"France Petrochemicals Report Q4 2015" Published

Strong petrochemicals growth performance in H115 in line with economic growth hides the underlying structural weaknesses in the sector and the wider economy, warns BMI's latest France Petrochemicals Report. Slow growth in the automotive sector and a continued contraction in residential construction indicate that the industry's performance could easily be thrown off-balance.

The French petrochemicals sector is enjoying the benefits of low naphtha costs as well as moderate demand growth. Plastic output rose 3.9% y-o-y in H115, although rubber production fell by around 1.1% y-o-y over the period. Growth came in the context of economic growth generated by low inflation and low interest rates, which have lifted domestic consumption.

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Recovery is set to be slow and could yet be derailed, particularly in the event of a debt default in Greece or a slowdown in the German economy. There are also structural challenges, namely the lack of integration with the refinery sector and problems of economies of scale. For the French petrochemicals industry to compete with the US and Middle East producers, it may need further restructuring with plant closures and business consolidation.

France is set to see a reduction in capacities with Total planning the closure of ethylene and propylene operations at its petrochemicals plant in Carling, which will remove 400,000tpa of ethylene capacity in 2015. It is also set to end crude processing at its La Mede facility by the end of 2016. A reduction in naphtha and olefins supply could be a prelude to further plant closures.

In terms of end markets, our outlook for the French construction sector remains bleak in 2015 and weighing down construction-related polymers, while vehicle production is in a slow recovery.

The France Petrochemicals Report has been researched at source, and features BMI Research's market assessment and independent forecasts for key petrochemicals sub-sectors. The report also analyses the impact of regulatory changes, recent developments and the background macroeconomic outlook and features competitive landscapes comparing companies by products and services, sales, market share, investments, projects, partners and expansion strategies.

BMI's France Petrochemicals Report provides industry professionals and strategists, sector analysts, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the French petrochemicals industry.

Key Benefits

* Benchmark BMI's independent petrochemicals industry forecasts to test other views - a key input for successful budgetary and planning in the French petrochemicals market.
* Target business opportunities and risks in the French petrochemicals sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in France.
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