India Petrochemicals Report Q3 2016 - New Market Study Published


New Energy market report from Business Monitor International: "India Petrochemicals Report Q3 2016"



[ClickPress, Tue Jul 05 2016] The performance of the Indian petrochemicals industry is set to strengthen in 2016 as new capacity comes onstream, albeit subject to the lengthy delays that have come to characterise the sector's development. The year began positively with the rescue of Haldia Petrochemicals and the completion of the Brahmaputra Gas Cracker and Polymer Ltd, both in the east of India where the government is now focusing its attention to take advantage of growth in neighbouring markets.

In Q116, growth was lacklustre compared to the same period in 2015 and saw a significant downturn compared to the previous quarter. Based on the average industrial production index for the first three months of 2016, chemicals output was up 0.6% y-o-y and 1.8% q-o-q, but rubber and plastic production fell 0.5% y-o-y and 6.8% q-o-q respectively. However, output was approximately in line with overall industrial trends with the industrial index growing 0.2% y-o-y, but falling 6.4% q-o-q.

Full Report Details at
- http://www.fastmr.com/prod/1191631_india_petrochemicals_report.aspx?afid=301

The agriculture sector accounts for the bulk of polyvinyl chloride (PVC) demand in the country, with 70% of the resin purchased for use in irrigation pipes. The remaining 30% finds use in the construction sector, where PVC is used to make profiles, films, sheets and fittings, and in calendaring applications. The automotive sector will be a major force in driving engineering and high-performance plastics and synthetic rubber in India, and is fuelling the diversification of downstream industries. Producers are seeking to increase the value of production and to raise margins by tapping into growth in the autos industry, particularly in styrene-butadiene rubber, which India does not produce but which is needed for tyre production. The automotive component and tyre sectors are witnessing double-digit growth, fuelling demand for high value materials.

India's demand for petrochemicals is expected to grow at about 10% in FY2016/17, a rate that will outstrip overall economic growth. Growth varies across segments with polypropylene (PP) typically growing at nearly twice the average growth rate, reaching 4.15mn tonnes in 2015, although still 1.75mn tonnes below annual PP output capacity.

BMI continues to believe that growth will strengthen in 2016 and beyond with per capita petrochemicals consumption doubling in 2015-2020 and output growth set to reach 10% per annum.

India's Petrochemicals Risk/Reward Index (RRI) continues to climb as the market grows and the government presses ahead with its efforts to attract investment. This quarter, the RRI has been revised up again by 0.2 points to 66.2 due to an improved market risk score, which now exceeds China's score. India is 0.7 points ahead of Malaysia in the overall score and 2.7 points behind Thailand. Greater clarity on investment policies and new capacity expansion would further boost the score.

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