Asia Chemicals Outlook 2017 Webinar Series: OLEFINS AND POLYOLEFINS. 17 January 2017

Transcription

1 Asia Chemicals Outlook 2017 Webinar Series: OLEFINS AND POLYOLEFINS 17 January 2017 Watch the video herehttp://embed.vidyard.com/share/ah7nzzge81la2ibmgp Qdqe 1

2 Navigate your way through 2017 and beyond As we are about to wrap up 2016, ensure you have the data and insight you need to start planning for the coming year, and gain access to powerful tools that will help you and your business operate more effectively in Historical and current pricing data Real-time news service Supply and demand data China market intelligence Support your position during contract negotiations with access to regional spot or contract prices, published with commentaries on the latest trades, transactions and key market drivers. React quickly to market changes and developments by being the first to find out about breaking news and analysis across the global petrochemical markets. Our market-moving news articles cover production updates, plant capacities, output and shutdowns, plus so much more. We give you an end-to-end perspective across the global petrochemical and refinery supply chain, enabling you to grasp the local or regional scenario in a global context. Data includes import and export volumes, consumption, plant capacities, production and product trade flows from 1978 up to Anticipate where the China markets are headed and create robust production and investment activities with access to domestic supply/demand, import/export data, downstream analysis and a review of key issues and development within the country s unique petrochemical industry. Request a free sample report Request a free trial Request a demo Request a free sample report 2

3 Agenda Ethylene: Q Review and 2017 Outlook Propylene: Q Review and 2017 Outlook Asia & ME PE & PP: Q Review Asia & ME PE & PP: 2017 Outlook Summary 3

4 Ethylene 4

5 Ethylene prices, margins Naphtha prices Review - Q Asia ethylene spot prices 2016, $/tonne NE Asia naphtha-based ethylene margin 2016, $/tonne CFR NEA CFR SEA NEA ethylene margin CFR Japan naphtha prices CFR NEA ethylene prices 5

6 Outlook 2017 supply Lighter cracker turnaround schedule in Japan, S Korea production to grow, impact on exports likely minimal Japan s exports could stay close to low levels reached in Japan, S Korea C2 capacity losses due to cracker turnarounds ('000 tonnes) KPIC s cracker expansion to boost S Korea s exports in H China s merchant supply higher on start-up of Fund Energy s MTO plant SE Asia-NE Asia arbitrage may grow Healthy supply from Mideast, Europe, US Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec (Est) Asia ethylene projects, end Company Location C2 capacity addition ('000 tonnes/yr) Start-up schedule Reliance Jamnagar, India 1,500 (cracker), internally balanced Q KPIC Onsan, South Korea +330 to 800 (cracker), 150 surplus after expansion Mid 2017 Lotte Chemical Titan Pasir Gudang, Malaysia 90 (catalytic cracking unit), ships to existing PE plants in Indonesia H Fund (Changzhou) Energy & Chemical Jiangsu, China 165 (MTO), entirely for merchant sale, no C2 downstream plants End 2016 CNOOC and Shell Petrochemicals (CSPC) Guangdong, China 1,000 (cracker), internally balanced H

7 Outlook 2017 demand Japan to remain regular importer China imports could grow on new downstream projects, positive outlook for some derivative markets Standalone ethylene downstream projects in China, end Company Location Product Capacity addition ( 000 tonnes/yr) Start-up schedule Qingdao Haijing Shandong, China VCM/PVC/EDC 400/400/300 Abel Chemical Jiangsu, China SM 250 Qingdao Soda Ash Industrial Shandong, China SM 500 Total new ethylene demand:410 Trial runs at complex during late Q3-Nov 2016, started PVC sales in Dec Attained on-spec production in end-nov 2016, started sales in mid-dec Construction to complete in mid-2017, start up in Q3 Taiwan major turnaround at CPC s 720,000 tonne/year No 6 cracker from Feb-H1 Apr, ramp-up in operations of 2016 downstream projects likely to drive import demand higher Indonesia imports likely to increase Asia PE market uncertain in Q4 when low-cost PE exports from US start possible repercussions on cracker operations 7

8 Propylene 8

9 Spot price (USD) Review Q Price corrected in mid October as supply lengthened SE Asia tracking NE Asia losses in mid October SE Asia subdued in November as PP producers started turnarounds Uptrend in December in NE Asia supported by strong PP futures and limited spot cargoes due to contract negotiations Uptrend in December in SE Asia as demand increased from PP producers returning from turnarounds C3 Spot prices in Asia (Q3-Q4 2016) CFR NEA (USD) CFR SEA (USD) 9

10 kt Outlook 2017 supply Total expected losses from propylene production units (excluding crackers) until September 2017 at 92,800 tonnes NE Asia production losses due to turnarounds Japan s exports likely to stay at same levels year on year South Korea may see exports climb Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2016/17 Production losses 2016 Production losses 2017 Asia propylene projects, end Company Location Facility C3 capacity addition ('000 tonnes/yr) Start-up schedule Downstream ( 000 tonnes/yr) Meide Fujian, China PDH 660 End PP Fund (Changzhou) Energy & Started on 25 Chemical Changzhou, China MTO 165 Dec PP Started on 26 Jiangsu Sailboat Jiangsu, China MTO 460 Dec ACN 10

11 Outlook 2017 demand China to continue to import propylene despite new start-ups in recent months Acrylic acid (AA) saw improving margins in Q and import demand is expected to be bullish due to limited supply from China and Europe Propylene oxide (PO) saw healthy margins in Q but Q outlook uncertain. Demand in Q1 may weaken as Lunar New Year holiday approaches Acrylonitrile (ACN) outlook healthy as producers have upcoming turnarounds. Spot prices expected to be supported, especially after Lunar New Year holiday New standalone propylene downstream plants in China Shandong Luxi (2-EH) 300,000 tonne/yr March 2017 Shandong Haili (ACN) 260,000 tonne/yr End 2017 to 2018 Jinling Huntsman New Materials (PO) 240,000 tonne/yr June to July

12 Polyethylene & Polypropylene 12

13 China, SEA PE Review Q China s LLDPE and LDPE prices shot up after Golden Week holiday in October amid restocking activities and tighter supply LLDPE spot prices ($/tonne) China s prices fell in Nov to mid-dec amid availability of competitively priced cargoes from US and India and sharp falls in LLDPE futures market Relatively weak demand in SEA capped prices in Q Volatile SEA currencies and policies exerted pressure on prices LDPE spot prices ($/tonne) SEA (D) SEA (ND) China 13

14 China, SEA PP Flat Yarn Review Q Prices in China overtook prices in SEA twice in Q Redirection of spot allocations from SEA to China due to better netback Physical spot prices in China impacted by speculative buying and selling in futures market Import trade in SEA hampered by devaluation of regional currencies Asia PP Flat Yarn Spot Prices 2016 CFR China (USD) CFR SEA Dutiable (USD) CFR SEA Non-dutiable (USD) 14

15 China, SEA PP Block Co-Polymer Review Q Block co-polymer prices relatively more stable compared to homo-polymer Balanced demand and supply fundamentals Widening gap between dutiable and non-dutiable prices due to limited supply of ASEAN cargoes Asia PP Block Co-Polymer spot prices 2016 CFR China (USD) CFR SEA Dutiable (USD) CFR SEA Non-dutiable (USD) 15

16 India PE, PP Review Q Demand hit by demonetisation move in November Poor retail sales, currency crunch Construction sector hit LLDPE film imports (Apr-Sep) down 25% GAIL Pata 2 startup in March Q4* demand prospects brightened on low stocks Market geared up for new domestic supply (Apr-Sep) Indian PE imports ( 000 tonnes) (Apr-Sep) HDPE film LLDPE film LDPE film Indian PP imports ( 000 tonnes) PP copolymers PP homopolymers * Pertains to Indian fiscal year Source: Indian Commerce Ministry 16

17 India PE, PP Review Q LDPE film prices improved on limited domestic supply HDPE, LLDPE dampened by ample domestic availability Price discounts PP prices saw limited upward movement End-user demand hit by currency crunch Indian import influenced by import parity of domestic product Import prices ($/tonne CFR India) HDPE film LDPE film LLDPE film India PP import prices PP film CFR India PP raffia CFR India 17

18 Middle East Review Q Price takers, not price makers Lacklustre downstream demand in GCC Political instability in the East Med Finished product exports from Jordan weak Reduced need to restock Ample regional availability Middle East PE prices HDPE film CFR GCC LLDPE film CFR GCC HDPE film CFR East Med LLDPE film CFR East Med Middle Middle East East PP PP raffia prices prices CFR GCC CFR East Med * Arrived at after deducting domestic freight and other charges from DELIVERED prices 18

19 PE Outlook 2017 supply Import prices likely under pressure in 2017 on increased supply Additional capacity from US shale gas projects, CTO projects and India China prices due for correction, SEA prices to catch up with China China continues to be the main Asia market Company, Location PE Capacity ( 000 tonnes/yr) Zhongtian Hechuang Energy, Inner Mongolia Zhong an Lianhe Coal Chemical, Anhui China Start-up schedule CTO LDPE: CTO HDPE/LLDPE: Qinghai Mining, China CTO HDPE/LLDPE: Jiutai Energy, Inner Mongolia CTO HDPE/LLDPE: CNOOC Huizhou, Guangdong China Qinghai Damei Coal Industry, China Naptha-C2 HDPE & LLDPE: Q CTO HDPE/LLDPE: Shenhua Ningxia, China CTO HDPE/LLDPE: Company, Location PE Capacity ( 000 tonnes/yr) Start-up schedule Sadara*, Saudi Arabia 1,100 Q4 2016/2017 Nova, Canada 450 Q Dow Chemical, US Sasol, US Chevron Phillips, US 1, Opal, India 1,060 H Reliance, India 1,000 H *Sadara cracker is currently shut for planned maintenance for 6 weeks from 28 Dec

20 PP Outlook 2017 supply Supply in Q1 expected to be tight due to maintenance turnarounds in SEA Expansions across Asia in 2017: Company; Location PP capacity additions ('000 tonnes/yr) Opal; Dahej, India 340 H Integrated Refinery and Petrochemical Co (IRPC); Map Ta Phut, Thailand Start-up schedule 300 Mid-2017 Shenhua Ningxia Coal Group Co; Ningxia, China CTO PP: CNOOC and Shell Petrochemicals Company Limited (CSPC); Guangdong, China Fujian Zhongjiang Petrochemical Co., Ltd; Fujian, China Naphtha cracking PP: PDH PP:

21 PE, PP Outlook 2017 demand Relatively weak demand expected to exert pressure on Asian prices Dampened buying appetite in China; diversion of cargoes to SEA China expected to continue to have ample supply in 2017 Improved demand in India in January 2017; limited change in Middle East demand Net importers such as Indonesia and Vietnam continue to drive import demand in SEA Economic Growth Projections (annual % change) Country (estimate) China Indonesia Vietnam Developing East Asia World Source: World Bank China demand-supply balance ( 000 tonnes) PE Demand PE Supply PP Demand PP Supply (estimate) 2017 (estimate) 21

22 Summary 22

23 Summary Ethylene market to see continued strong inflows from outside Asia, increased production in Japan, S Korea Tightness in propylene supply expected in February to March in both NE and SE Asia spot prices to be supported Import PE/PP prices in China to set price direction in SEA; growing global capacities might put pressure on PE/PP import prices 23

24 Navigate your way through 2017 and beyond As we are about to wrap up 2016, ensure you have the data and insight you need to start planning for the coming year, and gain access to powerful tools that will help you and your business operate more effectively in Historical and current pricing data Real-time news service Supply and demand data China market intelligence Support your position during contract negotiations with access to regional spot or contract prices, published with commentaries on the latest trades, transactions and key market drivers. React quickly to market changes and developments by being the first to find out about breaking news and analysis across the global petrochemical markets. Our market-moving news articles cover production updates, plant capacities, output and shutdowns, plus so much more. We give you an end-to-end perspective across the global petrochemical and refinery supply chain, enabling you to grasp the local or regional scenario in a global context. Data includes import and export volumes, consumption, plant capacities, production and product trade flows from 1978 up to Anticipate where the China markets are headed and create robust production and investment activities with access to domestic supply/demand, import/export data, downstream analysis and a review of key issues and development within the country s unique petrochemical industry. Request a free sample report Request a free trial Request a demo Request a free sample report 25