polyester & intermediates - orbichem 2012/kichem2012_5_polyester_hk.pdf · • polyester fibre...

Polyester & Intermediates

Kim Hyun-Min

Tecnon OrbiChem Seminar at KICHEM 2012Seoul - 2 November, 2012

Polyester & Intermediates

• Polyester Fibre (Filament Yarn + Staple Fibre)

• PET Packaging Resin

• PTA

• MEG

• Paraxylene

• Conclusions

KICHEM 2012

AGENDA

Source: Tecnon OrbiChem

Million Metric Tons % Growth

KICHEM 2012

CHINA POLYESTER FIBRE PRODUCTION

Filament

Staple

China GDP

Fibre Growth


0

5

10

15

20

25

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

World PolyesterFibre

China PolyesterFilament

China PolyesterStaple

% AAGR

KICHEM 2012

POLYESTER FIBRE GROWTH RATES


KICHEM 2012

CHALLENGES IN CHINA 2012


Polyester FibreUpstream:

Volatility of feedstock prices

Downstream:• Slow pace of textile

and garments export growth

• High finished textile and garments inventories

• Weak demand for apparel in China

External: Uncertainty Global & China Economy

Internal:

Continuous large scale expansion

KICHEM 2012

FACTORS INFLUENCING CHINESE POLYESTER CHAIN

Crude Oil Global Stock Market

Feedstock Price PTA Future’s Market

Supply/Demand Government Policy

Peak Season Global Economy

External factors play a more important role since the global economic crisis

KICHEM 2012





Downstream:• Slow pace of textile

and garments export growth




Internal:


KICHEM 2012

2013 POLYESTER FIBRE EXPANSIONS IN CHINA

Producer Capacity Start-up Product

Fujian Jinxing 350 2013 PFY

Fujian Baihong 600 2013 H1 PFY

Sanfangxiang 600 2013 PFY

Liaoning longxiawan 400 2013 Q2 PFY

Hangzhou Tianyuan 1,000 2013 PFY

Zhejiang Xinfengming 500 2013 Q1 PFY

Jiangsu Hongtai 250 2013 PFY

Cixi Huaxing 200 2013 PFY

Zhejiang Rongsheng 500 2013 Q3 PFY

Jiangsu Hengli 600 2013 PFY

Zhejiang Haixun 400 2013 PFY

Fujian Jinxing 100 2013 PSF

Fujian Shanli 300 2013 PSF

Total 5,800


(1,000 Metric Tons)

KICHEM 2012





Downstream:• Slow pace of

textile and garments export growth




Internal:


KICHEM 2012

CHINA TEXTILE & GARMENT EXPORTS 2011 & 2012

$100 Million

• Jan-Aug 2012 export value decreased by 0.7%, on 2011.This compares with a 20% increase from in 2010 and 2011

• Exporters are not confident about 2013 performance.

• Small and medium sized producers may suffer reduced margins in 2013.


KICHEM 2012

KEY FACTORS FOR POLYESTER FIBRE IN CHINA IN 2013

Macro-Economic Issues

• New Government Stimulus Policy in 2013? – Helping local demand

With a leader in China, it is expected there will be some stimulus polices to boost the domestic economy and improve GDP growth for 2013

• Recovering Global Economy? – Helping textile and garments exports

There is still uncertainty for 2013 global economy recovery

Fundamental Issues

• New Polyester Fibre Projects - Delayed or On Time?

Projects have been delayed in 2012. New projects planned in Q4 may also delay to Q1 2013 Q1. It depends the on market condition

• Continued High Paraxylene Prices in 2013?

As in 2012, high feedstock costs, in particular PX, may put great pressure on polyester fibre producers in 2013

It is difficult to say whether demand for polyester fibre will pick up or remain weak in 2013.


Million Tons


KICHEM 2012

WORLD PET RESIN CAPACITY vs CONSUMPTION

• 2012 growth initially forecast at 6.2 %Likely to be weaker due to global economic conditions

• Massive new PET resin capacity is scheduled from 2012 to 2015

• Total world capacity to reach 34 million tons by 2015

% of Totalktpa% of Totalktpa

2009 2012

M&G 1,717 9.4% 1 Indorama 3039 13.4%

Indorama 1,352 7.3% 2 DAK/Alfa Group 2059 9.1%

FET 890 4.9% 3 M&G 1749 7.7%

DAK/Alfa Group 840 4.6% 4 SFX 1250 5.5%

LSB/Artenius 830 4.5% 5 FET 1200 5.3%

Eastman 800 4.4% 6 China Resources 1000 4.4%

Nan Ya 785 4.3% 7 Nan Ya 910 4.0%

SFX 750 4.1% 8 Octal 750 3.3%

Invista 675 3.7% 9 Sinopec 610 2.7%

Equipolymer 525 2.3% 10 Lotte Group 605 2.7%

9,164 50.2% 13,172 57.9%


KICHEM 2012

WORLD PET RESIN CAPACITY RANKINGS

Producer consolidation continues in developed regionsWe will see more Chinese PET resin producers in the list in 2013

KICHEM 2012

CHINA PET RESIN CAPACITY 2007-2013

1,000 Metric Tons

New ProjectsNameplate Capacity

(ktpa)Start-up

Date

Zhejiang Wankai 400 Apr 2012

China Resources 900 Jun 2012

Nanya 150 Jun 2012

Guangdong Indorama 300 Jul 2012

Yisheng Petrochemical 1,000 2013 H1

Sanfangxiang 300 2013 H1

HNCC Anyang Longyu 300 2013 Q3

Far Eastern Textile 700 2013 Q4

Total New Capacity 4,050


HNCC Anyang Longyu plans 1.3 million tpa PET resin capacity by 2015

KICHEM 2012

CHINA SOFT DRINK PRODUCTION 2011 & 2012

0

5000

10000

15000

Jan Feb Mar Apr May Jun

2011

2012

• Production for the first half of 2012 was 61million tons – up 8.2% on 2011

• Beverage sales for first half of 2012 not as high as earlier expected

• 2012 unlikely to see +20% soft drink market growth, as in past few years

Only 8.2% growth in H1 2012!

(1,000 Metric Tons)

KICHEM 2012

NOT ONLY IN CHINA- MORE PET RESIN CAPACITY EVERYWHERE

• Indorama, Holland 190 ktpa 2012

• Octal, Oman 500 ktpa 2012

• Dhunseri, India 230 ktpa 2012

• Lotte, UK 200 ktpa, 2013

• Polyplex, Turkey 300 ktpa 2013

• Reliance, India 650 ktpa 2013

• EIPET, Egypt 430 ktpa 2013

• JBF, Belgium 390 ktpa 2014

• Indorama, Poland 220 ktpa 2014

• Polyplex, Turkey 300 ktpa 2015

Total 3,620 ktpa

A SERIOUS THREAT TO KOREAN PET RESIN PRODUCERS?

Korea has been the largest PET resin exporter to Europe

To Europe?


KICHEM 2012

ANOTHER DIFFICULT YEAR FOR PET IN 2013?


• 2012 consumption growth forecasted at 13% in early 2012, but likely to be below 10%

• Beverage market is still growing in China, but the speed of growth has slowed down

• Market players in Asia are still not confident about 2013 PET business performance due to global economic conditions for export as well as massive new capacity in China in 2013

• Korean PET resin producers will be more under pressure to compete again massive new Chinese capacity in 2013

• Margins will be limited in 2013 due to sufficient supply as well as expected high feedstock costs

• Competition to supply the European market will be more severe

Million Tons


KICHEM 2012

WORLD PTA CAPACITY vs CONSUMPTION

• China capacity grows from 23.5 to 43.0 million tons in 2015 (+83%)

• World capacity grows at 13.8% AAGR 2012-2015, China at 22.4%

• World consumption growth at 6.9% AAGR 2012-2015

• Overcapacity as total world capacity reaches 87 million tons by 2015

0

100

200

300

400

500

600

700

800

2010 Apr Jul Oct 2011 Apr Jul Oct 2012 Apr Jul

PX - Naphtha

PTA - 0.66PX

KICHEM 2012

PTA SPREADS 2010–2012

$/Metric Ton


Strong demand for PTA

High PX price + Poor demand +

Massive capacity expansion

Company Location Capacity Start-Up(ktpa) Date

Hangbang Petrochemical Jiangyin, China (Jiangsu) 600 Jan 2011

PKN Orlen S.A. Plock, Poland 600 Apr 2011

Tuntex Petrochemical Pinnan, Taiwan 55 Jun 2011

Yisheng Dahua Petrochemical Dalian, China (Liaoning) 500 Jul 2011

Zhejiang Yisheng Petrochemical Ningbo, China (Zhejiang) 2,000 Jul 2011

Jiangsu Hailun Chemical Jiangyin, China (Jiangsu) 1,200 Sep 2011

Oriental Petrochemical Shanghai, China (Shanghai) 100 Oct 2011

Samsung Petrochemical Ulsan, South Korea 200 Nov 2011

Total 5,255China 4,400

KICHEM 2012

WORLD NEW PTA CAPACITY 2011


All PTA expansions in China in 2011 are integrated to Polyester fibre


KP Chemical Ulsan, South Korea 50 Jan 2012

KP Chemical Ulsan, South Korea 50 Jan 2012

BP Zhuhai Chemical Zhuhai, China (Guangdong) 200 Jan 2012

Artlant Sines, Portugal 700 Mar 2012

Zhejiang Yuandong Shaoxing, China (Zhejiang) 1,500 May 2012

Tuntex Petrochemical Pinnan, Taiwan 55 Jun 2012Jiaxing Petrochemical Jiaxing, China (Zhejiang) 1,500 Sep 2012 Hengli Petrochemical Dalian, China (Liaoning) 2,200 Sep 2012 Petroquimica Suape (Petrobras) Suape, Pernambuco, Brazil 700 Sep 2012 Xianglu Petrochemical Zhangzhou, China (Fujian) 4,500 Q4 2012 Hengli Petrochemical Dalian, China (Liaoning) 2,200 Oct 2012Yisheng Dahua Dalian, China (Liaoning) 3,000 Q4 2012 Zhejiang Yisheng Petrochemical Yangpu, China (Hainan) 2,200 Nov 2012 PT Indorama Petrochemicals Cilegon, Indonesia 35 Dec 2012Total 18,890China 17,390

KICHEM 2012

WORLD NEW PTA CAPACITY 2012


All PTA expansions in China in 2012 are integrated to Polyester fibre, except BP Zhuhai Chemical


Oriental Petrochemical Kuan Yin, Taiwan 1,500 2013 Formosa Chemicals & Fibre Ningbo, China (Zhejiang) 1,500 2013 CEPSA Quimica Montreal-East, Canada 50 Early 2013 Jiangsu Honggang Petrochemical Lianyungang, China (Jiangsu) 1,500 Jun 2013 Reliance Industries Dahej, India 1,150 Q2 2013 Ibn Rushd Yanbu, Saudi Arabia 280 Late 2013Total 5,980China 3,000

M & G Group Corpus Christi, United States 1,200 2014 Indorama Polymers Rotterdam Rotterdam, Netherlands 250 2014 Lotte Pakistan PTA Port Qasim, Pakistan 1,000 2014 Reliance Industries Dahej, India 1,150 Q1 2014 Sichuan Shengda Chemical Nanchong, China (Sichuan) 1,000 Q1 2014

Total 4,600

China 1,000

KICHEM 2012

WORLD NEW PTA CAPACITY 2013-2014


Only one PTA expansions in China, Jiangsu Honggang, is integrated to Polyester fibre in 2013-2014

-16

-12

-8

-4

0

4

8

12

16

20

24

28

2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025


Million Metric Tons

KICHEM 2012

WORLD SURPLUS PTA CAPACITY (95%)

KICHEM 2012

CHINA H1 2012 PTA IMPORTS vs NEW CAPACITY


China PTA projects2011 – 4,400 ktpa2012 – 17,390 ktpa2013 – 3,000 ktpa

China PTA Exports?This may take more time as local PTA producers are focused on securing domestic markets

H1 2012 Imports from Taiwan:1,089kt

down 19.6% on 2011

H1 2012 Imports from Korea:

1,533 ktup 11.8% on 2011

Million Tons


KICHEM 2012

WORLD MEG CAPACITY vs CONSUMPTION• New capacity mainly coming from China in 2012-2013

• World capacity grows at 5.5% AAGR 2012-2015, China at 16.4%

• In comparison with PTA, MEG has much less pressure from overcapacity


China Man-Made Fibre Ta-She, Taiwan 70 Late 2011

Chengdu Petrochemical Chengdu, China 360 Late 2011Total 410

Sinopec Wuhan Hubei, China 380 2012Ningbo Heyuan Chemical Ningbo, China 500 2012Henan Coal/Tongliao Jinmei Luoyang, China 200 Oct 2012Total 1,080

Assaluyeh Petrochemicals Assaluyeh (12th Olefin), Iran 710 2013Qianxixian Qianxi Coal Chemical Guizhou, China 300 Q1 2013Henan Coal/Tongliao Jinmei Anyang, China 200 Jul 2013Boylan Investment Group Xilinguole, China 200 Jul 2013Total 1,410

Chenma Weyaat Taweelah, UAE 870 2014Reliance Industry Dahej, India 720 2014Total 1,590

KICHEM 2012

WORLD NEW MEG CAPACITY 2011-2013



Million Metric Tons

KICHEM 2012

WORLD SURPLUS MEG CAPACITY (90%)

-16

-14

-12

-10

-8

-6

-4

-2

0

2

4

2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025

Million Tons


KICHEM 2012

WORLD PARAXYLENE CAPACITY vs CONSUMPTION

• World capacity to grow from 39 to 54 million tons in 2015 (+40%)

• World consumption is growing at 6.7% AAGR 2012-2015

• South Korea will add 5.1 million tpa capacity in 2013-2014

0

100

200

300

400

500

600

700

800

2010 Apr Jul Oct 2011 Apr Jul Oct 2012 Apr Jul

PX - Naphtha

PTA - 0.66PX

KICHEM 2012

PARAXYLENE SPREADS 2010 – 2012

$/Metric Ton


Strong PX Margins -

Tight Supply

New PTA Capacity -

Further price increases for PX in 2013?


PKN Orlen S.A. Plock, Poland 400 Apr 2011S-Oil Corporation Onsan, South Korea 900 Apr 2011Total 1,300

Formosa Chemicals & Fibre Mailiao, Taiwan 100 Start 2012Thai Paraxylene Sri Racha, Thailand 40 Apr 2012Samsung Total Petrochemical Daesan, South Korea 160 Jun 2012ExxonMobil Jurong Island, Singapore 80 Mid 2012Dragon Aromatics Zhangzhou, China (Fujian) 1,600 Dec 2012Total 1.980

Sinopec Hainan Refinery & Chemical Yangpu EDZ, China (Hainan) 600 2013HC Petrochem Daesan, South Korea 800 Feb 2013ONGC Mangalore Petrochemicals Mangalore, India 920 Q1 2013SATORP Al Jubail, Saudi Arabia 700 Mid 2013Byco Oil Pakistan Ltd. Lasbela, Pakistan 92 Q3 2013Total 3.112

JSC KazMunayGaz Atyrau, Kazakhstan 500 2014PetroChina Liaoyang Petrochemical Liaoyang, China (Liaoning) 900 2014Jurong Aromatics Corporation Jurong Island, Singapore 800 Feb 2014SK Global/JX Nippon Oil JV Ulsan, South Korea 1,000 Aug 2014Nghi Son Refinery & Petrochemical Nghi Son, Vietnam 660 Q2 2014Samsung Total Petrochemical Daesan, South Korea 1,000 Sep 2014SK Energy Incheon, South Korea 1,300 Q3 2014GS-Caltex Yeochon, South Korea 1,000 End 2014Total 7,160

KICHEM 2012

WORLD NEW PARAXYLENE CAPACITY 2011-2014


-16

-12

-8

-4

0

4

8

12

2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025

Million Metric Tons


KICHEM 2012

WORLD SURPLUS PARAXYLENE CAPACITY (90%)

KICHEM 2012

CHINA H1 2012 PX IMPORTS vs NEW CAPACITY


China PX projects2012 – 1,600 ktpa2013 – 600 ktpa2014 – 900 ktpa

How much extra PX needed for new PTA capacity (17,400 ktpa) starting up in 2012?

Theoretically, an additional 11,660 ktpa

H1 2012 Imports from Korea:

833 ktup 77% on 2011

H1 2012 Imports from Japan:881 kt

up 63% on 2011

KICHEM 2012

CONCLUSIONS

• China will continue to dominate global production of polyester fibre

• Producer consolidation continues in developed regions and will likely move to developing regions in the forecast period

• Rapid expansion of PTA capacity in Asia, especially in China, has begun to stretch available supplies of Paraxylene and margins have been squeezed

• PX capacity addition as planned should be sufficient to match polyester growth rates but does not match planned new PTA capacity growth

• New paraxylene capacity is expected mainly in China, but growing environmental awareness may delay new projects.

• In comparison with PTA, MEG has much less pressure from overcapacity issue, and may see some reasonable margins in 2013

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polyester & intermediates - orbichem 2012/kichem2012_5_polyester_hk.pdf · • polyester fibre...

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