Petrochemical industry in for a hard landing after expanding at breakneck speed

Get ready for a particularly bad set of Q1 numbers.

The petrochemical industry is in for a particularly bad first quarter after expanding capacity at an unprecedented rate over the past few years.

According to HSBC, the petrochemical sector will suffer most as Singapore’s non-oil domestic exports continue to contract.

In February, the decline in non-electronic NODX was led by petrochemicals (-30.9 per cent), pharmaceuticals (-22.4 per cent) and primary chemicals (-24.3 per cent).

“Oil-related sectors such as refining, petrochemicals and offshore engineering will face headwinds due to the low price environment. We expect 1Q15 to be particularly bad for the petrochemical industry, which has expanded capacity at a breakneck speed over the past years. We see NODX growth picking up in 2H15, especially if growth momentum in the EU picks up,” stated HSBC.