New Energy market report from Business Monitor International: "France Petrochemicals Report Q1 2014"

Boston, MA -- (SBWire) -- 01/08/2014 --The French petrochemicals industry suffered a decline in output in 2013 as a result of domestic and external economic woes, but while recovery is expected to begin in 2014, it will be some years before output returns to pre-2008 levels; and with plant closures some segments, such as olefins, will never fully recover, according to BMI's latest France Petrochemicals Report.

For 2013, BMI estimates that France had olefins production capacities of 3.14mn tonnes per annum (tpa) ethylene, 2.13mn tpa propylene (PP) and 445,000tpa butadiene. Polymer capacities included 1.44mn tpa PP, 1.22mn tpa low density polyethylene (LDPE), 705,000tpa high density polyethylene (HDPE), 560,000tpa linear low density polyethylene (LLDPE), 1.39mn tpa PVC, 330,000tpa polystyrene (PS) and 70,000tpa polyethylene terephthalate (PET). In the fertiliser segment, France has capacities of 1.58mn tpa ammonia and 785,000tpa urea. France also had styrene butadiene rubber capacity of 160,000tpa.

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Recent announcement indicate that Total is set to close ethylene and propylene operations at its petrochemicals plant in Carling, which faces surplus supply in eastern France and competition from cheap US ethylene. However, Total has announced plans to spend EUR160mn before 2016 on upgrades at the site. It plans to construct a new production unit for C4 resins, while the existing C9 resins unit for adhesives will be transformed to produce transparent resins. The site will also be the centre of the company's European research and development activities for the sector. Total is also planning to renovate polymer production at the site, with the creation of a new thermoplastics unit to produce automotive plastics, a capacity expansion for PS production, and upgrades to the PE production unit to increase yields of advanced plastics.

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

- In the first nine months of 2013, French chemicals, plastic and rubber output declined by an average of 2.6% year on year (y-o-y) as producers struggled with declining orders amid a slump in demand both at home and in key export markets. This reversed gains seen in 2012, when the chemicals industry saw turnover rise by 2.5%.
- The contraction in petrochemicals in 2013 comes in the context of France's poor economic activity. We estimate zero real GDP growth in 2013 (an upward revision from the -0.5% forecast in the previous quarter) and just 0.5% in 2014 and any growth in the petrochemicals industry will be export-led.

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