Q4 2012 Report on Hungary Petrochemicals Industry

BMI’s Hungary Petrochemicals report examines the pressures facing the industry as it deals with the fallout from the eurozone crisis, which will adversely impact domestic export-oriented industries, which remain the key consumers of Hungarian petrochemicals output. The report also assesses the sector’s diversification following an injection of Chinese investment in isocyanates.

In Q112, Hungarian petrochemicals producer MOL reported a 17.1% year-on-year (y-o-y) drop in petrochemicals output, although production was up 3.5% quarter-on-quarter (q-o-q). While olefins product sales grew 7% y-o-y to 92,000 tonnes in Q112, polymer sales declined 23% to 236,000 tonnes leading to a 16% drop in total petrochemicals sales to 328,000 tonnes. The broad-based decline followed the trend reported in H212, which helped negate most of the growth seen in H112. Downward pressure on the market, fuelled by the ongoing eurozone crisis, means that both domestic and external demand for Hungarian petrochemicals will remain depressed throughout 2012.

Despite ethylene sales holding up, the decline in polyethylene (PE) will impact on the company’s internal use of the feedstock. The situation is likely to be not as bad in the propylene-polypropylene (PP) chain. In terms of demand, the construction sector will continue to remain in the doldrums and the automotive industry is likely to feel the effects of declines in both external and domestic demand. Expansions in cracker capacity – to 610,000 tonnes per annum (tpa) – have helped reduce ethylene feedstock imports to virtually zero, with 90% of olefins output consumed within Hungary. Over the long term, the Hungarian petrochemical industry’s ability to expand its exports will likely be constrained by capacity.

BMI has revised the following forecasts/views: 
• BMI anticipates that in 2012, Hungary will have olefins production capacities of 660,000tpa ethylene and 400,000tpa propylene. It is also due to have polymer capacities of 400,000tpa highdensity polyethylene (HDPE), 210,000tpa low-density polyethylene (LDPE), 650,000tpa polypropylene (PP) and 440,000tpa polyvinyl chloride (PVC). In the fertiliser segment, Hungary is forecast to have capacities of 380,000tpa ammonia and 195,000tpa urea.
• BMI maintains its overall petrochemicals output growth for 2012 at -10%, on the basis that H211 levels of production are unlikely to be exceeded in 2012, due to the effects of the eurozone debt crisis and continued lacklustre demand. The decline will be consistent across all segments, but is set to be worse in polymers.
• In BMI’s Central and Eastern Europe petrochemicals rating, Hungary scores 57.8 points out of 100, netting it fourth position, 0.7 points behind Poland and 9.1 points ahead of Turkey. This score has not changed since the previous quarter.

Hungary Petrochemicals Industry

Published: August 2012                      No. of Pages: 54                       Price: US $ 1175

 

   

 

Table of Contents

BMI Industry View 5
SWOT Analysis 7
Hungarian Petrochemicals Sector SWOT .. 7
Hungary Political SWOT ... 7
Hungary Economic SWOT . 8
Hungary Business Environment SWOT .. 9
Global Overview . 10
Petrochemicals Market Overview 10
Table: World Ethylene Production By Country, 2011 And 2016 (‘000 tonnes capacity) . 10
Financial Results . 14
Table: Financial Results – Major Petrochemicals Companies, 2011 ... 14
Global Oil Products Price Outlook .. 15
Table: BMI Oil Price Forecasts, 2011-2016 15
Europe Market Overview ... 22
Hungary Market Overview 26
Industry Trends And Developments 27
Upstream Developments .. 27
Developments ... 28
MOL’s Strategy 28
Petrochemicals Risk/Reward Ratings . 30
Hungary Petrochemicals Risk/Reward Ratings . 30
Table: Central And Eastern Europe Petrochemicals Business Environment Ratings .. 30
Industry Forecast Scenario .. 33
Table: Hungary’s Petrochemical Industry, 2009-2016 (‘000tpa, unless otherwise stated) .. 33
Macroeconomic Outlook ... 36
Table: Hungary – Economic Activity, 2011-2016 38
Company Profiles .. 39
BorsodChem (BC) 39
Magyar Olaj-és Gázipari (MOL) . 41
Tiszai Vegyi Kombinat (TVK) .. 44
Demographic Outlook ... 45
Table: Hungary''s Population By Age Group, 1990-2020 (''000) .. 46
Table: Hungary''s Population By Age Group, 1990-2020 (% of total).. 47
Table: Hungary''s Key Population Ratios, 1990-2020 .. 48
Table: Hungary''s Rural And Urban Population, 1990-2020 48
Glossary Of Terms . 49
Table: Glossary Of Petrochemicals Terms .. 49
BMI Methodology ... 50
How We Generate Our Industry Forecasts .. 50
Chemicals And Petrochemicals Industry .. 50
Cross Checks ... 51
Risk/Reward Ratings 52
Table: Petrochemicals Business Environment Indicators And Rationale . 52
Weighting . 53
Table: Weighting Of Indicators 53Table: World Ethylene Production By Country, 2011 And 2016 (‘000 tonnes capacity) . 10
Table: Financial Results – Major Petrochemicals Companies, 2011 . 14
Table: BMI Oil Price Forecasts, 2011-2016 . 15
Table: Central And Eastern Europe Petrochemicals Business Environment Ratings . 30
Table: Hungary''s Petrochemical Industry, 2009-2016 (‘000tpa, unless otherwise stated) . 33
Table: Hungary – Economic Activity, 2011-2016 . 38
Table: Hungary''s Population By Age Group, 1990-2020 (''000) . 46
Table: Hungary''s Population By Age Group, 1990-2020 (% of total). 47
Table: Hungary''s Key Population Ratios, 1990-2020 . 48
Table: Hungary''s Rural And Urban Population, 1990-2020. 48
Table: Glossary Of Petrochemicals Terms . 49
Table: Petrochemicals Business Environment Indicators And Rationale . 52
Table: Weighting Of Indicators. 53