New Energy market report from Business Monitor International: "Thailand Petrochemicals Report Q4 2013"
Boston, MA -- (SBWIRE) -- 11/14/2013 -- Having witnessed a surge in petrochemicals capacities over the past few years, BMI believes the Thai petrochemicals industry will make a transition towards adding value to basic chemicals production, as PTT moves forward with its US$4.5bn investment programme. We examine the local market's strengths and weaknesses, as well as the industry's exposure to external markets, as it seeks to maintain and improve competitiveness.
Feedstock shortages have been disrupting petrochemicals output in Thailand. PTTGC may reduce its petrochemical processing rate to 70-80% due to a shortage of feedstock, following a shutdown of its parent's gas separation plant unit 5 for three to five months. It had also instituted a 44-day turnaround at a 515,000tpa cracker in August and September. The cracker's scheduled turnaround will help ease the expected build-up of ethylene inventory, following the unexpected shutdown of the company's 300,000tpa LDPE plant in July. The LDPE plant was expected to be shut for three and a half months to carry out repairs, re-opening in October. Lower run rates have not been restricted to PTTGC's operations. HMC Polymers has been running its 300,000tpa PP plant at reduced rates since August 2013. SCG is also due to cut PE and PP output at Map Ta Phut, due to tight feedstock caused by its cracker turnaround programme. Our key views are:
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- It is BMI's long-held view that Thailand will remain a key auto hub in South East Asia, in part due to its excellent infrastructure and strategic port links with neighbouring countries in the region. This will support a range of petrochemicals products, particularly in the synthetic rubber and engineering plastics segments;capacities set to rise in 2013, with additional solution styrene butadiene rubber (SSBR) and acrylonitrile-butadiene-styrene (ABS) output planned.
- We believe that many of the factors supporting our bullish outlook for Thailand's construction sector, the principal market for PVC, in 2012 - namely robust building construction activity and conducive monetary conditions for construction - are playing out in 2013. The long-term outlook for PVC is positive, according to BMI's projected trends for construction. Increased construction activity will also benefit PE and PP piping. IRPC is responding by producing more pipe grade HDPE at Map Ta Phut in 2013.
- The combined domestic consumption of the five polymers is forecast to rise substantially over our fiveyear forecast period to 2017; however, the most crucial factor will be exports. In 2013, the outlook for petrochemicals exports is slightly negative, although Thai production will remain competitive on the regional market. Despite prevailing global economic headwinds and a strengthening Thai baht that is increasingly undermining the competitiveness of the export sector, the economy is proving to be much more resilient than we had initially expected.
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