Acrylonitrile – World Market Overview
(Michelle) Yang Qin
Synthetic Fibres Raw Materials Committee Meeting at APIC 2015
Seoul, 8 May 2015
• Trends in Global Acrylonitrile Production
• Downstream Sector Analysis
• Supply and Demand Balances
• Lessons from Other Markets
• Market Prospects
• Conclusions
APIC 2015
AGENDA
Source: Tecnon OrbiChem
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
1990 1995 2000 2005 2010 2015 2020
Thousand Metric Tons
North America
South America
West Europe
East Europe
ME & Africa
S & SE Asia
Northeast Asia
China
Source: Tecnon OrbiChem
APIC 2015
WORLD ACRYLONITRILE CAPACITY
• Rapid growth in capacity
APIC 2015
WORLD ACRYLONITRILE PRODUCTION TRENDS
Source: Tecnon OrbiChem
New Capacity ktpa Year
Anqing Petrochemical, China 130 2013
Tong Suh Petrochemical, S Korea 245 2013
Shandong Keluer, China 130 2014
Shanghai Secco, China 260 2015
Jiangsu Sailboat, China 260 2015
SABIC/Asahi Kasei, Saudi Arabia 240 2017
Ineos Tianjin, China 260 2017
Capacity Shut Down
Asahi Kasei, Japan (250) 2014
• Increasing availability of propylene and ammonia feedstock
• Propane dehydrogenation units in North America and Asia
• Ammonia plants in North America and the Middle East
• Low profitability
APIC 2015
WORLD ACRYLONITRILE PRODUCTION TRENDS
Source: Tecnon OrbiChem
5,200
5,400
5,600
5,800
6,000
6,200
6,400
6,600
6,800
7,000
7,200
500
1,000
1,500
2,000
Capacity
Acrylonitrile Margin
Margin = Acrylonitrile – 1.1 x Propylene $/ton
Source: Tecnon OrbiChem
APIC 2015
WORLD ACRYLONITRILE PRODUCTION TRENDS
Capacity (ktpa)
• Acrylic fibre losing dominance in acrylonitrile downstream
• Slow growth in most sectors, except polyacrylamide
• Strongest growth in low-volume consuming industries
APIC 2015
DOWNSTREAM SECTOR ANALYSIS
Source: Tecnon OrbiChem
0
1000
2000
3000
4000
5000
6000
2000 2005 2010 2015 2020
Thousand Metric Tons (of acrylonitrile)
Source: Tecnon OrbiChem
APIC 2015
ACRYLONITRILE CONSUMPTION BY END USE
Acrylic Fibre
Adiponitrile
ABS/SAN
Acrylamide
Nitrile Rubber
Other
Source: Tecnon OrbiChem
• Global acrylic fibre production has declined by an average 2% per year during the last five years (Montefibre, Radici)
• Production in 2014 was 1.735 million tons registering a decline of 9% from 2013
• Acrylic fibre costs continue to suffer from propylene prices and high acrylonitrile conversion costs
• Despite a sharp fall in production over the past 10 years, Tecnon OrbiChem expects modest (0.4%) production growth in the next 10 years, due to weak supplies of wool and cotton and continuing technical advantages for acrylic fibre in certain markets
APIC 2015
WORLD ACRYLIC FIBRE PRODUCTION TRENDS
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
1990 1995 2000 2005 2010 2015 2020
Million Metric Tons
North America
South America
West Europe
East Europe
ME & Africa
S & SE Asia
Northeast Asia
China
Source: Tecnon OrbiChem
APIC 2015
WORLD ACRYLIC FIBRE CAPACITY
0.0
0.5
1.0
1.5
2.0
2.5
3.0
1990 1995 2000 2005 2010 2015 2020
Million Metric Tons
North America
South America
West Europe
East Europe
ME & Africa
S & SE Asia
Northeast Asia
China
Source: Tecnon OrbiChem
APIC 2015
WORLD ACRYLIC FIBRE PRODUCTION
• Steady growth, in line with economic growth in most regions
• Chronic overcapacity diminishes profitability
• Styrene prices guide ABS competitiveness
• Free-trade agreements encourage Korean exports
• Exchange rate fluctuations disrupt trade flows
APIC 2015
ABS MARKET TRENDS
Source: Tecnon OrbiChem
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
11.0
1990 1995 2000 2005 2010 2015 2020
Million Metric Tons
North America
South America
West Europe
East Europe
ME & Africa
S & SE Asia
Northeast Asia
China
Source: Tecnon OrbiChem
APIC 2015
WORLD ABS CAPACITY
• North American shale gas boom fuels consumption growth
• Water treatment remains biggest end-use, but growth is slow
• Pulp and paper markets are also mature
APIC 2015
ACRYLAMIDE MARKET TRENDS
Source: Tecnon OrbiChem
• Nitrile rubber market growth is slow but steady
• New adiponitrile plant to come on stream this year in Shandong
• Spectacular growth in carbon fibre demand, but volumes are low
APIC 2015
OTHER DOWNSTREAM MARKETS
Source: Tecnon OrbiChem
2,500
3,500
4,500
5,500
6,500
7,500
1990 1995 2000 2005 2010 2015 2020
Source: Tecnon OrbiChem
APIC 2015
ACRYLONITRILE SUPPLY AND DEMAND
Consumption
Capacity to Produce
Thousand Metric Tons
• Consistent overcapacity
• Large producers manage operating rates globally
• Relatively stable trade flows among regions
• Japanese exports reduced after 2014 closures
• New capacities in China may reduce imports from the Americas
• Margins are likely to remain depressed
APIC 2015
ACRYLONITRILE SUPPLY AND DEMAND
Source: Tecnon OrbiChem
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
0
100
200
300
Capacity
PTA Margin
Margin = PTA – 0.67x PX ($/ton)
Source: Tecnon OrbiChem
APIC 2015
LESSONS FROM OTHER MARKETS – POLYESTER
Capacity (ktpa)
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
500
1,000
1,500
2,000
Capacity
Adipic AcidMargin
Margin = Adipic Acid – 0.7x Benzene ($/ton)
Source: Tecnon OrbiChem
APIC 2015
LESSONS FROM OTHER MARKETS – ADIPIC ACID
Capacity (ktpa)
5,200
5,400
5,600
5,800
6,000
6,200
6,400
6,600
6,800
7,000
7,200
500
1,000
1,500
2,000
Capacity
Acrylonitrile Margin
Margin = Acrylonitrile – 1.1 x Propylene $/ton
Source: Tecnon OrbiChem
APIC 2015
ACRYLONITRILE PROFITABILITY
Capacity (ktpa)
• Ineos/Sinopec intellectual property dispute
• Possible Montefibre Hispania acrylic fibre restart
• Continued conversion of acrylic fibre capacity to carbon fibre; output volumes are often reduced
• New demand for ABS resins in 3D printing
APIC 2015
ACRYLONITRILE MARKET PROSPECTS
Source: Tecnon OrbiChem
• Acrylonitrile profitability will remain low because capacity is expanding faster than demand is growing
• Increasing self-sufficiency in China will reduce inter-regional trade; exports from the Americas to Asia are likely to decline, despite seasonal cost advantages
• Slow growth to continue in acrylic fibre markets
• Low oil prices will reduce demand for polyacrylamide in fracking operations
• Carbon fibre production is growing rapidly, but very little acrylonitrile is consumed
APIC 2015
CONCLUSIONS
Source: Tecnon OrbiChem
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