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Just Released: "Indonesia Petrochemicals Report Q2 2013"

Recently published research from Business Monitor International, "Indonesia Petrochemicals Report Q2 2013", is now available at Fast Market Research


Boston, MA -- (SBWIRE) -- 05/24/2013 -- Indonesia is set to see a surge in petrochemicals volumes in the short-to-medium term amid growing investor interest in this fast-growing market. However, we warn that declining oil production and a restricted refining base could undermine naphtha feedstock supplies. Furthermore, imports will continue to take up an increasing share of the market as supply struggles to keep up with demand.

A significant increase in petrochemicals capacities is expected in 2013. Pertamina is planning to open a new 178,000 tonnes per annum (tpa) propylene facility at Balongan in West Java in 2013. Having carried out acquisitions in the PTA/PET segment, Indorama Ventures is investing in a new 300,000tpa plant to make polyester chips, due on-stream in 2013, in its bid to become a leading vertically integrated polyester value chain producer. Meanwhile, in the chlor-alkili segment, PVC producer Asahimas Chemical is raising capacity at its Cilegon caustic soda plant by 30% to 500,000tpa. Completion was scheduled for Q113. Asahimas is raising capacity in response to rapid demand growth in Indonesia and other Asian countries.

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In the fertiliser segment, PT Pupuk Kalimantan Timur (Kaltim) is building a large-scale nitrogen fertiliser complex at Bontang, East Kalimantan. The Kaltim-5 complex will be designed to produce 2,700 tonnes per day (tpd) ammonia and 3,500tpd urea, with completion scheduled for the end of 2013, making it the country's largest fertiliser complex. Meanwhile, PT Pupuk Sriwidjaja is planning to build two urea production facilities in East Java with combined capacity of 2mn tpa. This would fulfil the 1.8mn tonnes urea demand in East Java and Central Java that is being supplied by plants based in East Kalimantan and Palembang. Construction of the plants is expected to start in 2013, although this is dependent on securing adequate gas supplies.

Over the last quarter BMI has revised the following forecasts/views:

- The Indonesian petrochemicals market is proving to be stable and growing, going against the overall trend in the world market. While we have upgraded our 2012 GDP growth estimate for Indonesia to 6.2% from 6.0%, we continue to see signs that the economy is in the midst of a moderate slowdown. Owing to a challenging outlook for investment as well as continued external weaknesses, we expect GDP growth to slow marginally to 6.1% in 2013. Nevertheless, demand growth in the polymers market is estimated at 7.5%. Around 50% of the market is covered by imports, particularly in feedstock, despite the country's 620,000tpa cracker operating at 90-100% capacity throughout 2012, as it sought to fulfil growing demand for PP.

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