BMI View: Thailand's petrochemicals industry is expanding downstream capacities, while diversifying feedstocks, in order to shore up margins and add value to output. It will need to maintain competitiveness through feedstock flexibility and product diversification in order to reverse the emergence of a trade deficit in chemicals.
Export performance will be an overwhelming concern for Thai petrochemicals. In 2015, Thailand reported a chemicals trade deficit of THB39.6bn, compared to a surplus of THB30.7bn in 2014, as the price of chemical exports fell amid softening demand and lower feedstock costs. The value of exports declined 12% to THB700.4bn, which was a higher rate of decline than the 3.3% fall in imports to THB739.9bn.
Regional demand growth will remain subdued due to a broad economic slowdown. This in turn will have a negative impact on Thai petrochemicals prices and margins at a time when the country is facing increasing competition from the Middle East and North America for Asian markets.
Responding to the shift in feedstock prices, which have favoured oil derivative naphtha, and the decline in the domestic production of gas, from which ethane is extracted, Thailand is looking to utilise more domestically produced naphtha. This flexibility should assist the sector to remain externally competitive, while making the best of local resources. PTTGC is conducting a retrofit project that will use 1.5mn tonnes per annum (tpa) of naphtha annually to produce 500,000tpa of ethylene, 261,000tpa of propylene and 100,000tpa of C4, including butadiene. This has the potential for downstream diversification and improved feedstock flexibility.
Thailand will see growth in output in 2016 due to the ramping up of petrochemicals capacities in 2015, including 250,000tpa of phenol, 15,000tpa of acetone, 90,000tpa of TOC Glycol, 115,000tpa paraxylene, 115,000tpa benzene and 20,000tpa orthoxylene. Meanwhile, Thai crackers will raise naphtha as a proportion of their feed in order to capitalise on lower naphtha costs as well as hedging against the impact of depleting gas resources.
Further expansions are expected in coming years. In the polymer segment, a 400,000tpa linear low density polyethylene (LLDPE) expansion is due to come onstream in 2018. Plans for a USD1bn polyurethane complex in Rayong include capacities of 200,000tpa propylene oxide and 130,000tpa polyether polyols. A USD200mn metallocene linear low density polyethylene (MLLDPE) plant is also planned at Map Ta Phut with 300,000-400,000tpa of capacity, coming onstream in Q118.
In BMI's Asia Pacific Petrochemicals Risk/Reward Index, Thailand scores 68.8 out of 100, up 0.8 points on the previous quarter due to a revision in its market risk score. This was brought about by an improvement in long-term risk factors. Beyond 2016, economic reforms are heating up, from energy price liberalisation to cleaning up public procurement to the long-overdue reforming of the country's state-owned enterprises. Such reforms have the potential to raise Thailand's economic growth rates in the face of slowing global growth and political uncertainty. However, the country retains its sixth place, 1.0 points behind Taiwan and 2.8 points ahead of India.
The Thailand 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 Thailand Petrochemicals Report provides industry professionals and strategists, sector analysts, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Thai petrochemicals industry.
- Benchmark BMI's independent petrochemicals industry forecasts to test other views - a key input for successful budgetary and planning in the Thai petrochemicals market.
- Target business opportunities and risks in the Thai petrochemicals sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Thailand.
- 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.