Business Monitor International


United Arab Emirates Petrochemicals Report

Published 26 November 2014

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United Arab Emirates Petrochemicals Report

Lower naphtha costs should help support Emirati margins in 2015, even if the impact of Abu Dhabi-based Borouge expansion drives down product prices, according to BMI's latest UAE Petrochemicals Report.

In the last four months of 2014, UAE product prices fell by 40% as markets slowed and naphtha feedstock prices declined. The situation was compounded by the commercialisation of output from the new Borouge 3 complex which includes one of the world's largest cracker units with 1.5mn tonnes per annum (tpa) of ethylene production capacity. Downstream units include 1.08mn tpa polyethylene (PE), 960,000tpa polypropylene (PP) and a 350,000tpa low density PE (LDPE) unit. The project also includes an 80,000tpa cross-linked polyethylene (XLPE) plant, which Borouge said will be a value-added complement to the 350,000tpa low-density polyethylene (LDPE) unit at the site.

  • Market pressures going forward include a manufacturing slowdown in China, increasing Indian self-sufficiency and an increase in US competitively priced ethane-based petrochemicals exports.

  • The planned Chemaweyaat complex will include an olefins plant, an aromatics complex and a range of downstream polymer and chemical units. It is scheduled to start production in 2015, but BMI believes that it is more likely to start in 2016. As a result of this expansion, by 2016, BMI expects ethylene capacity of 5mn tpa in the UAE, up from 2mn tpa in 2013, with PE more than tripling to 3.52mn tpa and PP rising by nearly 170% to 2.14mn tpa over the period.

  • Efforts to diversify the downstream sectors continue with the government aiming to ensure that plastics converters grow at the same rate as basic polymers production. This should secure added value with the domestic market comprising around 15% of total polymer sales.

  • In BMI's Middle Eastern Petrochemicals Risk/Reward Index matrix, the UAE has a score of 65.0 points out of 100, down 1.7 points since the previous quarter due to a decline in its country risk...

Table of Contents

BMI Industry View
7
SWOT
9
Political
11
Economic
12
Business Environment
13
Industry Forecast
14
Table: UAE's Petrochemicals Projects
15
Table: UAE's Petrochemicals Sector - Capacity, 2010-2018 ('000 tpa)
17
Macroeconomic Forecast
18
Fiscal Position Remains Solid
20
Non-Oil Sector To Become Growth Driver
22
Table: United Arab Emirates - Economic Activity
23
Industry Risk/Reward Ratings
24
MEA Petrochemicals Risk/Reward Ratings
24
Table: MEA Petrochemicals Risk/Reward Ratings, Q314
26
UAE Petrochemicals Risk/Reward Ratings
26
Market Overview
28
Table: The UAE's Petrochemicals Sector - Cracker Capacity, 2011-2018 ('000 tpa)
29
Industry Trends And Developments
30
Abu Dhabi
30
Dubai And The Northern Emirates
33
Overseas Investment
33
Developments In Related Industries
33
Table: Major UAE Oil And Gas Concessions
35
Company Profile
37
Abu Dhabi National Oil Company (ADNOC)
37
Abu Dhabi Polymers (Borouge)
41
Regional Overview
44
Middle East And Africa Overview
44
Looking To Asia
45
Diversification The Long-Term Focus
47
African Growth Focused In The North
47
Global Industry Overview
51
Table: Top 10 Ethylene Producers, 2013
54
Latin America: The Main Loser In US Expansion Drive
55
Asia: New Growth Markets Fuel Global Demand
56
Challenges For The Arabian Gulf
57
Russia And CIS: Coming To The Fore
57
Gasoline
59
Table: BMI Gasoline Price Forecast, 2012-2018
59
Weak Q114 For Gasoline
60
Europe And The US: Competitive Market To Limit Summer Gains
61
Asia: Market Rebalancing To Better Support Market
64
Risks To Outlook
67
Diesel
67
Table: BMI Crude Oil And Diesel Price Forecast (USD/bbl)
68
New York's One-Off Heat Up
68
NY: Short-Term Diesel Price Support Expected
71
Rotterdam: Green Policies Drive Diesel Forward
75
Singapore: Diesel Support With Power Risks
77
Risks To Outlook
81
Jet Fuel
82
Table: BMI Crude Oil & Jet Fuel Price Forecast, USD/bbl
82
Better Outlook Tames Price Fall
82
Table: Total Air Freight And Passenger Volume Growth
84
Risks To Outlook
87
Bunker fuel
88
Table: BMI Crude Oil & Bunker Fuel Price Forecast (USD/bbl)
88
The Storm Clears For Shipping
89
(Slightly) Better Times For Bunker Prices
91
Long-Term Threats Linger
92
Pressing Rotterdam & New York Harder
94
Risks To Outlook
94
Demographic Forecast
96
Table: United Arab Emirates' Population By Age Group, 1990-2020 ('000)
97
Table: United Arab Emirates' Population By Age Group, 1990-2020 (% of total)
98
Table: United Arab Emirates' Key Population Ratios, 1990-2020
99
Table: United Arab Emirates' Rural And Urban Population, 1990-2020
99
Glossary
100
Table: Glossary Of Petrochemicals Terms
100
Methodology
101
Industry Forecast Methodology
101
Risk/Reward Ratings Methodology
103
Table: Petrochemicals Risk/Reward Rating Indicators
104
Table: Weighting Of Indicators
105

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

Industry SWOT Analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the petrochemicals sector and within the broader political, economic and business environment.

BMI Industry Forecasts

Historic data series (2009-2013) and forecasts to end-2019 for 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 (USD/bbl) at major global energy trading hubs.
  • Economic: Nominal GDP (USDbn), real GDP growth (%), GDP per capita (USD), population (mn), unemployment (%), exchange rate (against USD).

BMI’s Petrochemicals Risk Reward Index

BMI’s Risk Reward Indices provide investors (both corporate and financial) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.

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.

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.

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.

Global & Regional Market Overview

Analysis of the key trends driving the global industry, including worldwide output/capacity and demand analysis across ethylene, polyethylene, polyvinyl chloride, polystyrene, polyethylene terephthalate and polypropylene. The regional analysis looks at the implications of local and global trends on specific company activity.

Sub-sectors covered by the Petrochemicals Reports include:

Oil & Gas, Oil Refining, Olefins (ethylene, propylene), Polyolefins (polyethylene, polypropylene), Polyvinyl Chloride, Polystyrene

Please note – not all country Reports cover all sub-sectors – see website for details.

Sources

The Petrochemicals Market Reports are based on a network of primary sources, such as multilateral organisations (ACC, APLA, Cefi c, ICCA, ICMA), national chambers of commerce and industry, national statistical offi ces, government ministries and central banks, and multinational companies.

*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.

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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