Business Monitor International


Taiwan Petrochemicals Report

Published 17 January 2014

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Taiwan Petrochemicals Report

BMI's latest Taiwan Petrochemicals Report foresees a worrying trend for Taiwanese petrochemicals producers to move investment in basic chemicals to mainland China and South East Asia. Unless Taiwan can diversify and specialise to add value to the olefins production it currently possesses, the industry is likely to fall behind and lose its competitive edge.

The domestic petrochemicals market was depressed in 2013 and was set for another year of poor market dynamics, with broader economic trends remaining unsupportive. In the first 11 months of 2013, the chemicals products index grew 2.4% y-o-y, but rubber declined 2.5% and plastic fell 1.1%. The trend reflected the poor state of manufacturing, particularly in motor vehicles and parts (down 3.6%), which represent a significant part of the petrochemicals market.

There was nevertheless some expansion in 2013, with CPC bringing its new 700,000tpa cracker at Linyuan into commercial operation in Q313. The facility replaced the 230,000tpa No.3 cracker and also includes capacities of 430,000tpa propylene, 90,000tpa benzene and 130,000tpa butadiene. However, the closure of 500,000tpa capacity in 2015 will ensure that Taiwan ends the forecast period with just under 4mn tpa of ethylene capacity. This may well lead to Taiwan becoming a net importer of ethylene over the medium term, possibly from mainland-based complexes that Taiwanese petrochemicals producers intend to develop following a relaxation of the rules on investment in the PRC.

BMI notes the following trends going forward:

  • The recovery in Taiwan's construction activity is proceeding more slowly than previously expected, putting downward pressure on construction-related plastics, particularly PVC. We have revised down Taiwan's construction growth forecasts for 2014, with real growth for the sector expected to reach 1.9% (previously 2.9%).

  • The automotive industry - a barometer of engineering polymers and rubber consumption - is experiencing a downturn. Due to our...

Table of Contents

Executive Summary
5
SWOT Analysis
6
Taiwan Petrochemicals Industry SWOT
6
Taiwan Political SWOT
6
Taiwan Economic SWOT
7
Taiwan Business Environment SWOT
8
Global Petrochemicals Overview
9
Global Oil Products Price Outlook
13
Table: BMI's Refined Products Forecasts, 2010-2016
14
Table: Middle East Outperforms In Terms of Passenger Growth
18
Emerging Asia Petrochemicals Overview
23
Taiwan Market Overview
27
Table: Taiwan-s Olefins Facilities
28
Table: Taiwan-s Polyolefins Facilities
29
Table: Taiwan-s Aromatics Facilities
30
Industry Trends And Developments
31
Asia Petrochemicals Risk/Reward Ratings
33
Table: Asia Petrochemicals Business Environment Ratings
35
Taiwan
35
Industry Forecast Scenario
36
Table: Taiwan-s Petrochemicals Sector, 2010-2017, (-000 tpa, unless otherwise stated)
38
Macroeconomic Outlook
40
Table: Taiwan - Economic Activity, 2011-2016
42
Company Profile
43
Formosa Plastics Group
43
Table: 2011 Financial Highlights of Formosa Plastics Group (US$-000)
46
Chinese Petroleum Corporation (CPC)
47
Table: CPC-s long-term investments, 2011 and 2010 (TWD bn)
50
BASF Taiwan
51
Glossary Of Terms
52
Table: Glossary Of Petrochemicals Terms
52
Methodology
53
How We Generate Our Industry Forecasts
53
Chemicals And Petrochemicals Industry
53
Cross Checks
54
Business Environment Ratings
55
Table: Petrochemicals Business Environment Indicators And Rationale
55
Weighting
56
Table: Weighting Of Indicators
56

The Taiwan 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 Taiwan Petrochemicals Report provides industry professionals and strategists, sector analysts, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Taiwanese 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 Taiwanese petrochemicals market.
  • Target business opportunities and risks in the Taiwanese petrochemicals sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Taiwan.
  • 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