New Energy market report from Business Monitor International: "Australia Petrochemicals Report 2014"
Boston, MA -- (SBWIRE) -- 12/11/2013 -- If Australia is to expand petrochemicals production and compete on the global market, it will need to leverage its gas supplies and, to a lesser extent, secure naphtha supply. Cracker capacity is likely to depend on the country's abundance in ethane, since declining oil output growth will limit the scope for expansion of naphtha streams and raise feedstock costs. However, BMI's Australia Petrochemicals Report anticipates no further increase in petrochemicals capacity over the medium term due to the small size of the domestic market and the strength of competition in the increasingly over-supplied Asian market.
In 2013, the Australian petrochemicals industry witnessed some modest growth in capacity as Qenos' Altona complex raised national polyethylene (PE) capacity by 35,000tpa to 455,000tpa and cracker capacity by 20,000tpa to 550,000tpa. The move has helped reduce Australia's dependence on HDPE imports, although in global terms the expansion was very modest.
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Stagnation in retail spending is likely to undermine domestic consumption growth in the PE and polypropylene (PP) segments, although evidence of growth in the housing market could stimulate polyvinyl chloride (PVC) demand. Our core scenario does not envisage any slump in demand, although slower economic growth in 2014 will result in lower petrochemicals growth. In the long-term, the automotive industry is set to shrink due to planned plant closures, which could have a significant impact on PP used in automotive parts. Overall, with industrial growth lagging behind economic growth, the Australian petrochemicals market will remain lacklustre over the medium-term, although it is not forecast to shrink.
Over the past year, BMI has made the following revisions and updates:
- The main downstream growth area is fertilisers. India's Deepak Fertilisers and Petrochemicals says it is working towards setting up a 300,000tpa technical ammonium nitrate (TAN) plant in the state of South Australia, with completion possible in mid-2014 at the earliest. Yara International is planning a 330,000tpa TAN plant to be operated by Burrup Holdings under a 50:50 JV between the two partners; Yara has a minority shareholding in Burrup Holdings.
- Based on the nameplate capacity of existing refineries in Australia, the country had a total refining capacity of 658,740 barrels per day (b/d) in 2013. Capacity is spread across six mid-sized refineries run by integrated oil majors BP, Caltex (which Chevron has a 50% stake in) and Shell. With capacity standing at around 360,000b/d less than consumption, Australia is a net importer of oil products. The age, small size and relatively low complexity of the country's refineries has meant that they have been unable to effectively compete with overseas plants, increasing the country's dependence on imported fuels.
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