Canada Petrochemicals Report 2016
Canada's petrochemicals industry saw mixed results in 2015 with a contraction in the value of basicchemicals sales, but strong growth in rubber and plastic production. While domestic petrochemicalsconsumption is expected to pick up in 2016, this could be offset by slower growth in Canada's main exportmarket, the US. There are added challenges of carbon pricing and the declining competitiveness of Canada'sethane-fed industry relative to naphtha-based rivals in Europe and Asia. Nevertheless, in the long term, theavailability of ethane derived from unconventional resources should drive petrochemicals investment.
In 9M15, the value of plastic products shipped rose 7.4% y-o-y while rubber rose 2.9% y-o-y. Chemicalcapacity utilisation rates averaged 84.3% in H115, up 8.7 percentage points (pp) over H114, while plasticand rubber rates were at 82.6% and 84.7%, up 4.2pp and 2.0pp respectively. Higher operating rates andgrowth in value indicate healthy margins in the petrochemicals industry. However, basic chemicals andindustrial chemical products exports fell by 5.8% to CAD16.4bn in 10M15, while plastic and rubberproducts rose 8.2% to CAD13.3bn, providing a mixed scenario for Canadian petrochemicals producers.
However, polymer margins were generally comfortable, setting the basis for further growth in 2016.
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