"Spain Petrochemicals Report Q4" added to ReportBuyer.com

Sept. 26, 2011 - PRLog -- ReportBuyer.com has added a new report  http://www.reportbuyer.com/go/BMI07863

With Spanish economic growth not expected to pick up strongly in H211 due to the crimping effects of fiscal austerity, rising interest rates, pervasive unemployment and spare capacity within the industrial sector, the petrochemicals industry will be reliant on exports for growth, according to BMI's latest Spain Petrochemicals Report.

Growth in output in H111 was spurred by restocking, bolstered by the end of idling at Spanish plants. Germany, which has seen a better-than-expected increase in demand, will be the chief target of Spanish output. There is a chance that the domestic market will begin to recover in 2012, when we expect GDP to rise by 1.3%, but there is plenty of downside risk from the eurozone sovereign debt crisis - with Spain regarded as one of the trouble spots.

Widespread scaling back of government departments and investment projects, concomitant with hikes in taxes on income and consumption, will mean that fiscal austerity weighs on the recovery in household consumption and gross fixed capital formation (GFCF) over the next few quarters, holding back the domestic market. A potential threat to Spanish petrochemicals production comes from the tightening of monetary policy by the European Central Bank (ECB) in order to combat inflationary pressures. This has the potential to choke a nascent recovery in the Spanish market as well as cooling export growth.

The PVC segment remains under pressure from the depressed Spanish construction industry, not helped by economic policy and the high unemployment rate. Engineering plastics in the polypropylene (PP) and polyethylene (PE) segments will also suffer as industrial production remains well below 2007 levels with low capacity utilisation rates. The plastics market will be further hampered by the ending of car scrapping incentives in June 2010, although is unclear how much positive impact the measures have had on Spanish automotive production, which is normally highly export-oriented. In 2010, Spanish automotive output was up 6.9% to 2.32mn units following a 14.6% crash in 2009. This generated significant growth in demand in the PP segment in Spain in 2010. BMI believes the automotive industry will not return to precrisis levels over the medium term. As such, engineering plastics production in Spain will be increasingly focused on export markets, although competition will be fierce if Middle Eastern production continues to drag down international prices.

Spain scores 67.8 points, putting it in sixth place in our Western Europe Petrochemicals Ratings, 1.8 points behind the UK. Its score has improved in recent quarters due to a rise in its Country Risk score, particularly its long-term external risk.

Spain Petrochemicals Report Q4: 2011, is available at:
http://www.reportbuyer.com/chemicals/petrochemicals/spain...

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