New market study, "Qatar Petrochemicals Report Q2 2016", has been published
New Energy market report from Business Monitor International: "Qatar Petrochemicals Report Q2 2016"
[USPRwire, Wed Feb 17 2016] The competitiveness of Qatar's ethane-fed petrochemicals industry is being diminished by the sustained low cost of naphtha feedstock used by its competitors as well as over-supply in key export markets , which is driving down product prices. Having cancelled major petrochemicals projects, Qatar is now focused on expanding and diversifying its downstream portfolio in order to add value and support margins.
China and India represent the largest markets for Qatar's polyethylene output, but exports to these Asian economic powerhouses are under pressure and the country's petrochemicals industry needs to diversify if it is to defend its profit margins. The prospects for the industry will therefore be determined primarily by the trends in the volatile and uncertain European markets. BMI believes the upshot will be pressure on Qatari margins and potentially lower production volumes, possibly leading to turnaround schedules being moved forwards.
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Sanctions relief on Iran pose another threat as Iran is likely to emerge as Qatar's main competitor. However, Qatar's petrochemicals industry is more advanced in its development than Iran and does not have the ramifications to investment - bureaucratic or infrastructural constraints - associated with Iran. There are also multiple risks facing Qatari fertiliser production, which is growing at a far higher rate than global demand growth. In this market, Saudi Arabia will represent a significant regional competitor in export markets, leveraging its competitive advantage in gas. India's move towards fertiliser self-sufficiency will also pose a challenge in Asian markets.
Planned expansion includes a third cracker unit at Qatar Petrochemicals Company (QAPCO)'s Mesaieed complex with capacity of 400,000 tonnes per annum (tpa). Along with debottlenecking operations, the new unit will increase total ethylene production capacity at the site to 1.2mn tpa from 2016.
In the past year, Qatar has witnessed the cancellation of two major petrochemicals projects: Al Sejeel and the Al Karaana. The main reason for the cancellations was low naphtha prices. Together, they removed from our five-year forecast 2.5mn tpa ethylene, 170,000tpa propylene, 83,000tpa butadiene, 2.02mn tpa polyethylene, 760,000tpa polypropylene, 1.5mn tpa mono-ethylene glycol, 300,000tpa linear alpha olefin and 250,000tpa oxo alcohols capacity.
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