Boston, MA -- (SBWIRE) -- 05/02/2014 -- The Indonesian petrochemicals market in 2013 was a little less bullish than BMI had expected in the previous quarter with our real GDP growth forecast for the year revised down from 5.8% to 5.7%. BMI's latest Indonesia Petrochemicals Report maintains our expectations for the rate of economic expansion to ease further to 5.4% in 2014. The trends suggest slightly less dynamism over the short-term, but the market remains robust and the long-term scenario is strongly to the upside. The local industry's inability to meet domestic requirements means that the country will remain a significant net importer of petrochemicals products in Asia.
A joint venture between PTT Global Chemical (PTTGC) and Pertamina to set up a fully integrated petrochemical complex should commence commercial operations in 2018. The project could include a 1mntpa naphtha cracker with downstream capacities of 400,000 tonnes per annum (tpa) of polyethylene, 350,000tpa of polypropylene and 200,000tpa of PVC, which means margins will be closely related to crude prices. The impact of ethane-based US petrochemicals on the Asian market may make the project uneconomic. Bearing in mind the risks, BMI has not included the project's capacities in the medium-term forecast. Finalisation was expected in Q114, which was to be followed by a feasibility study and Front End Engineering Design (FEED).
View Full Report Details and Table of Contents
Key views for the sector:
- No cracker turnarounds at Chandra Asri are scheduled in 2014 with the last performed in 2011. With the plant operating at 95-100% capacity in Q1, the producer is likely to maintain a steady supply of feedstock to downstream industries. However, the country will continue to see its petrochemicals deficit rise.
- In the construction sector, which is a major market for polymers, particularly PVC, there is limited scope for growth in 2014 to outperform its 2012 level. Furthermore, the downside risks we had previously highlighted - namely a deepening deficit (brought on by ballooning subsidies), higher borrowing costs, declining purchasing power for companies, the 2014 elections and bottlenecks in project execution - are manifesting and are set to adversely affect near-term construction activity. As such, we maintain our construction growth forecast in 2014 at 6.3%.
- One of the main drivers of petrochemicals market growth will be the country's automotive industry, which is spurring investment in rubber, polyurethanes and engineering plastics. BMI forecasts auto production to grow at an average of 8.5% per annum over the 2014-2018 period, accelerating after 2015 once the ASEAN Economic Community (AEC) moves towards implementation as more carmakers will then use Indonesia as a production base to export to other parts of Asia. The consequent growth in the automotive supply sector should bolster a full range of plastic and rubber products and providing considerable upside to adding value to local petrochemicals.
About Fast Market Research
Fast Market Research is a leading distributor of market research and business information. Representing the world's top research publishers and analysts, we provide quick and easy access to the best competitive intelligence available. Our unbiased, expert staff is always available to help you find the right research to fit your requirements and your budget. For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156.
Browse all Energy research reports at Fast Market Research
You may also be interested in these related reports:
- Algeria Petrochemicals Report Q2 2014
- Saudi Arabia Petrochemicals Report Q2 2014
- United Arab Emirates Petrochemicals Report Q2 2014
- Spain Petrochemicals Report Q2 2014
- Russia Petrochemicals Report Q2 2014
- China Petrochemicals Report Q2 2014
- Germany Petrochemicals Report Q2 2014
- Iran Petrochemicals Report Q2 2014
- Czech Republic Petrochemicals Report Q2 2014
- Poland Petrochemicals Report Q2 2014