Recently published research from Business Monitor International, "Spain Petrochemicals Report Q2 2013", is now available at Fast Market Research
Boston, MA -- (SBWIRE) -- 05/30/2013 -- A recovery in the Spanish petrochemicals market is highly unlikely in 2013 with the probability of another year of contraction. Combined with the effects of the eurozone slowdown and increased competition from integrated facilities in the Middle East and Asia, we believe the situation create the conditions that could precipitate further closures of ageing Spanish petrochemicals units which are functioning at a far lower capacity than producers in these regions.
In 2012, the industrial production index for chemicals declined 0.7% on average while for rubber and plastic products it plummeted an average of 9.1%, compared with growth of 0.2% and -1.5% respectively in 2011. The trend in both segments was downwards, although less strong in chemicals. Nevertheless, the downturn was not as bad as BMI had anticipated in the previous quarter when we forecast a contraction of 3% in chemicals output and 10.5% in plastics and rubber.
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Over the last quarter BMI has revised the following forecasts and views:
- The pace of economic recovery and renewed growth is critical to Spain's chemicals and petrochemicals market, a significant portion of which is served by local production. With the rest of the eurozone caught up in a pronounced slowdown, Spain's capacity to export its way out of recession has disappeared entirely. We estimated GDP contracted 1.4% in 2012 and the recession should deepen in 2013 when growth should fall to -1.7%, which is far worse than the -0.2% previous forecast. Overall, 2013 could be a worse year for chemicals production while plastics are set to remain in a slump.
- The housing market continues its slump, leading to further contraction of the PVC used in construction applications. Additionally, packaging and consumer durables will be hit by high unemployment, thereby depressing demand for all grades of PE and PP. The automotive sector is also in a poor state with output having fallen by an estimated 19.6% in 2012 and set for a further five years of contraction as producers seek to relocate production activities in cheaper and high-growth regions. These conditions work against a recovery in the Spanish polymers markets.
- Spain scores 66.7 points, leaving it in sixth and last place in our Western Europe petrochemicals business environment ratings. It lies 4.9 points behind the United Kingdom.
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