changing dynamics of asian solvents markets
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Changing Dynamics of Asian Solvents Markets
By Peh Soo Hwee, Senior Editor
Helen Lee, EditorLiu Xin, Editor
agenda
•Market review• Price drivers• Supply/demand • Outlook
Producers aim to raise IPA and MEK prices above $900/tonne CFR Asia on the back of rising costs.
Attempts hampered by weak demand.
Reduced IPA and MEK operating rates in the region.
The Markets Today
IPA
MEK
85,000
90,000
95,000
100,000
105,000
110,000
115,000
1 2 3 4 5
Volume
China IPA imports
2004 2005 2006 2007 2008
MEK
020,00040,00060,00080,000
100,000120,000140,000160,000
1 2 3 4 5
Year
Vo
lum
e
Imports
Exports
China MEK
2004 2005 2006 2007 2008
South KoreaAsia’s largest MEK market. Imports totalled Asia’s largest MEK market. Imports totalled 74,000 tonnes in 2008. 74,000 tonnes in 2008.
Shrinking import demand for IPA, est. at Shrinking import demand for IPA, est. at around 20,000 tonnes in 2008. Market around 20,000 tonnes in 2008. Market demand size at 70,000 tonnes, domestic demand size at 70,000 tonnes, domestic makes up the rest.makes up the rest.
Demand growth in derivative inks and Demand growth in derivative inks and coatings sector capped by competition from coatings sector capped by competition from China and SE Asia.China and SE Asia.
South Korea
What
NEXT
Cost push could see higher prices in H2. Pick-up in demand in Jul-Aug ahead of Ramadan (SE Asia) and in late Aug-Oct in China.
Sustained price recovery expected earliest by 2010/2011.
Modest growth of less than 5% in inks and coatings sector over next few years.
Diversification into higher-end coatings (saturation of decorative coatings).
MEK longer-term outlook:
MEK imports likely to shrink with ADD expected to stay in place and new plants coming on stream (Lanzhou). China as opportunistic exporter of MEK.
Korea to remain key import market in Asia, limited growth in SE Asia.
MEK new capacities
Company New capacity (t/yr) Total capacity (t/yr) Date
Zibo Qixiang Tengda Chemical 80,000 110,000 Q4 2008
Lanzhou Petrochemical 30,000 60,000 Sep 2009
Maoming Petrochemical 30,000 30,000 On hold
Yanbian Petrochemical 30,000 30,000 On hold
IPA longer-term outlook:
Imports into China expected to be more or less stable in the next few years. Korea turned net exporter in 2008, imports to shrink.
SE Asian growth hinges on demand from coatings, oleo-chemicals and pharmaceuticals.
Ethyl Acetate & Butyl Acetate
Market & TrendsJuly 2009
Helen LeeMarkets Editor
ICIS Pricing Asia
Agenda
• Product Uses
• Feedstocks – Acetic Acid, Ethanol & Ethylene
• Downstream trends
• China etac/butac exports
• New capacities
• Outlook
60%15%
15%
10%
Coatings process solvent Printing inks Misc
11% 3%
86%
Lacquer solent Process solvent Misc
Ethyl Acetate Usage Butyl Acetate Usage
Product Usage
Feedstocks
Acetic Acid content: Ethyl Acetate 68%, Butyl Acetate: 53%
Ethylene content: Ethyl Acetate 70-80%
Naphtha to Ethyl Acetate Korea Alcohol and LCY restart ethylene-based
ethyl acetate plants.
Chinese Domestic Ethanol to Ethyl AcetateChinese domestic ethanol prices and ethyl acetate USD/tonne
FOB China prices
40504100415042004250430043504400445045004550
Date range
CN
Y/t
on
ne
$600$620$640$660$680$700$720$740$760$780$800
US
D/t
on
ne
Chinese domestic ethanol prices(CNY/tonne)USD/tonne FOB China
Acetic Acid to Ethyl Acetate
Propylene to Butyl Acetate
Source: International Development Association of Furniture Industry of Japan
Import of Furniture by Items & Countries 2009
010,000,00020,000,00030,000,00040,000,00050,000,00060,000,000
Countries
Uni
t: 1,
000
Yen
Jan-Mar '08
Jan-Mar '09
Source: International Development Association of Furniture Industry of Japan
Butyl Acetate – Wood/furniture Coatings
Growing Exports from China
* Ethyl Acetate 2006: 109,399 tonnes2007: 137,030 tonnes2008: 183,897 tonnes2009: 62,115 tonnes (Jan to May)
* Butyl Acetate2006: 12,782 tonnes2007: 15,922 tonnes 2008: 11,643 tonnes2009: 8,440 tonnes (Jan to May)
Producer Capacity (tonnes/year)
Location Status
Yankuang Cathay Coal Chemicals
100,000 Tengzhou, Shandong
province, China
90%
Nanchang Ganjiang Solvents
Factory
80,000 Nanchang, Jiangxi province, China
Full
Shandong Haihua 100,000 Weifang, Shandong
province, China
Onstream early ’08 - idled Aug ‘08
Taixing Jinjiang Chemical (Jiangmen
Handsome)
100,000 (ethanol integrated)
Jiangsu, China Onstream Oct ‘09
Daicel Industries 50,000 (bioethanol-based)
Otake, Hiroshima, Japan
Onstream 1 July ‘09
New Ethyl Acetate Capacities
New Butyl Acetate Capacities
Producer Capacity (tonnes/year)
Location Status
Quanzhou Chuangyuan
Chemical
50,000 Fujian, China Study
Jiangsu Sopo 50,000 Zhenjiang, Jiangsu province, China
Study
Taixing Jinjiang Chemical (Jiangmen
Handsome)
50,000 Jiangsu, China Onstream Oct ‘09
Outlook
• Moderate price fluctuations expected, along with squeezed margins
• Flexible Operating Rates
• Low inventory to minimise risk
• Conservative buying/trading activity
Asian Acetone MarketAsian Acetone Market
Liu Xin
Markets Editor
ICIS pricing, Asia
Acetone margins squeezed
Source: ICIS pricing
Import margin narrows
Source: ICIS pricing & CBI
Rise of SE Asian imports
China acetone imports 2009
China acetone imports 2008
Source: China customs statistics
Zero tariff boosts Zero tariff boosts ASEAN acetone ASEAN acetone
exports to Chinaexports to China
Losing momentum…
Source: China customs statistics
New capacities 2009
Company Capacity Start-up
Sinopec Tianjin petchem 350ktpa End-2009
Sinopec Gaoqiao petchem (+) 40ktpa, (T) 100ktpa Sep-2009
Shutdown schedule 2009Producer Location
CapacityTurnaround
( KTPA)Mitsui Chemicals Chiba phe 230; ace 80 20 March- mid April 2009
Mitsui Chemicals Chiba phe 190; ace 114 No shutdown schedule
Mitsui Chemicals Osaka phe 200; ace 120 4 July - end July 2009
Mitsui Chemicals Singapore phe 300; ace 180 15 May - 20 June 2009
Mitsubishi Chemical Kashima phe 250; ace 150 21 May - end June 2009
Kumho No.1 Yeocheon phe 30; ace 20 Idle
Kumho No.2 Yeocheon phe 100; ace 60 7-22 May 2009
Kumho No.3 Yeocheon phe 250; ace 155 7-22 May 2009
LG Chem Yeocheon phe 260; ace 160 No shutdown schedule
FCFC Mailiao phe 400; ace 250 mid Jan - early Feb 2009
TPCC Kaohsiung phe 340; ace 204 No shutdown schedule
Chang Chun Kaohsiung phe 300; ace 185 No shutdown schedule
PTT Mab Ta Phut phe 200; ace 124 No shutdown schedule
Gaoqiao Petchem Caojing phe 120; ace 80 15 May - 20 June 2009
Bluestar Harbin Petchem Heilongjiang phe 72; ace 48 29 June - mid July 2009
Yanshan Petchem Beijing phe 112.5; ace 67.5 early August for 23 days