plastics production marked a gloomy year for Polish petrochemicals producers in 2014. Declines in major polymers and rubbers were only partly offset by a fall in naphtha feedstock prices later in the year. However, BMI's Poland Petrochemicals Report anticipates a stronger performance in 2015 when petrochemicals margins are expected to recover amid lower costs and improved export orders.

In 2014 Poland had olefins of 760,000tpa ethylene, 475,000tpa propylene and 60,000tpa butadiene. Polymer capacities include 320,000tpa high-density polyethylene (HDPE), 170,000tpa low-density polyethylene (LDPE), 400,000tpa PP, 550,000tpa PVC, 90,000tpa polystyrene (PS) and 120,000tpa polyethylene terephthalate (PET). In the fertiliser segment, it had capacities of 1.4mn tpa in both ammonia and urea.

In 2014, the main losers were PVC and polypropylene, which fell 10.1% and 10.8% respectively. The root causes were lacklustre performance in the construction and automotive industries and poor performance of exports on the German market. Both petrochemicals end-use markets are expected to improve in 2015 with a recovery in the eurozone market as well as rising investment in the domestic industry.

There is plenty of room for growth with under-utilised petrochemicals facilities allowing for rapid growth in production. These trends could prompt growth in capacities in the long-term. Plans outlined by Polish refiners Grupa Lotos and Grupa Azoty, which are considering building a 1mn tpa petrochemicals complex in Gdansk, could represent the biggest petrochemicals investment in Poland for many years. However, it is unlikely that the complex will come on-stream before 2019 and much depends on access to competitively priced feedstock.

The fall in Polish petrochemicals output in 2014 along with a deterioration in long-term country risk scores has prompted BMI to downgrade its Petrochemicals Risk/Reward Index (RRI) score by 0.3 points to 58.8 points. However, it...

Table of Contents

BMI Industry View
7
SWOT
8
Political
10
Economic
11
Business Environment
12
Industry Forecast
13
Table: Polish Petrochemicals Sector, 2012-2018 ('000tpa, unless otherwise stated)
17
Macroeconomic Forecasts
18
Risks To Outlook
22
Table: Poland - Economic Activity
22
Industry Risk Reward Ratings
23
Europe Petrochemicals Risk/Reward Ratings
23
Table: European Petrochemicals Risk/Reward Ratings (Scores Out Of 100)
27
Poland Petrochemicals Risk/Reward Ratings
28
Market Overview
29
Industry Trends And Developments
32
Capacity Expansions
32
PKN Orlen strategy 2013-2017
33
Upstream
33
Merger And Acquisitions
34
Company Profile
37
Polski Koncern Naftowy Orlen (PKN Orlen)
37
Anwil
41
Grupa Lotos
43
Table: Grupo Lotos financial results (PLNmn)
46
Regional Overview
48
Europe Overview
48
Regulatory Concerns Add To Competitiveness Issues
48
Declining Capacities
49
Table: European Cracker Capacities, 2013
55
Global Industry Overview
59
Table: Top 10 Ethylene Producers, 2013
62
Latin America: The Main Loser In US Expansion Drive
63
Asia: New Growth Markets Fuel Global Demand
64
Challenges For The Arabian Gulf
65
Russia And CIS: Coming To The Fore
65
Gasoline
67
Table: BMI Gasoline Price Forecast, 2012-2018
67
Weak Q114 For Gasoline
68
Europe And The US: Competitive Market To Limit Summer Gains
69
Asia: Market Rebalancing To Better Support Market
72
Risks To Outlook
75
Diesel
75
Table: BMI Crude Oil And Diesel Price Forecast (USD/bbl)
76
New York's One-Off Heat Up
76
NY: Short-Term Diesel Price Support Expected
79
Rotterdam: Green Policies Drive Diesel Forward
83
Singapore: Diesel Support With Power Risks
85
Risks To Outlook
89
Jet Fuel
90
Table: BMI Crude Oil & Jet Fuel Price Forecast, USD/bbl
90
Better Outlook Tames Price Fall
90
Table: Total Air Freight And Passenger Volume Growth
92
Risks To Outlook
95
Bunker Fuel
96
Table: BMI Crude Oil & Bunker Fuel Price Forecast (USD/bbl)
96
The Storm Clears For Shipping
97
(Slightly) Better Times For Bunker Prices
99
Long-Term Threats Linger
100
Pressing Rotterdam & New York Harder
102
Risks To Outlook
102
Demographic Forecast
104
Table: Poland's Population By Age Group, 1990-2020 ('000)
105
Table: Poland's Population By Age Group, 1990-2020 (% of total)
106
Table: Poland's Key Population Ratios, 1990-2020
107
Table: Poland's Rural And Urban Population, 1990-2020
107
Glossary
108
Table: Glossary Of Petrochemicals Terms
108
Methodology
109
Industry Forecast Methodology
109
Risk/Reward Ratings Methodology
111
Table: Petrochemicals Risk/Reward Rating Indicators
112
Table: Weighting Of Indicators
113

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