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...
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.
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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.
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 Ratings
BMI's Petrochemicals Business Environment Ratings provide a country-comparative Risk-Reward Ratings index aimed at investors (both corporate and financial) in the regional petrochemicals market.
The ratings methodology makes sophisticated use of over 40 industry, economic and demographic data points and is part of BMI's integrated Country Risk-Industry Ratings 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$), population (mn), unemployment (%), exchange rate (against US$).
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.