New Energy market report from Business Monitor International: "Hungary Petrochemicals Report Q3 2013"

Boston, MA -- (SBWire) -- 07/22/2013 --Hungarian petrochemicals output will struggle with poor market conditions, but following a 23% drop in olefins and polyolefins in 2012, it should see a modest improvement, according to BMI forecasts. However, the industry is far from a recovery and it could be at least two years before it approaches pre-recession production levels. Diversification of production in isocyanates and butadiene should enable Hungarian petrochemicals producers to capitalise on the country's position as a production centre for the European automotives industry.

Hungarian petrochemicals producer MOL reported a sharp drop in petrochemicals output in 2012, indicating that it has been badly hit by the downturn in EU demand, particularly at its domestic operations. In the olefins segment, ethylene and propylene output slumped 20% year-on-year (y-o-y) to 628,000 tonnes and 321,000 tonnes respectively. The reductions were largely in response to a 20% fall in polymer sales - with low density polyethylene (LDPE) output down 33% y-o-y to 165,000 tonnes, high density polyethylene (HDPE) output down 17% to 447,000 tonnes and polypropylene (PP) also down 17% to 447,000 tonnes. The broad-based decline followed the trend reported in H211. The situation in H212 picked up slightly following a dismal Q212, but was still poor by historical standards.

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BMI has revised the following forecasts/views:

- A better than expected performance in Q412 ensured that the decline in petrochemicals output was slightly below BMI's forecast of 25%, at 23%.
- 2013 is likely to remain challenging and output will continue to remain below par due to poor market performances, although due to base effects the industry is not expected to contract further.
- TVK's 65,000 tonnes per annum (tpa) LDPE No.2 installation in Tiszaujvaros remained out of action in Q113 following a fire that broke out at the plant in October 2012. The company stated that the plant was continuing with reconstruction, but the start-up schedule had yet to be decided. This will weigh on petrochemicals output in 2013.
- In BMI's Central and Eastern Europe Petrochemicals Risk/Reward Ratings, Hungary scores 58.0 points out of 100, down 0.4 points since the previous quarter due to deterioration in market risk. However, it remains in fourth place in the regional ratings table, 0.8 points behind the Czech Republic and 7.5 points ahead of Slovakia.

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