New Report Available: India Petrochemicals Report Q3 2013

The Indian petrochemicals industry will continue to surge in 2013 as the market becomes increasingly self-sufficient and domestic producers benefit from a weak rupee and a revised tariff structure. However, a poor business climate, exacerbated by chaotic government policies and land disputes, are undermining progress and could prove detrimental in the long term. The possible collapse of Haldia Petrochemicals in West Bengal, amid a dispute between the main private shareholder and the state government, underlines the problems facing the sector, in spite of the growth potential that India is beginning to realise.

BMI believes that India's demand for polymers will grow at around 10% in 2013 and 2014, spurred by the stronger consumption of polyolefins. As a result, polymer demand should rise to 9.86mn tonnes in 2013 and 10.84mn tonnes in 2014. Growth is slightly down on the 13% reported in 2013 due to lingering weakness in global demand as well as a more subdued economic environment; we have downgraded our FY2013/2014 and FY2014/2015 real GDP growth forecasts to 5.5% and 6.0%, from 6.2% and 6.7%, respectively.

Full Report Details at
- http://www.fastmr.com/prod/664904_india_petrochemicals_report_q3_2013.aspx?afid=301

Factors militating against growth included the weakening of the Indian rupee, which depreciated by around 15% against the US dollar in 2012, a decline in GDP real growth to around 5.7% (from 6.5% in 2011) and a slump in industrial growth, which hit negative territory in mid-2012. On the upside, automotive output will be supported by average growth rates of over 8% in the medium-term. There are further structural challenges ahead, notably imported feedstock requirements, which have raised costs as a result of a combination of rising global energy prices and currency depreciation.

Over the last quarter BMI has revised the following forecasts/views:

* Much of the growth in 2013 will be served by growing domestic capacities. A 50% leap in PE capacity is anticipated. Around 60% of the 1.88mn tpa rise in polyethylene (PE) capacity will come from linear lowdensity polyethylene (LLDPE). At the same time, polypropylene (PP) capacity is set to increase by a quarter to 4.72mn tpa in 2013.
* India implemented an increase in duties on imports of all polymers and ethylene vinyl acetate (EVA) from 5.0% to 7.5% in May, a move that helped domestic producers but hit converters with higher costs. BMI believes that it will lead to higher domestic list prices of polymers in the domestic market as well as lower imports. At the same time, domestic producers will benefit from a lower import duty of 5% on feedstocks - such as naphtha, ethylene, EDC and VCM - in which India suffers from some under-supply. BMI does not believe that a consequent increase in domestic prices will hit demand, which remains strong due to robust demand and tight supply.

About Fast Market Research

Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.

For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156.

You may also be interested in these related reports:

- Romania Petrochemicals Report Q4 2013
- Spain Petrochemicals Report Q3 2013
- Algeria Petrochemicals Report Q3 2013
- Turkey Petrochemicals Report Q3 2013
- Egypt Petrochemicals Report Q4 2013