Business Monitor International


Argentina Petrochemicals Report

Published 06 November 2013

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Argentina Petrochemicals Report

The Argentine petrochemicals industry will struggle to compete against imports from Brazil and the US as competitiveness declines amid feedstock shortages. While the situation could turn around if domestic gas resources are tapped, this scenario is not expected over the next five years, according to BMI's Argentina Petrochemicals Report.

Renationalisation of YPF has failed to stop the annual winter crisis of gas supply, which has caused feedstock shortages for the petrochemicals industry. Argentina has been a net gas importer since 2008 and has prioritised supplies to the residential power sector over the needs of the petrochemicals industry. Cutbacks in gas supplies have undermined performance and deterred investment and renationalisation has provided no new feedstock. Moreover, the fall in the value of the peso, which has raised the cost of imports, coupled with a price cap on consumer prices for electricity and natural gas has made natural gas unprofitable. There is the possibility of policy reversal if shale proves to be commercially viable for extraction, as in the US. If so, the Argentine petrochemicals industry could undergo the transformation seen in North America. Nevertheless, it is unlikely to make any impact on capacity over the medium-term with BMI anticipating 2020 as the earliest date for any new cracker construction in Argentina.

Throughout 2013, Argentine chemical output stabilised while rubber and plastic production showed a clear down trend having made something of a recovery in 2012. The trends were indicative of the difficulties faced by producers. Plastics and rubber production showed a notable seasonal downturn in the winter, showing that feedstock shortages were exacerbating the situation. Nevertheless, in spite of a decline in supply and high inflation, prices were on the downside due to the effect of imports, particularly from Brazil.

BMI has revised the following forecasts/views:

  • PVC has fared well in recent years, retaining stable...

Table of Contents

Executive Summary
5
SWOT Analysis
6
Argentina Petrochemical Industry SWOT
6
Argentina Political SWOT
7
Argentina Economic SWOT
8
Argentina Business Environment SWOT
9
Global Petrochemicals Overview
10
Global Oil Products Price Outlook
14
Table: BMI's Refined Products Forecasts , 2010-2016
15
Table: Middle East Outperforms In Terms of Passenger Growth
19
Latin America Overview
24
Argentina Market Overview
29
Table: Argentina-s Olefins Facilities
30
Table: Argentina-s Polyolefins Facilities
30
Table: Argentina-s Aromatics Facilities
31
Table: Argentina-s Fertiliser Facilities
31
Regulatory Structure
32
Industry Trends And Developments
33
Upstream Investment
33
YPF nationalisation
34
Downstream Developments
35
Industry Forecast Scenario
36
Table: Argentina's Petrochemicals Sector, 2010-2017, ('000 tpa, unless otherwise stated)
37
Petrochemicals Risk/Reward Ratings
39
Table: Americas Petrochemicals Risk/Reward Ratings (Scores Out Of 100)
41
Macroeconomic Outlook
42
Company Monitor
45
The Dow Chemical Company
45
Petrobras
46
YPF
49
Country Snapshot
51
Table: Argentina's Population By Age Group, 1990-2020 ('000)
52
Table: Argentina's Population By Age Group, 1990-2020 (% of total)
53
Table: Argentina's Key Population Ratios, 1990-2020
54
Table: Argentina's Rural And Urban Population, 1990-2020
54
BMI Methodology
55
How We Generate Our Industry Forecasts
55
Chemicals And Petrochemicals Industry
55
Cross Checks
56
Business Environment Ratings
57
Table: Petrochemicals Business Environment Indicators And Rationale
57
Weighting
58

The Argentina Petrochemicals Report has been researched at source, and features Business Monitor International (BMI)'s market assessment and independent forecasts for key petrochemicals sub-sectors. The report also analyses the impact of regulatory changes, recent developments and the background macroeconomic outlook and features competitive landscapes comparing companies by products and services, sales, market share, investments, projects, partners and expansion strategies.

BMI's Argentina Petrochemicals Report provides industry professionals and strategists, sector analysts, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Argentinian petrochemicals industry.

Key Benefits

  • Benchmark BMI's independent petrochemicals industry forecasts to test other views - a key input for successful budgetary and planning in the Argentinian petrochemicals market.
  • Target business opportunities and risks in the Argentinian petrochemicals sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Argentina.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. KPIs and latest activity).

Coverage

BMI Industry View

Summary of BMI's key industry forecasts, views and trend analysis, covering petrochemicals markets, regulatory changes, major investments, projects and company developments.

Market Overview

Structure, size and value of the industry sector; overview of the industry landscape and key players; assessment of the business operating environment and the latest regulatory developments.

Business Environment Rankings

BMI's Petrochemicals Business Environment Rankings provide a country-comparative Risk-Reward Rankings index aimed at investors (both corporate and financial) in the regional petrochemicals market.

The rankings methodology makes sophisticated use of over 40 industry, economic and demographic data points and is part of BMI's integrated Country Risk-Industry Rankings products.

Industry Trends & Developments

Evaluation of company and sector-wide developments, including key projects (as well as expansion plans), latest company financial details and proposed international ventures.

BMI Industry Forecasts

Historic data series (2009-2012) and forecasts to end-2018 for all key industry and economic indicators supported by explicit assumptions, plus analysis of key risks to the main forecasts. Indicators include:

Energy: Oil production (`000 b/d), oil consumption (`000 b/d), net oil exports (`000 b/d), gas production (bcm), gas consumption (bcm), net gas exports (bcm), oil refinery capacity (`000 b/d).

Petrochemicals: Ethylene capacity (`000 tpa), ethylene production (`000 tpa), ethylene consumption (`000 tpa), polyethylene capacity (`000 tpa), polypropylene capacity (`000 tpa), polyvinyl chloride capacity (`000 tpa), polyolefins consumption (`000 tpa).

Oil Products Prices: Price forecasts for all major oil-based products (US$/bbl) at major global energy trading hubs.

Economic: Nominal GDP (US$bn), real GDP growth (%), GDP per capita (US$), population (mn), unemployment (%), exchange rate (against US$).

Company Profiles

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI's industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc