The German chemicals and petrochemicals industries can leverage their advantages in technology to secure modest growth in exports to emerging markets in 2010, according to BMI's latest 'Germany Petrochemicals Report'. However, the EU remains its largest market for German producers and BMI is not optimistic about their prospects. We believe output will grow at a modest rate of 4.5% and sales by 5.0%.
According to statistics from the Verband der Chemischen Industrie (VCI, German chemical industry association)
In 2010, BMI anticipates that producers from Czech Republic, Hungary and Romania will be competing to increase their share of the growing German market amid continued depressed demand in Central and Eastern Europe. This should create a highly competitive market environment in Germany with domestic producers and BMI cautions that a situation of oversupply could emerge that will depress prices, particularly in the vinyls chain which will take longer to recover from the effects of recession and tighter lending on the construction industry. This could ultimately speed up the closure of Germany's smaller, older and less efficient plants in an effort to bolster petrochemicals margins. The process of cost cutting in 2009 saw the closure of a 110,000tpa PP line in Wesseling; Lanxess sell its ABS business to Ineos and BASF closing its nylon-6 plant at Rudolstadt and its 80,000tpa PS plant at Ludwigshafen.
Key petrochemicals consuming industries such as automotive production and construction will see varying rates of recovery in 2010, at least in the first half. BMI expects slight improvement in automotive export demand during 2010, which will help bring a little stabilisation in German production, especially during the later half of the year. Meanwhile, the German construction industry has seen declines in business activities, orders and employment on the back of rising energy prices, transport costs and the weakened global economy. In 2009, we estimate that the value of the German construction industry fell 4.5% in real terms and we forecast 4.4% growth in 2010.
Despite likely reductions in capacity, BMI believes Germany will remain one of the world's most sophisticated, diverse and integrated petrochemicals industries. In 2009 the German petrochemicals industry had olefins production capacities of 5.75mn tpa ethylene, 3.95mn tpa propylene and 850,000tpa butadiene. BMI envisages no increase in ethylene capacities over the next five years, which will restrict scope for further downstream development. We also see little scope for Germany to increase its oil refining capacity from the current 2.39mn barrels per day. Further upgrading should take place, but the medium-term implication is one of refined products imports rising steadily.
Germany scores 81.9 points and is placed first in BMI's Western European Petrochemicals Rankings, ahead of France. BMI believes that Germany's score is unlikely to change, with no capacity additions planned over the next five years. However, with little new capacity coming onstream elsewhere in Western Europe over the period, it should retain its lead in the region.
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Partial Table of Contents:
Executive Summary
SWOT Analysis
- Germany Political SWOT
- Germany Economic SWOT
- Germany Business Environment SWOT
Global Overview
- Petrochemicals Market Overview
- Table: World Ethylene Production By Country, 2009 And 2014 ('000 tonnes capacity)
- Global Oil Products Price Outlook
- Table: Oil Product Price Assumptions, Q409-Q410 (US$/bbl)
- Table: Oil Product Price Data And Forecasts, 2007-2014 (US$/bbl)
European Overview
- Regulation
- Table: Key Elements Of REACH
- Production
Germany Market Overview
- Market Structure
- Insight Into The Competitive Arena
- Table: Top 20 German Chemical Companies By Turnover, 2008
- Table: Top 10 German Subsidiaries Of Foreign Companies By Turnover, 2008
Industry Trends And Developments
- Financial Results
Petrochemicals Business Environment
- Table: Western Europe Petrochemicals Business Environment Ratings
Industry Forecast Scenario
- Table: Germany's Petrochemicals Sector, 2007-2014 ('000 tpa, unless otherwise stated)
- Macroeconomic Outlook
- Table: Germany - Economic Activity, 2007-2014
Company Monitor
- BASF Aktiengesellschaft (BASF)
- BP Refining & Petrochemicals GmbH
- Helm Aktiengesellschaft
- Lanxess AG
Country Snapshot: Germany Demographic Data
- Section 1: Population
- Section 1: Population
- Table: Demographic Indicators, 2005-2030
- Table: Rural/Urban Breakdown, 2005-2030
- Section 2: Education and Healthcare
- Table: Education, 2002-2005
- Table: Vital Statistics, 2005-2030
- Section 3: Labour Market And Spending Power
- Table: Employment Indicators, 2001-2006
- Table: Consumer Expenditure, 2000-2012 (US$)
- Table: Average Annual Manufacturing Wages
Glossary Of Terms
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