The UAE's diversification of feedstock with mixed-feed cracker capacity should support competitiveness at a time when external markets are affected by a surge in exports from Saudi Arabia and Iran and diminished import growth in China. Polymer margins have held up in spite of the pressures, but in H116 the UAE faced lower petrochemical product prices, while at the same time its chief rivals are in a better cost position with more competitively priced feedstock.
A higher level of naphtha use in the UAE's petrochemicals industry should enable it to benefit from low crude oil prices, polymer product prices have been falling faster than feedstock costs. The situation is a result of unfavourable trends in export markets, notably in Asia. The expansion of the Borouge facility in Abu Dhabi has merely exacerbated the oversupply situation.
However, on the upside, the Borouge plant overcame technical problems and feedstock disruption that plagued the complex in H116 and by mid-2016 was operating at full capacity. In addition, a 70,000tpa XLPE plant, the final part of the Borouge 3 complex, was set to start up in mid-2016. XLPE has high temperature resistance and is used in plumbing and heating pipes and systems.
Concerns are rising over the future of the Chemaweyaat development with the timing of the first stage - the Tacamool Aromatics Project - slipping from 2016 to 2018, the withdrawal of Thai joint venture partner Indorama Ventures from the project and lingering uncertainty over the future of the world-scale olefins and derivatives section of the complex.
The merger of the of the IPIC and Mubadala sovereign wealth funds could lead to a rationalisation of petrochemicals projects with the potential for the downscaling or cancellation of the Chemaweyaat project; there are already doubts about the world-scale olefins and polymers element of the project, the timeline of which has been dropped in recent announcements by the company.
In BMI's Petrochemicals Risk/Reward Index (RRI), the UAE has a score of 66.0 points, down 1.3 points since the previous quarter following a reduction in its country risk score amid an economic slowdown, a downturn in external markets - particularly China which is the key export market for Emirati petrochemicals products - and the rising threat of competition from Iran. The country retains its second place in the Middle East and Africa RRI table, 10.0 points behind Saudi Arabia and 1.7 points ahead of Iran. A resurgent Iran, with its huge amount of capacity coming onto the market with more competitive prices, threatens to leapfrog the UAE in the rankings.
The United Arab Emirates 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 United Arab Emirates Petrochemicals Report provides industry professionals and strategists, sector analysts, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Emirati petrochemicals industry.
- Benchmark BMI's independent petrochemicals industry forecasts to test other views - a key input for successful budgetary and planning in the Emirati petrochemicals market.
- Target business opportunities and risks in the Emirati petrochemicals sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in United Arab Emirates.
- 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.