Fast Market Research recommends "Thailand Petrochemicals Report Q3 2013" from Business Monitor International, now available

Boston, MA -- (SBWire) -- 07/23/2013 --The Thai petrochemicals industry is now looking to add value to basic chemicals production following a surge in olefins and polymers capacities over recent years. We examine ongoing projects and assess the short-term and long-term risks as Asia struggles with over-supply and a volatile market scenario. Thailand's petrochemicals industry has made rapid progress. The policy of free competition in the industry has led to an increase in investment, as well as production capacity. Established manufacturing groups have focused on building a completely integrated industry and expanding investment opportunities to a global scale.

In terms of the local market, demand will be strong in the construction sector, although growth will decline to 4.5% in 2013, from an estimated 5.0% in 2012. The combined domestic consumption of the five polymers is forecast to rise substantially over our forecast period; however, for the Thai industry, 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.

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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.

The over-supply situation in the Chinese market, coupled with growing Indian self-sufficiency and the ongoing eurozone crisis, will narrow the range of markets that are capable of absorbing Thai exports. As such, prices are likely to soften and margins will come under pressure. However, Thailand's major polymer exports are likely to account for up to a third of capacity by 2017.

Over the last quarter BMI has revised the following forecasts/views:

- Recent announcements promise a moderate medium-term increase in petrochemicals capacities. PTTGC is planning to expand PX capacity at Map Ta Phut by 100,000tpa by Q315. The company's current PX capacity is 1.18m tonnes/year. Also due for completion in 2015 is a 90,000tpa increase in the company's ethylene oxide (EO) capacity. Meanwhile, studies are being carried out on a possible expansion of PTTGC's polymer capacity by 15-20%, which could be completed in 2016 if it gets the go-ahead in 2013. SCG is planning to boost its overall LDPE production capacity by 60,000tpa by 2016, according to reports in April 2013.
- PTTGC is planning to reduce its exposure to crude oil prices by bringing down the proportion of naphtha in the total feed at its 515,000tpa No. 1 cracker in Map Ta Phut from 95% to 50% by end-2014. Natural gas will be used as an alternative, making the cost of production more competitive. PTTGC's other crackers are running on natural gas, its main advantage over the other producers in Asia. The move will reduce the proportion of naphtha in PTTGC's total feed from 15% to 6-7%.

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