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The recovery in French plastics consumption will be slow as the construction industry will continue to struggle with a contraction of -0.9% in 2010 and little sign of a revival in plastics demand from the automotive industry until 2011 at the earliest, according to BMI’s latest France Petrochemicals Report. While a modest revival was under way by mid-2010, it is a fragile one vulnerable to Europe-wide fiscal austerity and the possibility of a double-dip recession. The domestic market is also set to be sluggish, with French real GDP growth set to slow to 1.0% in 2011 from an expected 1.5% in 2010, and remain well below pre-crisis levels through the medium term. Fiscal cuts in the autumn will remove a key pillar of demand, while the bounce in exports through H110 will tail off as base effects become less favourable and the impact of austerity measures weighs on demand for French exports in developed states. Private consumption should provide some relief, but we do not expect a fundamental recovery in household spending to get under way until 2012 at the earliest.
BMI’s scenario is shared by the Union des Industries Chimiques (UIC, Chemical Industries Union), which expects growth to moderate from 15.4% y-o-y in Q110 to near zero by the end of the year. However, the strong rate of growth in H110 has prompted the UIC to revise up its growth forecast for the year to 9.0% from 5.5% it forecast in early 2010. BMI is slightly less optimistic, forecasting a sharper slowdown in Q410 to result in 8.0% annual growth as a result of the removal of government stimulus and higher base effects. In reality, the petrochemicals sector will remain in an historic slump, following a 20- 25% fall in output in 2009.
BMI believes that the industry’s lack of competitiveness both in the EU and beyond will lead to significant cut-backs in capacity. It will take until 2012 before the industry can return to pre-recession operating rates and by that time old, inefficient and smaller capacities are likely to be taken offline. Already, Total’s petrochemicals complex in Carling has seen a 220,000tpa reduction in ethylene capacity and the planned closure of the Dunkerque refinery will remove 90,000tpa of polymer-grade propylene as well as naphtha feedstock supply to downstream units. Many French plants are too small to compete against new world-scale facilities in the Middle East and Asia, which have an advantage in access to cheaper ethane feedstock and lower operating costs. The French petrochemicals market is also set to diminish as a proportion of the global market as China and other Asian markets increase in importance. France scores 73.7 points it BMI’s proprietary petrochemicals ratings, putting it in second place in our Western European Petrochemicals Rankings, 8.2 points behind Germany and 1.8 points ahead of Belgium. The country’s petrochemicals sector needs to overcome deterioration in external competitiveness and stagnation in domestic demand to hold on to the capacity it has and prevent closures. France’s score is in danger of being eroded by likely capacity shut-downs in coming years, although its situation is not unique in Western Europe.
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The recovery in French plastics consumption will be slow as the construction industry will continue to struggle with a contraction of -0.9% in 2010 and little sign of a revival in plastics demand from the automotive industry until 2011 at the earliest, according to BMI’s latest France Petrochemicals Report. While a modest revival was under way by mid-2010, it is a fragile one vulnerable to Europe-wide fiscal austerity and the possibility of a double-dip recession. The domestic market is also set to be sluggish, with French real GDP growth set to slow to 1.0% in 2011 from an expected 1.5% in 2010, and remain well below pre-crisis levels through the medium term. Fiscal cuts in the autumn will remove a key pillar of demand, while the bounce in exports through H110 will tail off as base effects become less favourable and the impact of austerity measures weighs on demand for French exports in developed states. Private consumption should provide some relief, but we do not expect a fundamental recovery in household spending to get under way until 2012 at the earliest.
BMI’s scenario is shared by the Union des Industries Chimiques (UIC, Chemical Industries Union), which expects growth to moderate from 15.4% y-o-y in Q110 to near zero by the end of the year. However, the strong rate of growth in H110 has prompted the UIC to revise up its growth forecast for the year to 9.0% from 5.5% it forecast in early 2010. BMI is slightly less optimistic, forecasting a sharper slowdown in Q410 to result in 8.0% annual growth as a result of the removal of government stimulus and higher base effects. In reality, the petrochemicals sector will remain in an historic slump, following a 20- 25% fall in output in 2009.
BMI believes that the industry’s lack of competitiveness both in the EU and beyond will lead to significant cut-backs in capacity. It will take until 2012 before the industry can return to pre-recession operating rates and by that time old, inefficient and smaller capacities are likely to be taken offline. Already, Total’s petrochemicals complex in Carling has seen a 220,000tpa reduction in ethylene capacity and the planned closure of the Dunkerque refinery will remove 90,000tpa of polymer-grade propylene as well as naphtha feedstock supply to downstream units. Many French plants are too small to compete against new world-scale facilities in the Middle East and Asia, which have an advantage in access to cheaper ethane feedstock and lower operating costs. The French petrochemicals market is also set to diminish as a proportion of the global market as China and other Asian markets increase in importance. France scores 73.7 points it BMI’s proprietary petrochemicals ratings, putting it in second place in our Western European Petrochemicals Rankings, 8.2 points behind Germany and 1.8 points ahead of Belgium. The country’s petrochemicals sector needs to overcome deterioration in external competitiveness and stagnation in domestic demand to hold on to the capacity it has and prevent closures. France’s score is in danger of being eroded by likely capacity shut-downs in coming years, although its situation is not unique in Western Europe.
About Us
ReportsandReports comprises an online library of 10,000 reports, in-depth market research studies of over 5000 micro markets, and 25 industry specific websites. Our client list boasts almost all well-known publishers of such reports across the globe. We as a third-party reseller of market research reports employ a number of marketing tools, such as press releases, email-marketing and effective search-engine optimization techniques to drive revenues for our clients. We also provide 24/7 online and offline support service to our customers.
Contact:
Ms. Sunita
7557 Rambler road,
Suite 727, Dallas, TX 75231
Tel: +1-888-989-8004
http://reportsandreports.blogspot.com/
http://reportsandreports.proarticles.co.uk/
http://reportsnreports.wordpress.com/
