welcome asian aromatics market outlook webinar...market outlook webinar 01 august 2012 hosted by...
TRANSCRIPT
WELCOME
Asian Aromatics
Market Outlook Webinar
01 August 2012
Hosted by ICIS
www.icis.com
Corporate Structure
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ICIS Global Presence
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situation and ICIS pricing helps us with our forecasts.”
Mr Thomas Driesen, Commodity Manager, OXEA GmbH
Asia’s aromatics: Trends and directions
Mahua Chakravarty
Senior Editor, ICIS Pricing
2012
www.icis.com
Key recent trends for benzene and toluene
www.icis.com
Volatility and macroeconomic slowdown:
impact on benzene and toluene
• Upstream volatility and economic crisis caused slow demand from the
downstream markets and liquidity drops
• High PX prices through 2011 resulted in high production of benzene and
stronger demand for toluene
• Benzene influenced by supply glitches in Asia and uncertainty in US and EU
markets
• China’s downstream industries struggle with low credit liquidity and slower
economy
www.icis.com
BTX production high through 2011, but poor olefins affect
crackers in Q2 2012
• BTX supply from crackers high in 2011, supported by positive margins,
but supply tightened from Q2 2012
• High PX prices through 2011 supported reforming margins and
operating rates, but PX softens in 2012
• TDP margins thin due to narrow benzene/toluene spread, but gains
support from firm MX
•Benzene production from HDA minimal due to negative margins, but
impact on market limited
www.icis.com
Naphtha to BTX spread
-200
-100
0
100
200
300
400
500
04/0
1/2
008
04/0
4/2
008
04/0
7/2
008
04/1
0/2
008
04/0
1/2
009
04/0
4/2
009
04/0
7/2
009
04/1
0/2
009
04/0
1/2
010
04/0
4/2
010
04/0
7/2
010
04/1
0/2
010
04/0
1/2
011
04/0
4/2
011
04/0
7/2
011
04/1
0/2
011
04/0
1/2
012
04/0
4/2
012
04/0
7/2
012
2008 to July 2012
US
D/t
on
ne
BZ-Naphtha TOL-Naphtha MX-Naphtha
2011-2012 BTX margins held up by strong MX-PX chain &
steady toluene
Source: ICIS
www.icis.com
BTX margins up from 2011 on strong MX-PX chain & steady
toluene
134154.12 151.1
190.6
226.6
0
200
400
600
800
1000
1200
1400
2008 2009 2010 2011 2012
0
50
100
150
200
250
BTX Naphtha Spread
Source: ICIS
www.icis.com
BENZENE
www.icis.com
Arbitrage to remain key outlet for benzene in Asia
•Exports from Asia to the US rise in 2012 despite the slow
economic climate in the US
•Coal benzene supply continues to increase in China, adding to
the regional high balance
•But SM capacity growth slows to 3 new plants in 2012
•Bulk of the growth in benzene demand in 2012-14 is expected to
come from the phenol and caprolactam segments
www.icis.com
China continues to lead Asia’s capacity growth in 2012
Company Country/Location Benzene (kt/yr) Start-up
Gaoqiao PC Shanghai, China 120 Jan 2012
Jiujiang PC Jiujiang, China 80 H2 2012
Jilin PC Jilin, China 110 Q2 2012
Daqing PC Daqing, China 120 Q4 2012
Dragon Aromatics
(Xiamen)
Zhangzhou, China 240 Early Q3 2012
Petrochina Sichuan
PC
Pengzhou, China 150 Late 2012- H1 2013
Fushun PC Fushun, China 160 Q4 2012
Huachen Energy Pinghu, China 30 Q3 2012
Fujian R & P Fujian, China 40 Late 2012- 2013
ExxonMobil Singapore 340 H2 2012
Source: ICIS & Chemease
www.icis.com
China will continue to add capacity in 2013
Company Country/Location Benzene (kt/yr) Start-up
Sinopec Quanzhou, China 250 2013
Sinopec Wuhan Wuhan, China 160 2013
Source: Chemease
www.icis.com
China’s coal benzene capacity additions in 2012-2013
Company Benzene (kt/yr)
Shandong Jinneng 100
Shandong Lumei 80
Jiangsu Meiya 80
Jiangsu Gelanchunpu 50
Jiangsu Dinghe 100
Jiangsu Shatong 100
Neimenggu Baotou 100
Hebei Dahua 50
Hebei Wangbaixing 100
Ningxia Baofeng 80
Henan Shouchuang 100
Henan Shoushan 50
Henan Jinma 100
Henan Zhongchuang 55
Total 1,145
www.icis.com
Coal benzene being used for cyclohexanone and SM
production
Demand by downstream sectors- 2011
Styrene
10%
Cyclohexanone
46%
Aniline
21%
Phenol
7%
Maleic Anhydride
12%
Others
4%
Styrene Cyclohexanone Aniline Phenol Maleic Anhydride Others
Source: Chemease
www.icis.com
China is a balanced market now
Source: China Customs
0
200,000
400,000
600,000
To
nn
es
Imports Exports 2 per. Mov. Avg. (Imports)
Imports 248,735 327,981 621,839 197,232 185,685 157,096
Exports 56,129 69,410 278,111 119,714 110,349 19,180
2007 2008 2009 2010 2011Jan-June
2012
x
www.icis.com
Growth in new SM production slows down from 2012
Company Location Product Capacity
(tonnes/yr)
Start-up status
Yanshan Beijing, China SM 270,000 2012
Baling Hunan, China SM 120,000 Aug 2012
PetroChina Jilin Jilin, China SM 320,000 Oct 2012
SP Chemical Jiangsu, China SM 320,000 Delayed to late
2013
PetroChina
Taizhou
Zhejiang, China SM 600,000 2015
Source: ICIS & Chemease
www.icis.com
Rapid phenol expansions in 2012-14 maintain demand for benzene
Company Location Product Capacity
(tonnes/yr)
Start-up status
Kingboard Jiangsu, China Phenol 200,000 2012
Sinopec
Yanshan
Beijing, China Phenol 137,500 2012-2013
Sinopec Mitsui Caojing, China Phenol 250,000 2013
Shandong
Lihuayi
Shandong,
China
Phenol 220,000 2013
LG Chem South Korea Phenol 300,000 2013
FCFC Ningbo, China Phenol 300,000 2013-2014
Ineos
Zhangjiagang
Nanjing, China Phenol 400,000 2014
Changchun Jiangsu, China Phenol 200,000 2014
CEPSA Shanghai,
China
Phenol 250,000 2014
Source: ICIS & Chemease
www.icis.com
Exporting to US remains key for Asia
2010
42%
30%
12%
2%3% 6% 5%
US Taiwan China Singapore Saudi Arabia Japan Netherland
2009
23%
23%25%
5%
2%
21%1%
US Taiwan China Singapore Saudi Arabia Japan Netherland
Source: KITA
www.icis.com
South Korean exports to US rise in 2011-2012
2011
47%
24%
11%
0%7%
8% 3%
US Taiwan China Singapore Saudi Arabia Japan Netherland
2012
43%
25%
8%
9%
7%6% 2%
US Taiwan China Singapore Saudi Arabia Japan Netherland
Source: KITA
www.icis.com
South Korean exports to US regular in 2012
354,714 374,513
483,435446,158
518,518
282,965
531,858
670,248
315,280
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
2004 2005 2006 2007 2008 2009 2010 2011 Jan-June
2012
Source: Korea International Trade Association (KITA)
www.icis.com
TOLUENE
www.icis.com
Asia desperately looks for outlets other than China
• Demand from China mired in uncertainty and depends on local
production, demand, inventory level
• Gasoline blending is emerging as a key outlet within Asia, especially China, and is driven by economic growth
• Simultaneously, there is a race to export to southeast Asia, India and other regions
Average monthly imports to China in 2011 was 50,000-60,000 tonnes, which dips in 2012
www.icis.com
Uncertainty in Chinese imports amid rapid capacity growth
China's total imports
567,136
444,637
273583
790932829337
655090
201900
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
2006 2007 2008 2009 2010 Jan-Nov
2011
Jan-April
2012
2008-April 2012
To
nn
es
Source: China Customs
Imports down in 2011 & 2012 on economic slowdown and cash flow issues
www.icis.com
2012 imports fall although inventory dips
0
50000
100000
150000
200000
250000
Jan-0
9
Mar-
09
May-0
9
Jul-09
Sep-0
9
Nov-0
9
Jan-1
0
Mar-
10
May-1
0
Jul-10
Sep-1
0
Nov-1
0
Jan-1
1
Mar-
11
May-1
1
Jul-11
Sep-1
1
Nov-1
1
Jan-1
2
Mar-
12
May-1
2
East China inventory at historical high in 2010
Source: Chemease
www.icis.com
South Korea spreads its wings beyond China to southeast
Asia and India
2011
China
60%Japan
8%
India
11%
Indonesia
3%
Vietnam
3%
US
10%
Singapore
3% Australia
2%
Source: KITA
www.icis.com
42%
21%
12%
10%
5% 3% 4%
1%1% 1%
China Taiwan India US Indonesia
Vietnam Japan Malaysia Philippines Singapore
India emerges as key export destination for
South Korea, after China & Taiwan
Source: KITA
Jan-June 2012
www.icis.com
South Korean supply finds outlet in southeast Asia
Source: KITA
0
10,000
20,000
30,000
40,000
50,000
Indonesia Vietnam 2 per. Mov. Avg. (Vietnam) 2 per. Mov. Avg. (Indonesia)
Indonesia 6,005 965 1,918 5 3,001 33,738 21,169 26,314 28,908
Vietnam 2,477 9,740 6,803 19,903 41,455 25,931 18,783
2004 2005 2006 2007 2008 2009 2010 2011 2012
www.icis.com
South Korea & southeast Asia dominate exports to India
0
20,000
40,000
60,000
80,000
100,000
India 2 per. Mov. Avg. (India)
India 18,831 18,761 3,276 42,456 51,170 88,795 69,302
2006 2007 2008 2009 2010 2011 2012
Source: KITA
www.icis.com
India emerges as key import market in Asia
• India has emerged as an important export destination in the past few
years
• Expected growth at 6% and above in the next few years, driven by
economic growth
• Net importer of toluene from southeast Asia, South Korea, the
Philippines, Thailand and Iran
• Net annual deficit of more than 150,000 tonnes. Key producer is
Reliance
www.icis.com
OUTLOOK
www.icis.com
Looking ahead…benzene
• Benzene prices may fall sharply in second-half 2012 as the US and EU markets
may correct
• Limited growth in downstream SM capacity, beyond China
• Demand from key downstream sectors like SM and phenol may remain weak on
poor economic conditions
• Supply in southeast Asia may rise if Exxon starts production and when TPPI
restart plant
www.icis.com
Looking ahead…toluene
• Toluene demand to remain key factor driving prices in Asia
• Demand from China to be affected by slow downstream solvents and blending
markets
• Imports into India could be affected due to currency-related losses
Asia Styrene Monomer: Key Trends and Outlook
Clive Ong
Senior Editor, ICIS Pricing
2012
www.icis.com
Asia SM in second half of 2012
•Sentiment in Q3 turning bullish on expectations of stronger demand from China
•Traditional manufacturing for exports season
•Kicking off from low base in Q2
•Weak global economic conditions resulting in continued stimulus by governments
•Overall demand to be slower than 2011 ?
www.icis.com
SM spot prices in first half of 2012
Source: ICIS
www.icis.com
SM inventories in east China 2012
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
0
200
400
600
800
1000
1200
1400
1600
Inventories Spot Price
Source: ICIS
www.icis.com
SM inventories in east China 2012
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
1250
1300
1350
1400
1450
1500
Inventories Spot Price
Source: ICIS
www.icis.com
SM inventories in east China 2011 vs 2012
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
Months
To
nn
es
2012 2011
Source: ICIS
www.icis.com
SM prices in 2011 vs 2012 Jan-Jun
1100
1200
1300
1400
1500
1600
2011 Price 2012 Price
Source: ICIS
www.icis.com
SM prices in 2007-2012
Spot Price 2007-2012
0
200
400
600
800
1000
1200
1400
1600
1800
1 14 27 40 53 66 79 92 105 118 131 144 157 170 183 196 209 222 235 248 261 274
Spot Price 2007-2012
Source: ICIS
www.icis.com
SM demand in 2011 vs 2012
0
100
200
300
400
500
600
700
800
Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec
2011 2012
Source: ICIS
www.icis.com
Styrenic Resins
• Downstream demand mostly weak for first half of 2012
• Key export destinations of Europe and the US facing weak economic conditions
• Slowing Chinese economic growth
• Elevated resins prices
• Low operating rates in China
www.icis.com
China ABS demand in 2011 vs 2012
0
50
100
150
200
250
300
350
400
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2011 2012
Source: ICIS
www.icis.com
China PS demand in 2011 vs 2012
0
50
100
150
200
250
300
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2011 2012
Source: ICIS
www.icis.com
China EPS demand in 2011 vs 2012
0
50
100
150
200
250
300
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2011 2012
Source: ICIS
www.icis.com
Macro-events
•The 2008 mortgage & financial crisis
• Governments and central banks intervene in their economies
•Liquidity flood and asset prices
•2011: End of Stimulus
•2012: More Stimulus?
www.icis.com
Crude futures from 2007 onwards
0
20
40
60
80
100
120
140
160
2007 2010
WTI Crude
2008 2011 2009
Japan Rate falls to 0.1%
Fed Funds Rate falls to 0.25%
UK Rate falls to 0.5%
ECB Rate falls to
1%
Japan Rate falls to
0%
QE1
QE Lite
QE2
Source: ICIS
www.icis.com
Government Intervention and Crude Oil
60
70
80
90
100
110
120
Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12
WTI Crude
End of QE2
Operation Twist II €1 T ESFS
Fed $500B swaps with
ECB
6 central banks $swaps
US keep low rates to 2014
UK raises QE to £325B
Fed/China supports EU bailout
Japan ¥1 T QE
Operation Twist
UK raises QE
to £375B Spanish bank bailout
Bank of Japan
negative rates
ECB cut rates to 0.75%
Source: ICIS
