"Brazil Petrochemicals Report Q2 2010" available at Fast Market Research

Recently published research from Business Monitor International, "Brazil Petrochemicals Report Q2 2010", is now available at Fast Market Research
 
March 19, 2010 - PRLog -- The Brazilian petrochemicals market will exhibit a strong recovery in 2010 led by domestic consumer demand that should translate into industry operating rates of around 90% from 80% in 2009, according to BMI's latest Brazil Petrochemicals Report. In 2009, Brazil had olefins production capacities of 3.44mn tonnes per annum (tpa) ethylene, 2.15mn tpa propylene and 415,000tpa butadiene. In intermediates and aromatics, Brazil had capacities 980,000tpa benzene, 495,000tpa ethylbenzene, 740,000tpa ethylene dichloride, 530,000tpa styrene, 740,000tpa vinyl chloride monomer and 355,000tpa xylenes. In the polymers sector, Brazil had capacities of 840,000tpa HDPE, 795,000tpa LDPE, 1.42mn tpa LLDPE, 740,000tpa PET, 1.84mn tpa PP, 815,000tpa PVC and 320,000tpa PS. Compared to global markets, the Brazilian petrochemicals industry is faring relatively well in terms of sales volumes, but product prices have fallen at a faster rate than the decline in feedstock costs up the supply chain and consequently margins are under considerable pressure. In the first 10 months of 2009, Brazil's chemical exports totalled US$8.5bn, a fall of 17.0% y-o-y, while imports fell 28.5% y-o-y to US$21.4bn. Consequently, the chemicals trade deficit fell 34.5% y-o-y to US$12.9bn. The value of resins exports grew 2.7% y-o-y to US$1.3bn in the January-October period, while the volume of exports rose 73% y-o-y to 1.3mn tonnes. In the first nine months of 2009, industrial chemicals output was down 1.93% and domestic sales were down 17.92%. Apparent consumption of domestic chemicals products had been growing at 10% per annum until mid-2008 until it was hit by the economic crisis. In the January-September period, consumption was down 10.3% y-o-y. However, out of 13 chemicals segments, 11 reported a decline in output in the first nine months of the year: plasticisers fell 27.40% y-o-y, intermediates for fibres were down 26.99%, plasticiser intermediates fell 19.16% and thermosetting resins declined 19.15%. The only two segments to report growth in the period were chlor-alkalis (up 8.42% due in large part to the expansion of capacity at Carbocloro) and aggregate basic petrochemicals and thermoplastic resins (up 12.38%, albeit from a low base comparison). BMI believes that restocking and a modest recovery in demand in both domestic and external markets should help lift capacity utilisation rates to 90% in 2010, raising output by around 10% compared to an estimated -5% in 2009. Our more optimistic assessment is based on encouraging signs of robust performance of private consumption throughout the cyclical downturn and growing consumer confidence. In line with a view we have promoted for some time, it appears that a vibrant consumer sector has led the way in pulling Brazil out of its first recession since 2003. We expect more signs of a strong recovery, and keep to our 2010 real GDP growth forecast of 3.6%. We caution, however, that a rise in inflationary pressures could presage an early rate hike in 2010, thereby limiting the growth in consumer spending and the industries that depend on it. Investment in the petrochemicals industry should see ethylene production capacity up 63% by 2013, compared with 2008 levels, fuelling growth in the polyolefins sector. Petrobras has committed itself to the US$9.8bn Comperj complex. A second phase of derivative plants is set for completion by 2014. If this project is completed on time, by 2014 Brazil's PE capacity should reach just under 3.77mn tpa, while PP capacity should reach 3.45mn tpa and PVC capacity 1.05mn tpa. If the planned second phase of Comperj is completed in 2012, polyolefins output would exceed 9mn tpa, making Brazil self-sufficient in thermoplastic resins and giving it an exportable surplus of at least 3.5mn tpa. However, executives privately say the project is likely to be postponed due to investors' anticipated difficulties obtaining credit. Petrobras says it is fully committed to the project, dismissing rumours that it will not go ahead with the investment because of the global financial turmoil. BMI believes that the deterioration in global financial markets will delay the project by six to 12 months.

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Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets.  BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports.  Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports.  View more research from Business Monitor International at http://www.fastmr.com/catalog/publishers.aspx?pubid=1010

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Tags:Tpa, Petrochemicals, Chemical, Resins, Ethylene, Capacities, 740000tpa, Intermediates, Committed, Polyolefins
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