Boston, MA -- (SBWIRE) -- 03/17/2014 -- Poland's polymers market is set to begin its recovery in 2014, but there are concerns that local producers will not ultimately benefit unless they scale up capacities and reduce costs. BMI's latest Poland Petrochemicals Report argues that plans for naphtha-based capacity expansion will be hard to realise in a market witnessing high levels of growth from ethane-based derivatives producers in the US and Middle East.
In 2013, total plastic output grew 16.7% y-o-y to 2.71mn tonnes with polyethylene (PE) up 3.8% to 341,000 tonnes, polyvinyl chloride (PVC) up 17.1% to 306,000 tonnes and polypropylene (PP) up 3.9% to 254,000 tonnes. Meanwhile, synthetic rubber output was up 0.9% to 193,000 tonnes. Although PE growth ended the year with muted growth, ethylene output grew 7.6% y-o-y to 487,000 tonnes. Propylene also managed to perform better than its main derivative, growing 8.0% to 352,000 tonnes. Local manufacturers attempted to compensate for weaker domestic demand with increased exports.
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Grupa Lotos and Grupa Azoty have decided to progress with a EUR3bn (US$4.1bn) petrochemical complex. In December, the two companies entered into an agreement to conduct a feasibility study for a petrochemicals plant to be located near the Lotos refinery, with Azoty as the primary customer. Analysts have questioned the viability of the scheme given the competition from petrochemical plants being set up in the US over the next five years on the back of cheap shale gas-derived feedstock.
Meanwhile, Grupa Azoty plans to launch production of nylon 6 at its facility in Tarnow, Poland. The factory, operated by Azoty's subsidiary Zaklady Azotowe Tarnow (ZAT), will produce nylon 6 with the use of the caprolactam (CPL) supplied by the group's Zaklady Azotowe Pulawy (ZAP) plant. This will add value to CPL output and improve sales performance in the segment. Further details on the planned project are expected later in 2014.
Over the last quarter, BMI has revised the following forecasts/views:
- BMI's automotive team has revised up its automotive output growth forecast from -2.4% to 6.5% in 2014 with a brisk and sustained recovery helping to lift the plastics market. - BMI believes the current weakness in Poland's construction sector will persist over 2014, thereby limiting growth in construction-related polymers such as PVC. However, we are anticipating a recovery from 2015 and we anticipate annual average growth of 5% between 2015 and 2018. -
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