Fast Market Research recommends "Malaysia Petrochemicals Report 2013" from Business Monitor International, now available
Boston, MA -- (SBWIRE) -- 01/09/2013 -- Ongoing investment in Malaysia's petrochemical industry is focused on vertically integrated complexes with a high degree of diversification, which should add value to basic chemicals production. This report analyses the threat of potential market saturation on industry growth over the medium-term, as well as a short-term domestic economic downturn.
Going into 2013, weakness in the regional market due to oversupply and overall weaker economic growth will put pressure on petrochemicals market growth. A hard landing in the Chinese economy compels us to maintain a bearish outlook on Malaysian petrochemicals exports. In terms of the domestic market, households are expected to cut back aggressively on spending over 2013 due to tighter lending conditions and cooling property prices.
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The Malaysian petrochemicals industry is set to see an expansion of chemicals production throughout the petrochemicals chain, including further diversification into speciality products. By 2017, based on announced projects, Malaysia's ethylene capacity will rise by 86% to 3.24mn tonnes per annum (tpa) and propylene capacity will increase by 27% to 1.43mn tpa. In the polymers sector, polyethylene (PE) capacities will more than double to 1.98mntpa and polypropylene (PP) will grow 125% to 1.26mntpa.
The fertiliser sector will also see 57% growth in ammonia to 2.07mntpa and 97% growth in urea to 2.64mntpa. Key risks include regional over-capacity and a change of government following the 2013 general election.
BMI has made the following revisions to its forecast:
- There will be some stimulus from government-led investment projects under the Economic Transformation Plan (ETP), although it will have limited impact on domestic petrochemicals consumption.
- Regional market saturation has cast doubts over planned projects, in particular Petronas' refinery and petrochemical integrated development (RAPID) project in Pengerang, Johor, due to be commissioned by end-2016 with a 300,000b/d refinery and a downstream 3mntpa petrochemicals complex.
- Malaysia ranks seventh place in BMI's Petrochemicals Risk/Reward Ratings (RRRs) for Asia with 66.8 points, up 1.4 points since 2012 due to improved country risk. It lies 2.7 points behind Taiwan and 2.8 points ahead of Australia. Oil and gas reserves should sustain some expansion of the country's petrochemicals sector over the next decade.
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