WELCOME Asian Aromatics Market Outlook Webinar 01 August 2012 Hosted by ICIS
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Asia’s aromatics: Trends and directions Mahua Chakravarty Senior Editor, ICIS Pricing 2012
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
USD/tonne steady toluene 2011-2012 BTX margins held up by strong MX-PX chain & -200 -100 100 200 300 400 500 0 04/01/2008 04/04/2008 04/07/2008 04/10/2008 04/01/2009 BZ-Naphtha 04/04/2009 Naphtha to BTX spread 04/07/2009 04/10/2009 Source: ICIS 2008 to July 2012 04/01/2010 TOL-Naphtha 04/04/2010 04/07/2010 04/10/2010 04/01/2011 MX-Naphtha 04/04/2011 04/07/2011 04/10/2011 www.icis.com 04/01/2012 04/04/2012 04/07/2012
BTX margins up from 2011 on strong MX-PX chain & steady toluene 1400 250 226.6 1200 200 190.6 1000 154.12 151.1 150 800 134 600 100 400 50 200 0 0 2008 2009 2010 2011 2012 BTX Naphtha Spread www.icis.com Source: ICIS
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 Zhangzhou, China 240 Early Q3 2012 (Xiamen) Petrochina Sichuan Pengzhou, China 150 Late 2012- H1 2013 PC 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 Others Styrene Maleic Anhydride 4% 10% 12% Phenol 7% Cyclohexanone Aniline 46% 21% Styrene Cyclohexanone Aniline Phenol Maleic Anhydride Others Source: Chemease www.icis.com
China is a balanced market now 600,000 Tonnes 400,000 200,000 x 0 Jan-June 2007 2008 2009 2010 2011 2012 248,735 327,981 621,839 197,232 185,685 157,096 Imports 56,129 69,410 278,111 119,714 110,349 19,180 Exports Imports Exports 2 per. Mov. Avg. (Imports) Source: China Customs www.icis.com
Growth in new SM production slows down from 2012 Company Location Product Capacity Start-up status (tonnes/yr) 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 Zhejiang, China SM 600,000 2015 Taizhou Source: ICIS & Chemease www.icis.com
Rapid phenol expansions in 2012-14 maintain demand for benzene Company Location Product Capacity Start-up status (tonnes/yr) Kingboard Jiangsu, China Phenol 200,000 2012 Sinopec Beijing, China Phenol 137,500 2012-2013 Yanshan Sinopec Mitsui Caojing, China Phenol 250,000 2013 Shandong Shandong, Phenol 220,000 2013 Lihuayi China LG Chem South Korea Phenol 300,000 2013 FCFC Ningbo, China Phenol 300,000 2013-2014 Ineos Nanjing, China Phenol 400,000 2014 Zhangjiagang Changchun Jiangsu, China Phenol 200,000 2014 CEPSA Shanghai, Phenol 250,000 2014 China www.icis.com Source: ICIS & Chemease
Exporting to US remains key for Asia 2009 1% 21% 23% 2% 5% 23% 25% US Taiwan China Singapore Saudi Arabia Japan Netherland 2010 5% 3% 6% 2% 42% 12% 30% Source: KITA www.icis.com US Taiwan China Singapore Saudi Arabia Japan Netherland
South Korean exports to US rise in 2011-2012 2011 3% 8% 7% 0% 11% 47% 24% US Taiwan China Singapore Saudi Arabia Japan Netherland 2012 2% 6% 7% 9% 43% 8% Source: KITA 25% www.icis.com US Taiwan China Singapore Saudi Arabia Japan Netherland
South Korean exports to US regular in 2012 800,000 670,248 700,000 600,000 531,858 518,518 483,435 446,158 500,000 374,513 354,714 400,000 315,280 282,965 300,000 200,000 100,000 0 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 900,000 829337 790932 800,000 655090 700,000 567,136 600,000 Tonnes 500,000 444,637 400,000 273583 300,000 201900 200,000 100,000 0 2006 2007 2008 2009 2010 Jan-Nov Jan-April 2011 2012 Source: China Customs 2008-April 2012 Imports down in 2011 & 2012 on economic slowdown and cash flow issues www.icis.com
2012 imports fall although inventory dips 250000 200000 150000 100000 50000 0 Nov-09 Nov-10 Nov-11 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Mar-09 May-09 Sep-09 Mar-10 May-10 Sep-10 Mar-11 May-11 Sep-11 Mar-12 May-12 Source: Chemease East China inventory at historical high in 2010 www.icis.com
South Korea spreads its wings beyond China to southeast Asia and India 2011 Singapore Australia 3% US 2% 10% Vietnam Indonesia 3% 3% India China 11% 60% Japan 8% Source: KITA www.icis.com
India emerges as key export destination for South Korea, after China & Taiwan Jan-June 2012 1% 1% 1% 5% 3% 4% 10% 42% 12% 21% China Taiwan India US Indonesia Vietnam Japan Malaysia Philippines Singapore Source: KITA www.icis.com
South Korean supply finds outlet in southeast Asia 50,000 40,000 30,000 20,000 10,000 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 6,005 965 1,918 5 3,001 33,738 21,169 26,314 28,908 Indonesia 2,477 9,740 6,803 19,903 41,455 25,931 18,783 Vietnam Indonesia Vietnam 2 per. Mov. Avg. (Vietnam) 2 per. Mov. Avg. (Indonesia) Source: KITA www.icis.com
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