Economy > Energy > Feedstocks & Polymer Markets

Transcription

1 Economy > Energy > Feedstocks & Polymer Markets Howard Rappaport Global Business Director Plastics SPE ABC October, 2009 Singapore Shanghai SPE Houston - ABC New -York October, London 2009 Düsseldorf Dubai

2 CMAI - A Global Organization Of Over 150 Full -Time Associates New York HOUSTON Dusseldorf LONDON Dubai Shanghai SINGAPORE

3 We consult to a broad base of leading organizations spanning through and across multiple value chains

4 What Drives Polymer Prices? Any of these factors can, and will influence price Cost / Feedstocks Raw Material Prices Operating Costs Supply/Demand Economy Utilization Rates Loss of Available Capacity (outages) Inventory Trends (resin, finished goods, etc.) Exports / Imports Other Dynamics Perception / Anticipation of New Capacity Desire for Market Share Prices of Competitive Materials Market Leadership Market Momentum Natural Disasters / Political Turmoil

5 Global Plastics Consumption 2009

6 Plastics Compete with Other Plastics & Traditional Materials PET PS Wood LL/LDPE Glass Paper PP Aluminum PVC ABS Concrete Steel HDPE

7 Volatile Energy Prices Impact The Chain Consumers Retail Non- Durables Energy Base Chemicals Plastics Energy Price Fluctuations

8 ECONOMY & ENERGY

9 Reality Check- Consumer When the Consumer stops Compounds Retail Finished Goods Petrochems it all grinds to a halt! Energy

10 Economic Growth Comparison Percent (%) Change 8.0 Forecast World N. America S. America W. Europe SE Asia NE Asia

11 Positive Factors Low Inflation Business & Consumer Expectations Financial & Monetary Policies Government Rescue & Spending Low Consumer & Business Spending Reduced Capital & Foreign Investment Higher Crude Oil Prices Geopolitics Risks & Threats

12 Percent (%) Year/Year Change 20.0 Industrial Production China Japan U.S. Brazil India S. Korea EU Russia Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 09 Feb Mar Apr May Jun Jul

13 Percent (%) 8.0 U.S. GDP Growth Source: U.S. Bureau of Census; Forecast: CMAI

14 Energy Overview

15 Energy Crude Oil Feedstocks Petrochemicals Ethylene Propylene Refinery Gas Separation Unit Natural Gas Naphtha Gas Oil Ethane Propane Butanes Field Condensates Ethylene Unit Fuel Oil Methane/Hydrogen Crude C 4 Butadiene Mixed Butylenes Pygas Benzene Toluene/Xylene Heavy Aromatics C 5 /C 6 Non Aromatics Olefins Flow Diagram

16

17 Gas Liquids Cents Per Gallon Natural Gas $/ MMBtu

18

19 Ethylene & Polyethylene

20 Basic Ethylene Flow Chart Feedstocks Propylene Crude Oil Refinery Naphthas Gas Oils Butadiene Butylenes BTX (pygas) Natural Gas Gas Separation Unit Ethane Propane Butanes F i e l d Condensates Steam Cracker Ethylene Heavy Aromatics Methane Hydrogen Fuel Oil

21

22

23 Forecast

24 U.S. Daily Ethylene Cash Costs U.S. Daily Ethylene Cash Costs Dollars Per Metric Ton

25 Middle East Ethylene Capacity Additions

26 Forecast

27 U.S. Ethylene Conclusions Oversupply and weak demand result in a long market Olefins markets clearly in the trough, margins squeezed Heavy feed crackers challenged by crude oil prices vs. natural gas North America ethylene derivative exports supported by favorable crude-to-gas to-gas ratio Significant capacity reductions are inevitable

28 Production Imports Total Supply Domestic Sales Exports (est.) Total Sales Operating Rate Inventory change MMLBS PE: Industry Performance U.S. and Canada, Percent Change YTD July 2009 vs. YTD July 2008 LDPE LLDPE HDPE Total PE

29 PE Demand Year Over Year U.S./Canada Polyethylene Demand Percent Change, Year over Year %AAGR %AAGR End Use '04-'09 '09 '09-'14 '14 Film & Sheet Injection Molding Pipe & Profile Extrusion Coating Blow Molding Wire & Cable Rotomolding Domestic Demand

30

31

32 Still Too Much Capacity

33 Global Producer Market Share Top Global PE Producers 2008 Capacity% Capacity Company (-000- MT) Share Dow Chemical 7, Company ExxonMobil Top Global PE Producers 2013 Capacity (-000- MT) 8,913 % Capacity Share 8.47 ExxonMobil 7, Dow Chemical 8, LyondellBasell 5, SABIC 6, SABIC 4, LyondellBasell 5, Chevron Phillips 3, PetroChina 5, Total 27, Total 35,

34 North America PE Chain Margins Forecast

35 PE Take-Aways PE prices less volatile through 2010 than in recent past. YTD margins stronger than expected due to robust exports, capacity shutdowns / turndowns and unusual producer market / production discipline NAM PE cost advantage strong vs other regions ex. MDE Despite delays and shutdowns, unprecedented oversupply conditions will drive down operating rates and margins beginning 4Q 09. The cycle trough is expected from 4Q , global recovery evident by 2011

36 Propylene & Polypropylene

37 Propylene & PP Key Points Propylene industry in transition; moving from by-product to own product Propylene & PP no longer cheap; must compete based on features rather than prices Oversupply expected in the next few years; same issues to be faced as in the ethylene/pe industry However, no region enjoys a marked cost advantage versus others. Trade to become very competitive Asian imports saved the first half of the year for producers; as new projects start up in second half of the year, market to move to oversupply Prices to be sustained by higher energy

38 Propylene Supply Sources Crude Oil Motor Gasoline Crude Unit Gas Oil Motor Gasoline FCC Unit Isobutane Alkylation Unit High Octane Alkylate Gasoline Other Fuel Uses Refining Industry Chemical Industry Naphtha RG Propylen e Market Ethane Propane Propane Dehydro Metathesis Olefin Cracking HSFCC Gas-to to-olefins Others Steam Cracker or Olefin Plant Other Technologies Cumene, Oligomers Isopropanol Purification Splitter Unit Propane to LPG Ethylene & Olefins PG & CG Propylene Markets Polypropylene Unit Other propylene consumers: acrylonitrile, propylene oxide, acrylic acid, oxo-alcohols Injection Molding, Fibers, Films

39 Shrinking Gasoline Demand?

40 Cents Per Pound

41

42 PET

43 Petrochemicals have to buy away feedstocks from gasoline and heating fuels Octane Crude Oil Naphtha Gas Oil Ethane Propane Butane Refinery Butane Hydrogen Reformer Reformate Steam Cracker BTX BTX Extraction XYLENES Propylene/PP TOLUENE BENZENE o-xylene m-xylene p-xylene PTA/DMT PIA ETHYLBENZENE/ STYRENE POLYETHYLENES PET Natural Gas Gas Separation Unit Methane Heating Fuel Ethylene ETHYLENE DICHLORIDE/ PVC ETHYLENE GLYCOL

44 Raw Material Utilization Per Unit of PET 0.58 Acetic Acid 0.86 Paraxylene (PX) + O 2 Terephthalic Acid (PTA) 0.22 Ethylene + O Ethylene + 2 Oxide (EO) H 2 O + Ethylene Glycol (MEG or EG) 0.36 Polyethylene Terephthalate (PET) + H 2 O Isophthalic Acid

45

46

47

48

49

50 Upcoming CMAI Plastics Events 2009 Plastics Processors Conference - US September 28-29, 29, 2009 Chicago Marriott Downtown Chicago, IL USA 2009 Plastics Processors Conference - Europe November 11-12, 12, 2009 Intercontinental Hotel Düsseldorf, Germany More information at