Boston, MA -- (SBWIRE) -- 07/24/2012 -- The France Petrochemicals Report examines the immediate and long-term prospects facing the chemicals industry over what will be a tough year following two years of recovery.
The report looks at the competitiveness of the French petrochemicals industry, both at home and abroad, and the potential for increased competition between domestic production and foreign imports. The report also analyses the growth and risk management strategies employed by leading producers in France as they seek to reduce their costs and improve the integration of refining and downstream units.
In 2011, BMI estimates that France had olefins production capacities of 3.14mn tonnes per annum (tpa) ethylene, 2.13mn tpa propylene and 445,000 tpa butadiene. Polymer capacities included 1.44mn tpa polypropylene (PP), 1.22mn tpa low density polyethylene (LDPE), 705,000 tpa high density polyethylene (HDPE), 560,000 tpa linear low density polyethylene (LLDPE), 1.39mn tpa polyvinyl chloride (PVC), 330,000tpa polystyrene (PS) and 70,000tpa polyethylene terephthalate (PET). In the fertiliser segment, France has capacities of 1.58mn tpa ammonia and 785,000 tpa urea. France also had styrene butadiene rubber capacity of 160,000 tpa. In order to sustain production, French petrochemicals producers will have to ramp up research and development, improve their products' value-added aspects and exploit niche and speciality markets. At the same time, restructuring, streamlining and integrating operations will be crucial to boosting profitability. New efforts are expected to involve partnerships with clients, new innovation sources and higher integration with refining.
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In H112 the worsening economic climate continued to have a significant impact, with plastics and basic petrochemicals worst affected. BMI believes that the industry's lack of competitiveness both within the EU and beyond will lead to significant cutbacks in capacity. A downturn in 2012 will prevent a return to pre-recession operating rates and by the time the market recovers, old, inefficient and smaller capacities are likely to be taken offline.
Over the last quarter BMI have revised the following forecasts/views:
- In 2011, chemical industry output grew 5.9% y-o-y on the back of a 13% rise in turnover to EUR86.7bn. Output growth was better than the consensus estimate of 4.5%.
- Chemical output growth is unlikely to exceed 2% in 2012 and could potentially fall to zero.
- France scores 73.5 points in BMI's Q3 petrochemicals ratings, up 0.2 points on the previous quarter due to a slight improvement in its long-term external risk score, although this remains relatively low. France retains second place in BMI's Western European petrochemicals risk/reward ratings, lying 7.9 points behind Germany and 1.1 points ahead of the Netherlands.
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