Taiwan Petrochemicals Report

Published 13 January 2015

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Taiwan Petrochemicals Report

Taiwan's petrochemicals industry depends on its ability to compete on the Asian market, but BMI's latest Taiwan Petrochemicals report states that the island could find itself crowded out as a result of rising Chinese self-sufficiency and growth in low-cost shale-based ethane-fed production in the US.

In 2014, Taiwan saw the beginning of a recovery in petrochemicals in line with overall manufacturing growth. Among the strongest end-use markets was the automotive industry, which helped offset lacklustre performance in other segments. Nevertheless, Taiwan has a small domestic market, relatively high labour costs compared with its neighbours, a strong environmentalist lobby and a large volume of FDI.

  • The island's producers will need to improve external competitiveness to boost output. This will depend on securing a reduction in tariffs on petrochemical exports to China to boost their competitive edge in the huge mainland market. The 10th round of talks for a cross-strait trade in goods pact or other trade negotiations are likely to be held in 2015, which producers hope will lead to a break-through and enable them to compete with South Korean producers for the Chinese market.

  • Taiwan's crude oil distillation capacity from four refineries is about 1.26mn b/d. However, the planned closure of the 220,000b/d Kaohsiung refinery in 2015 will likely bring the country's crude oil distillation capacity to 1.04mn b/d by the end of our forecast period, thereby slightly reducing naphtha availability.

  • The closure of 500,000tpa ethylene capacity in 2015 will ensure that Taiwan ends the forecast period with just under 4mntpa of ethylene capacity. This may well lead to Taiwan becoming a net importer of ethylene over the medium-term.

  • Taiwan's Petrochemicals Risk/Reward score fell 0.1 points in 2015 to 69.4 on the back of a deterioration in market risk scores as the country's ageing, naphtha-fed petrochemicals industry struggles to compete in a market where prices are falling...

Table of Contents

BMI Industry View
7
SWOT
8
Political
9
Economic
10
Industry Forecast
11
Table: Taiwan's Petrochemicals Sector ('000 tpa, unless otherwise stated)
14
Table: Taiwan's Petrochemicals Sector, 2010-2017, ('000 tpa, unless otherwise stated)
15
Macroeconomic Forecasts
17
Economic Analysis
17
Q414 Outlook Remains Cloudy
18
Headwinds To Persist-
20
But Economic Fundamentals Remain Strong
21
Table: Economic Activity (Taiwan 2009-2018)
22
Industry Risk Reward Ratings
23
Asia Petrochemicals Risk/Reward Index
23
Table: Asia Petrochemicals Risk/Reward Index Ranking
27
Taiwan Petrochemicals Risk/Reward Ratings
28
Market Overview
29
Table: Taiwan's Olefins Facilities
30
Table: Taiwan's Polyolefins Facilities
31
Table: Taiwan's Aromatics Facilities
32
Industry Trends And Developments
33
Company Profile
35
Formosa Plastics Group
35
Table: FPG financial results (TWDmn)
37
Chinese Petroleum Corporation
38
Regional Overview
41
Asia Overview
41
Feedstock shifts
41
The coming surge: 2015 and 2016
41
China and India will dominate Asia demand
42
Rapid Growth In South East Asia
46
Global Industry Overview
48
China versus the US: feedstock wars
49
Table: Top 10 Ethylene Producers, 2013
53
Demographic Forecast
56
Table: Population Headline Indicators (Taiwan 1990-2025)
57
Table: Key Population Ratios (Taiwan 1990-2025)
58
Table: Urban/Rural Population & Life Expectancy (Taiwan 1990-2025)
58
Table: Population By Age Group (Taiwan 1990-2025)
58
Table: Population By Age Group % (Taiwan 1990-2025)
59
Glossary
61
Table: Glossary Of Petrochemicals Terms
61
Methodology
62
Industry Forecast Methodology
62
Risk/Reward Index Methodology
64
Table: Petrochemicals Risk/Reward Index Indicators
65
Table: Weighting Of Indicators
66

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