Boston, MA -- (SBWIRE) -- 06/05/2012 -- The German petrochemicals industry is set for a sharp slowdown in 2012, but is unlikely to contract unless the eurozone debt crisis goes out of control and impacts unfavourably on the European and global economy, according to BMI's latest Germany petrochemicals report.
Sales generated by Germany-based chemical operations reached a record level of EUR186.5bn in 2011, EUR110.2bn of which were overseas sales and EUR76.3bn of which were domestic sales. The German chemicals industry is likely to avoid recession in 2012, but output growth is set to decline to around 1% from an estimated 4% in 2011. Growth in sales is also forecast to decline from 9% to 1-2%, due to the impact of the eurozone debt crisis, as well as slowdown in export markets outside the EU, such as China and the US. Key growth drivers will be in high-end specification plastics and speciality chemicals, rather than the basic chemicals and polymers traded by producers in the Gulf region. This should, in due course, spur investment in expanding existing capacities and increasing research and development with a focus on German operations.
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The German chemicals market, which represents a quarter of EU sales, will be pivotal to growth in overall European chemicals production. Indeed, the slowdown in domestic demand will inevitably reduce imports. As a result, European producers cannot bank on German demand to compensate for weaknesses elsewhere in the EU market, and many will fail to match the competitiveness of the country's diverse and highly integrated petrochemicals industry.
Specialised petrochemicals units are being established in Germany, despite the more hostile market environment. Lanxess is in the process of expanding some specialised petrochemicals derivative plants in Germany, with a planned 40% rise in hydrogenated nitrile butadiene rubber capacity at Leverkusen by April 2012. Current capacity was not disclosed. Meanwhile, Evonik Industries is building a functionalized polybutadiene plant at Marl that will come onstream in Q312, which will allow the company to offer hydroxyl-functionalized polybutadiene to its customers in the adhesives and sealants market. BASF has recently expanded its production of extruded PS insulation material - Styrodur C - for rigid foam panels at Ludwigshafen by 17% amid 3-5% expected annual growth in the European extruded polystyrene foam market. BASF is also increasing the compounding capacity for its Ultramid nylon engineering plastics and Ultradur polybutylene terephthalate facilities at Schwarzheide. The project is due for completion in mid-2012, adding 10,000tpa of compounding capacity; the company is expecting average annual growth of over 5% in Europe following double-digit growth in 2010 and 2011.
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