Asia Olefins & Aromatics Market Review and Outlook 2014.pdf
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16 May 2014 PEACH Hall, Pattaya, Thailand General Matter and Raw Materials Committee, Asia Petrochemical Industry Conference (APIC) 2014 Asia Olefins & Aromatics Market Review and Outlook Peh Soo Hwee and Ong Sheau Ling
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Transcript of Asia Olefins & Aromatics Market Review and Outlook 2014.pdf
16 May 2014
PEACH Hall, Pattaya, Thailand
General Matter and Raw Materials Committee,
Asia Petrochemical Industry Conference (APIC)
2014 Asia Olefins & Aromatics Market
Review and Outlook
Peh Soo Hwee and Ong Sheau Ling
www.icis.com
Agenda
Asia ethylene and propylene price trends Jan-May 2014
Factors shaping the outlook for the Asia olefins markets
Challenges ahead for cracker operators in Asia
www.icis.com
Asia olefins price trends from Jan-early May 2014
Highest since Aug
2008
Near 10-mth low
Source: ICIS
• NE Asia C2 at multi-
year high in Jan’14
as tight supply
offset soft Chinese
derivative demand
• C3 down in Q1’14,
hurt by ample
supply, slowdown in
end-user demand in
China
www.icis.com
Drivers behind Asia Olefins Market Outlook
Three main areas:
Upstream naphtha costs and impact on C2 margins
Supply side factors
Demand side factors
www.icis.com
Short-term NE Asia ethylene margins
www.icis.com
Short-term SE Asia ethylene margins
www.icis.com
Drivers behind Asia Olefins Market Outlook
Three main areas:
Upstream naphtha costs
Supply side factors
Demand side factors
www.icis.com
2013 World Ethylene Production
Source: ICIS Consulting
NE Asia capacity growth driven by MTO, cracker projects in China; some
capacity losses in Japan
www.icis.com Source: ICIS Consulting
NE Asia capacity growth to be driven by PDH projects in China
2013 World Propylene Production
www.icis.com
At least 20 Asian crackers will be shut for maintenance in 2014, mostly in H1
www.icis.com
2014 Asia propylene plant turnaround schedule
Month Company Location C3 unit Capacity Turnaround dates
Feb PTTGC Map Ta Phut, Thailand PDH 100,000 9 Feb to week of 24 Mar
Taekwang Industrial Ulsan, South Korea PDH 300,000 12 Feb to 10 Mar
JX Nippon Oil & Energy Marifu, Japan FCC 50,000 20 Feb to 1 Apr
Mar JX Nippon Oil & Energy Mizushima, Japan FCC (B) 90,000 20 Mar to 19 May
JX Nippon Oil & Energy Kawasaki, Japan OCU 140,000 25 Mar for around 50 days
FPCC Mailiao, Taiwan No 1 RFCC 375,000 29 Mar to early Jul
FPCC Mailiao, Taiwan OCU 250,000 27 Mar to end-May
Apr GS Caltex Yeosu, South Korea FCC 250,000 Mid-Apr to 10 May
May SK Energy Ulsan, South Korea FCC No 1 150,000 21 May to mid-Jul
Source: Industry
Supply from Japan, Taiwan and South Korea in Q2 ’14 likely
constrained by several maintenance shutdowns
www.icis.com
Cracker projects in Asia & Middle East 2013-2016
Source: Industry
Over 15m tonnes of new cracker capacities coming on stream in Asia & Mideast
www.icis.com
MTO/MTP projects in China 2013-2015
Source: Industry
Company Location C2 (‘000 t/yr) C3 (‘000 t/yr) Start up schedule
Ningbo Heyuan Chemical Zhenhai, Zhejiang province 200 400 Feb 2013
Wison (Nanjing) Clean Energy Nanjing, Jiangsu province 135 160 Sept 2013
Yunlin Energy Chemical Co Yulin, Shaanxi province 300 300 Q2 2014
Shenhua Ningxia Coal Industry Ningdong, Ningxia province 500 Jun 2014
Shandong Shenda Chemical Co Tenzhou, Shandong province 200 200 Q3 2014
Shandong Yangmei Hengtong Chemical Linyi, Shandong province 120 180 Sept 2014
Pucheng Clean Energy Chemical Pucheng, Shaanxi province 300 400 Dec 2014
Zhengda (Changzhou) New Material Changzhou, Jiangsu province 165 165 End-2014
Qinghai Salt Lake Industry Golmud, Qinghai province 160 170 Q4 2014
Ningxia Baofeng Energy Group Co Ningdong, Ningxia province 300 300 Q4 2014
Zhejiang Xingxing New Energy Technology Jiaxing, Zhejiang province 300 300 Q1 2015
Shanxi Coking (Group) Co Hongdong, Shaanxi province 300 300 Q2 2015
Mengda New Energy Chemical Base Development Co Erdos, Inner Mongolia 300 300 Q2 2015
Shaanxi Shenmu Chemical Shenmu, Shaanxi province 300 300 Q4 2015
XinAo Group Erdos, Inner Mongolia 300 300 Q4 2015
Coal-based methanol to be an important alternative feedstock to naphtha; 15 projects to start up during
2013-2015
www.icis.com
Propylene projects in Asia 2013-2016
Source: Industry
Company Location Facility Completion schedule (C3 capacity in '000
tonnes/yr)
2013 2014 2015 2016
Tianjin Bohai Chemical Industry Group Tianjin, China PDH 600
Ningbo Haiyue New Materials Co Ningbo, Zhejiang province, China PDH 600 (mid-H2)
Zhejiang Satellite Energy Co Pinghu, Zhejiang province, China PDH 450 (mid-H2)
Shaoxing Sanyuan Petrochemical Shaoxing, Zhejiang province, China PDH 450 (mid-H2)
Yantai Wanhua Group Yantai, Shandong province, China PDH 750 (year-
end)
Zhangjiagang Yangzijiang Petrochemical Zhangjiagang, Jiangsu province, China PDH 600 (year-
end) 600
Haiwei Group Hengshui, Hebei province, China PDH 500
Fujian Meide Petrochemical Fuqing, Fujian province, China PDH 660
SK Gas /Advanced Petrochemical Ulsan, South Korea PDH 600
Hyosung Petrochemical Ulsan, South Korea PDH 300
Pertamina Cilcap, Indonesia RFCC 115
Pertamina Balongan, Indonesia ROPP 178
GS Caltex Yeosu, South Korea RFCC 250
Asia’s C3 capacity growth to be driven by PDH projects in China; up to 2.85m tonnes/year to
start up in 2014
www.icis.com
Drivers behind Asia Olefins Market Outlook
Three main areas:
Upstream naphtha costs
Supply side factors
Demand side factors
www.icis.com
2013 World Ethylene Consumption
Source: ICIS Consulting
NE Asia made up 26% of global demand totalling 133.78m tonnes in
2013, driven by strong downstream expansions in China
www.icis.com
Source: ICIS Consulting
Backed by strong downstream growth in China, NE Asia made up 38% of global
demand totalling 85.71m tonnes in 2013
2013 World Propylene Consumption
www.icis.com
China PE/PP capacity to grow at slower pace from 2015
10,000 tonnes/yr
0
500
1,000
1,500
2,000
2,500
2013 2014 2015 2016 2017
LDPE HDPE LLDPE PE PP Granule
Source: ICIS Chemease
www.icis.com
Ethylene downstream projects 2014-2015
Source: Industry
Company Location Product Capacity (‘000 tonnes/yr) Start up schedule
Samsung Total Daesan, South Korea EVA/LDPE 240 Feb 2014
USI Corp Kaohsiung, Taiwan EVA/LDPE 2x45 Q4 2015
FPC Ningbo, Zhejiang province, China EVA 72 (first phase) Q4 2014
Saudi International Petrochemical Jubail Industrial City, Saudi Arabia EVA/LDPE 200 Apr 2014
SK Global Chemical Ulsan, South Korea MLLDPE/elastomer
/plastomer 230 (MLLDPE) May 2014
SK Global Chemical Ulsan, South Korea SM 300 Apr 2014
Abel Chemical Taixing, Jiangsu province, China SM 500 End 2014
Shandong Yuhuang Chemical Heze, Shandong province, China SM 200 End 2014
Shandong Dongming Petrochemical Heze, Shandong province, China SM 100 End 2014
Leasty Chemical Jiangyin, Jiangsu province, China SM 500 2015
Oxiranchem Yangzhou Yangzhou, Jiangsu province, China EO 200 Q4 2014/Q1 2015
Jiangsu Jurong Chemical Taixing, Jiangsu province, China EO 200 End-2015
Korea Petrochemical Industry Onsan, South Korea EO/EG 200 (EG) Oct 2014
Sanjiang Fine Chemicals Jiaxing, Zhejiang province, China EO/EG 380 Early 2015
PT Asahimas Chemical Cilegon, Baten province, Indonesia PVC 250 End 2015
Ningxia Younglight Energy Chemical Yinchuan, Ningxia province VAM 450 Q2 2014
Exports from South Korea to fall from 2014 due to new domestic downstream
capacity
www.icis.com
Propylene downstream projects 2014-2015
Source: Industry
Company Location Product Capacity
(‘000 tonnes/yr)
Start up schedule
Chang Chun Petrochemical Panjin, Liaoning province, China ECH 48 2014
Kingboard Chemical Huizhou, Guangdong province,
China Phenol/acetone 75/45 Q2 2014
Formosa Chemicals & Fibre Corp (FCFC)
Ningbo, Zhejiang province, China Phenol/acetone 300/180 Early Q4 2014
Kumho Yeosu, South China Phenol/acetone 300/180 H2 2015
PTT Phenol Map Tap Phut, Thailand Phenol/acetone 250/155 Q4 2015
Wanzhou Petrochemical Nantong, Jiangsu province, China AA 160 Q2 2014 (phase 1)
BASF-YPC Nanjing, Jiangsu province, China AA 160 Q2 2014
Zhejiang Satellite Pinghu, Zhejiang province AA 320 H1 2014 (phase 1 started up in Q1)
Jiangsu Sanmu Taixing, Jiangsu province, China AA 160 Mid-H2 2014
Formosa Plastics Corp (FPC) Ningbo, Zhejiang province, China AA 160 Q3 2014
Jiangsu Jurong Chemical Taixing, Jiangsu province, China AA 160 Q4 2014/Q12015
Shanghai Huayi Shanghai, China AA 320 Partial start up in 2015
Yantai Wanhua Yantai, Shandong province, China AA 300 Q4 2014
Nippon Shokubai Himeiji, Japan AA 80 H2 2014
Showa Denko/Toa Gosei Oita, Japan AA 80 Q2 2014
Jishen Chemical Jilin, Jinlin province, China PO 300 One of three lines started up in Q1 2014
Shandong Sanyue Chemical Binzhou, Shandong province PO 80 Q2 2014
Yantai Wanhua Yantai, Shandong province, China PO 240 End 2014/early 2015
Nanjing Jinling Huntsman New Materials
Nanjing, Jiangsu province, China PO 240 2015
Luxi Petrochemical Liaocheng, Shandong province,
China 2-EH 150 2014
China’s C3 downstream markets to see continued strong expansion, particularly in
acrylic acid (AA) and phenol sectors
www.icis.com
Asia cracker operators face challenging 2014
• Heavy turnaround season in Asia and a structurally tighter balance
in South Korea could continue to lend support to olefins markets
• In the longer term, new olefin capacities balanced somewhat by
demand from China, South Korea
• Downstream markets in China face uncertainty amid a weak
economic climate
• More olefins and downstream projects may face delays
• Volatility in upstream naphtha and crude markets as well as the
global economic outlook to weigh on olefins and derivatives
www.icis.com
BENZENE
• 2013-Q1 2014 market review
• Asia’s supply-demand balance in 2011-2016
• Benzene and derivatives plant operating rates in 2011-2016
• Shift of trade flow for South Korean and Japanese origins heading to either the US
or China
TOLUENE
• 2013-Q1 2014 market review
• Toluene and paraxylene (PX) correlation, and TDP margins
• China – largest Asian market’s supply-demand balance 2011-2014
• Relationship between the Chinese shore tank inventories, import volumes and
consumption
Market outlook – price trend, trade flow changes
Agenda
www.icis.com
BENZENE (BZ)
US
EU
China
South
Korea
Japan
ME
Net exporters: South Korea, Japan, Thailand, India, Iran
Net importers: China, Taiwan, Singapore, Indonesia, GCC
*Figures for the year of 2013
Thailand
Singapore
Taiwan
Import: 885kt
Export: 31kt
Source: customs, KITA, IE Singapore
Import: 464kt
Export: 68kt
Import: 54kt
Export: 1.395m t
Import:
121kt
Export:
767kt
Import: 709kt India
Import (Japan,
South Korean
origins): 640kt
Import (South Korean
origin): 102kt
www.icis.com
1000
1100
1200
1300
1400
1500
1600
1700
US
D/t
on
ne
Europe - CIF ARA US - FOB USG Asia - FOB Korea
Asia’s BZ hit a 45-week high in mid-Jan and
plunged to a four-month low in mid-Mar
Source: ICIS
Four-month low on heavy SM
and phenol turnarounds and
weakening US prices on hefty
import arrivals
45-week high, tracking higher US, EU
prices on wide Asia-US arbitrage,
absence of Chinese import window
Uptrend on firm crude,
escalating SM prices
Falling US
prices
Historical peak
in end 2012
Brief recovery
on arbitrage
to both US
and EU, but
slipped
shortly after
11-week low on closed
Asia-US arbitrage and
Chinese import window
Boxed
range
Dive in
global
prices
on weak
demand
www.icis.com
0
2
4
6
8
10
12
0
5
10
15
20
25
30
35
2011 2012 2013 2014 (E) 2015 (E) 2016 (E)
Na
me
pla
te c
ap
ac
ity (
m t
on
ne
s/y
ea
r)
Indonesia
Malaysia
India
Singapore
Thailand
Taiwan
S Korea
Japan
China
Growth (%)
Asia’s BZ capacity above 31m tonnes in 2014;
China, South Korea, Japan at 75% of total
Source: market
An
nu
al g
row
th ra
te (%
)
*exclude
China’s coal-based
BZ capacities in
2011-2012: 4.5-5m t/a
2013-2016: 5.5-6m t/a
www.icis.com
Asia & Mideast new BZ capacities at 2.805m
tonnes in 2014 Company Location Benzene (kt/year) Scheduled date
Sinopec Hainan Yangpu, China 150 Trial run on 9 Dec 2013, 27 Dec 2013
on-spec, 2 Jan 80-90%
Qingdao Lidong Qingdao, China 30 (expansion) End-Jan 2014
PetroChina Sichuan, China 370 12 Mar 2014
Saudi Aramco Total Refining and
Petrochemical (Satorp) Al Jubail, KSA 140 Mid-Mar 2014 (first cargo)
Sinochem Quanzhou, China 150 End Apr 2014
ONGC Mangalore Petrochemical
Ltd (OMPL) Mangalore, India 270 End Jun or Jul 2014 (first cargo)
Ulsan Aromatics Ulsan, South Korea 540 1st week June 2014 (first cargo)
Jurong Aromatics Corp (JAC) Jurong Island,
Singapore 400 H2 July 2014 (first cargo)
Samsung Total Daesan, South Korea 450 1st week Jul 2014 (first cargo)
SKGC Incheon, South Korea 455 1st week Jul 2014 (first cargo)
Zhongjin Ningbo, China 400 2015
Reliance Industries Ltd (RIL) Jamnagar, India 500 H2 2015
Petro Rabigh II Rabigh, KSA 170 End 2015 - H1 2016
Saudi Aramco Ras Tanura, KSA 285 2016
GS/Shell/Taiyo Yeosu, South Korea 100 2016-2017
Saudi Aramco Jazan, KSA 85 2017 Source: Industry sources
www.icis.com
55%
15%
10%
11% 5% 4%
51%
16%
12%
11%
6% 4%
50%
17%
12%
11%
6% 4%
49%
17%
12%
13%
6% 3%
0
10
20
30
40
50
60
70
80
90
100
0
2
4
6
8
10
12
14
16
18
20
2013 2014 (E) 2015 (E) 2016 (E)0
20
40
60
80
100
120
0
2
4
6
8
10
12
14
16
18
20
2013 2014 (E) 2015 (E) 2016 (E)
Half of Asia’s BZ used in SM, followed by phenol;
Downstream average operating rates to slip
Source: market
2013
at 30.9m
tonnes
2016 at 36.75m
tonnes
<d
ow
nstre
am
op
era
ting
rate
s>
(%) N
am
ep
late
ca
pa
cit
y (
m t
on
ne
s/y
ea
r)
0
10
20
30
40
50
60
70
80
90
100
0
2
4
6
8
10
12
14
16
18
20
2013 2014 (E) 2015 (E) 2016 (E)
www.icis.com
82
83
84
85
86
87
88
89
90
91
92
0
5
10
15
20
25
30
2011 2012 2013 2014 (E) 2015 (E) 2016 (E)
(m t
on
ne
s/y
ea
r)
Production Demand (from 6 downstreams) <BZ run rates>
Asia’s BZ production to outstrip demand, despite
estimated exports at 1.4m-1.5m t/year in 2014-2016
Source: market
<o
pe
ratin
g ra
tes
> (%
)
*inclusive of
China’s
coal-based
BZ
production
in
2011-2012:
1.5-1.6m t/a
2013-2016:
2m t/a
*run rates at
around 50%
80
81
82
83
84
85
86
87
88
89
90
0
5
10
15
20
25
30
2011 2012 2013 2014 (E) 2015 (E) 2016 (E)
(m t
on
ne
s/y
ea
r)
Production Demand (from 6 downstreams) <BZ run rates>
exports
excess production
• BZ demand from vast downstream capacity additions in 2014-2016 is estimated to be
reduced by lower average run rates of 71.5-72.8% < 2011-2013’s level at 74.7-77.3%.
• High BZ run rates at 86-87.5% is estimated for 2014-2016 > 2011-2013’s level of 84-86%.
• Supply will outstrip demand in 2014-2016, despite an estimated Asia’s overall exports
staying at 1.4m-1.5 m tonnes/year . In 2011-2013, Asia BZ is balanced by exports at 1m-1.2 m
tonnes/year.
www.icis.com
0
100
200
300
400
500
600
0
200
400
600
800
1000
1200
1400
1600
1800
US
D/t
on
ne
BZ- Naphtha spread BZ FOB Korea Naphtha CFR Japan
Asia’s BZ-naphtha spread to hover at around
$270-300/tonne for H2 2014
Source: ICIS
Pric
e d
iffere
nce (U
SD
/ton
ne)
Ave~ $186/t Ave~ $160/t
Ave~ $257/t
Ave~ $371/t
Breakeven level
www.icis.com
-50
0
50
100
150
200
250
300
350
0
20000
40000
60000
80000
100000
120000
140000
ton
ne
s/m
on
th
FOB Korea-US Gulf price gap South Korea Japan
S Korea, Japan’s BZ exports to the US resume
in 2014; volumes peaked in Apr 2014
Source: customs, ICIS
US
D/to
nn
e
~ 761kt/a, 63.4kt/mth
~ 636kt/a, 53.0kt/mth
Breakeven level
www.icis.com
0
200
400
600
800
1000
1200
1400
1600
0
20000
40000
60000
80000
100000
120000
140000J
an
-12
Ma
r-1
2
May-1
2
Ju
l-1
2
Se
p-1
2
No
v-1
2
Ja
n-1
3
Ma
r-1
3
Ma
y-1
3
Ju
l-1
3
Se
p-1
3
No
v-1
3
Ja
n-1
4
Mar-
14
ton
ne
s/m
on
th
Others (Philippines,Indonesia, Turkey)
Middle East
India
Singapore
Thailand
Malaysia
Taiwan
Japan
South Korea
FOB Korea
Equivalent import parityfrom east China ex-tank
China BZ imports sharply declined into 2014 on
lower-priced domestic lots
Source: China customs
~438kt/a, 36.5kt/mth ~885kt/a, 73.8kt/mth
US
D/to
nn
e
www.icis.com
TOLUENE (TOL)
US
EU
Net exporters: South Korea, Japan, Singapore, Thailand, Taiwan
Net importers: China,, India, Indonesia, Vietnam, GCC
*Figures for the year of 2013
China ME
South
Korea
Singapore
Japan
Thailand India
Africa
US
Import (Japan,
South Korean
origins: 126kt
US exports to
Japan, South
Korea, Taiwan,
China: 41.5kt
Import: 812kt
Export: 0.8kt
Taiwan
Import: 21kt
Export: 327kt
Import: 69kt
Export: 327kt
Source: customs, KITA, IE Singapore, industry sources
Import
(Kandla port):
174kt
Import: 24kt
Export: 325kt
Import: 105kt
Export: 1.063m t
www.icis.com
0
50
100
150
200
250
300
350
400
450
500
0
200
400
600
800
1000
1200
1400
1600
1800
2000
US
D/t
on
ne
TDP spread (average of PX-TOL and BZ-TOL) TOL FOB Korea PX CFR China
Asia’s TOL tracks downstream PX closely in 2014;
TDP run rates cut from Mar 2014 on eroded margins
Source: ICIS
TD
P s
pre
ad
(US
D/to
nn
e)
Breakeven level
CF = 0.83
CF = 0.91 CF = 0.86 CF = 0.88
*CF = correlation factor
CF = 0.96
Historical peak
in end 2012 Six-month
high on
opportunistic
gasoline
blending
demand
Tepid
demand
Nine-month
high on post-
National day
demand in
China and
firm EU, US
prices
www.icis.com
42%
12%
46%
45%
13%
42% 45%
13%
42%
China’s downstream distribution
TDP/STDP/HDA
Petrochemical products
Others (solvent, gasolineblending etc)
China stays as a net TOL importer and feeds primarily
to TDP, followed by solvent, gasoline blending
Source: ICIS
84
86
88
90
92
94
96
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2011 2012 2013 2014 (E)
kil
oto
nn
es
Production Demand Self-sufficiency (%)
0
2011
2013
www.icis.com
0
200
400
600
800
1000
1200
1400
1600
0
20000
40000
60000
80000
100000
120000
140000
160000
Ja
n-1
2
Ma
r-1
2
Ma
y-1
2
Ju
l-1
2
Se
p-1
2
No
v-1
2
Ja
n-1
3
Ma
r-1
3
Ma
y-1
3
Ju
l-1
3
Se
p-1
3
No
v-1
3
Ja
n-1
4
Ma
r-1
4
ton
ne
s/m
on
th
Europe
US
Malaysia
Philippines
Singapore
Thailand
Taiwan
Japan
South Korea
Equivalent import parityfrom east China ex-tank
FOB Korea
China imports increased in early 2014 on slipping
inventories; forward imports will subject to demand
Source: China customs
~660kt/a, 55kt/mth ~812kt/a, 68kt/mth
US
D/to
nn
e
www.icis.com
600
700
800
900
1000
1100
1200
1300
1400
1500
0
50
100
150
200
250
Inve
nto
rie
s (
kil
oto
nn
es
)
south China
east China
China’s TL inventories rose above 150kt post-Lunar
New Year, but declined beginning Apr
Source: ICIS
US
D/to
nn
e
Ave~ 181kt
Ave~ 98.15kt Ave~ 73kt
Ave~ 138kt
Typical stock level
Healthy
consumption
www.icis.com Source: Industry sources
*tonnes/year
PX capacity expansion to accelerate in Asia,
adding 4.02m tonnes in Q2-Q3 2014
www.icis.com
Asia’s TOL to track weak PX on vast expansions in
2014; BZ maybe supported despite capacity additions
BZ factors TOL factors
- High run rates of existing aromatics units on
healthy spread to naphtha
- Some producers attempt to lower TDP run
rates or shut TDP units on squeezed PX
margins, increasing TOL supply while
reducing BZ output
- 2.805m t of new BZ capacities in Jun-Jul
BZ prices
TOL prices
- Absence of Chinese BZ import window
- Lower-than expected BZ downstream demand
because of reduced run rates on eroded margins
- 4.02m t of new PX capacities in Jun-Jul
BZ/TOL factors
- Asia-US BZ arbitrage remains open
- Opportunistic Asia-EU BZ arbitrage opens
- Overall light Asian aromatics shutdown schedule
- Low Chinese domestic BZ stock levels
- Return of BZ demand from downstream
post-turnaround schedule for phenol and SM
ending H2 May-Jun
- Less US BZ import demand on recent hefty Asian,
European arrivals
- Asia summer blending season approaches by end Q2,
increasing both gasoline production and demand for
TOL for blending purpose
- Overall TDP run rates high, despite PX cuts
- Tighter regulation to issue credit terms in
China, gloomy macroeconomics
- Competitively-priced alternative blending components
www.icis.com
Conclusion
• Prevailing high BZ plants’ run rates on healthy margins, while downstream operating
rates are tempered by oversupply, weak consumer demand.
• Changing trade flow pattern of South Korean and Japanese BZ origins exporting to the
US or China, depending on which country fetches the most lucrative margin.
• BZ price upside in H2 2014 on vast downstream expansions will be eliminated by
2.085m tonnes new capacities, lower-than-expected downstream demand, and subject
to US price movement.
• Less spot TOL sales volume on soon to start-up new PX units, but TOL availability could
be improved on lower operating rates or even idling TDP units.
• TOL demand from existing TDP units may decrease on eroded TDP margins, and other
downstream sectors such as solvent and gasoline blending lack strong uptick because
of overall poor macroeconomics amid existing high stock levels and credit issues.
Contributors:
Yeow Pei Lin (Asia olefins)
Rachel Qian (China methanol)
Singapore editorial team
