New Energy research report from Business Monitor International is now available from Fast Market Research
Boston, MA -- (SBWIRE) -- 02/25/2014 -- The South African petrochemicals industry is struggling with poor domestic demand conditions, deteriorating risk and a volatile exchange rate. Margins are coming under pressure with the depreciation of the rand doing nothing to boost the industry's fortunes on external markets. Instead, local producer Sasol is ramping up investment in North America to take advantage of shale gas growth with only incremental increases in domestic capacities.
Sasol's 48,000tpa ethylene purification project - inaugurated in January 2014 and raises ethylene production for downstream PE plants from the firm's coal-to synthetic fuels production facilities - hopes to reach 50% capacity utilisation by mid-2014 and 100% by 2017. This will cut import dependency for South African plastics converters. Sasol's C3 stabilisation project at the Secunda coal processing complex is expected to go into full commercial production in mid-2014, which should raise propylene processing capacity by 10,000tpa.
View Full Report Details and Table of Contents
South Africa's petrochemicals industry production indices showed a declining trend in plastic output throughout 2013, suggesting the weaker domestic market was having a deleterious effect on the sector. On the upside, synthetic rubber production showed a broadly favourable trend. BMI estimates that, based on rebased index data, in 2013, plastic output fell 15% y-o-y, but basic chemicals grew by a modest 2.5% and rubber grew 6.4%. However in Q413, indices for plastics, chemicals and rubber appeared to strengthen, indicating improved market conditions as well as reflecting re-stocking. BMI projects local polymer demand will grow at a rate of 4-5% annually over the medium term.
- The prospects for South Africa's economy are deteriorating and we have revised down our forecasts since our last quarterly update. We expect relatively weak real GDP growth in South Africa over the medium term, forecasting economic expansion of 2.5% in 2014 and 3.1% in 2015. Our view is predicated on a slowdown in consumer spending, troubles in the gold mining sector and tepid investor sentiment. While this may depress growth in petrochemicals products used in the retail sector, in particular packaging, it will be outweighed by stronger growth in some industrial segments.
- BMI forecasts overall 12% growth in vehicle production between 2013 and 2017, to 614,000 units, which should boost consumption of engineering plastics and rubbers used in the automotive industry. At the same time, the automotive parts industry is growing in importance with increased use of local content in cars, thereby helping to boost domestic consumption of polymers.
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:
- Israel Petrochemicals Report Q2 2014
- Algeria Petrochemicals Report Q2 2014
- Egypt Petrochemicals Report Q2 2014
- Saudi Arabia Petrochemicals Report Q2 2014
- South Africa Oil & Gas Report Q1 2014
- Iran Petrochemicals Report Q2 2014
- Kuwait Petrochemicals Report Q2 2014
- South Africa Telecommunications Report Q2 2014
- South Africa Business Forecast Report Q2 2014
- South Africa Insurance Report Q2 2014
Copyright © 2005-2014 - SBWire, The Small Business Newswire - All Rights Reserved - Important Disclaimer
Contact Us: 888-4-SBWIRE (US) - 920-593-5640 (International)