Global Butadiene Markets: the importance of Crude C4 · Global Butadiene Markets: the importance of...

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Global Butadiene Markets: the importance of Crude C4 Bernard Bekaert Chairman & CEO ICIS World Olefines Conference Madrid, 12.03.2014

Transcript of Global Butadiene Markets: the importance of Crude C4 · Global Butadiene Markets: the importance of...

Page 1: Global Butadiene Markets: the importance of Crude C4 · Global Butadiene Markets: the importance of Crude C4 Bernard Bekaert Chairman & CEO ICIS World Olefines Conference Madrid,

Global Butadiene Markets:

the importance of Crude C4

Bernard Bekaert

Chairman & CEO

ICIS World Olefines Conference

Madrid, 12.03.2014

Page 2: Global Butadiene Markets: the importance of Crude C4 · Global Butadiene Markets: the importance of Crude C4 Bernard Bekaert Chairman & CEO ICIS World Olefines Conference Madrid,

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DISCLAIMER

The following presentation reflects the personal opinion and vision

of the author. Although high care is given to the correctness of the

shown data, the author will not accept any liabilities for errors in

such data, if any. The presented material is meant for discussion

purposes only and should not be used for commercial nor strategic

decisions. Please note that the logic of the past is not necessarily

the logic of the future.

ICIS World Olefins Conference - Madrid - March 2014

Page 3: Global Butadiene Markets: the importance of Crude C4 · Global Butadiene Markets: the importance of Crude C4 Bernard Bekaert Chairman & CEO ICIS World Olefines Conference Madrid,

Content

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1. Specialized Logistics & Trading

2. Butadiene is a co-product • Ethylene

• Crude C4

• Butadiene

3. Major changes 2015-2020 • Europe

• United States

• Middle East

• Asia

4. Conclusions & Opportunities

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Page 4: Global Butadiene Markets: the importance of Crude C4 · Global Butadiene Markets: the importance of Crude C4 Bernard Bekaert Chairman & CEO ICIS World Olefines Conference Madrid,

1.1 Specialized Logistics & Trade

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C4U

TRADE

• C4U Trade offers logistic services and solutions for the C4 markets worldwide

• We focus on structural, recurrent business based on our logistics network and expertise

• We facilitate, combine and aggregate shipments and propose optimized flows between producers and consumers

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1.2 Structured for Global Growth

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C4U TRADE INTERNATIONAL, AG

ZUG, SWITZERLAND

C4U TRADE USA

HOUSTON, TEXAS

C4U TRADE EUROPE

LEUVEN, BELGIUM

C4U MIDDLE EAST

UAE (2014)

C4U TRADE ASIA

SINGAPORE (2014)

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2014

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2.1 Butadiene is a co-product

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R

E

F

I

N

E

R

Y

C

R

A

C

K

E

R

Butadiene

Extraction

Naphtha Crude Oil

3000kT

1000kT C2

500kT C3

300kT CC4 130kT Butadiene

or B/E = 13%

170kT Raffinate-1

Lights

Pygas

Fraction Price Unit

Crude Oil 100 $/bbl

Crude Oil 700 $/mt

Naphtha 920 $/mt

Crude C4 1030 $/mt

Butadiene 1400 $/mt

Rough Cost+ Values

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2.2 Ethylene 2010-2020:

strong growth, except in Europe

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NOTE: world (million tons): 2010: 122 – 2015: 145 – 2020: 175

0

10.000

20.000

30.000

40.000

50.000

2010 2015 2020

ETHYLENE 2010 - 2020 (KT)

South East Asia

West Europe

Middle East

North America

North East Asia

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2.3 Crude C4’s 2010-2020:

Ethane vs Naphtha cracking

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NOTE: world (million tons): 2010: 12 – 2015: 13 – 2020: 16

0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

2010 2015 2020

Crude C4 as Butadiene 2010-2020 (KT)

South East Asia

West Europe

Middle East

North America

North East Asia

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2.4 Butadiene 2010-2020:

hydrogenation vs extraction

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NOTE: world (million tons): 2010: 10 – 2015: 12 – 2020: 14

0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

2010 2015 2020

BUTADIENE 2010 - 2020 (KT)

South East Asia

West Europe

Middle East

North America

North East Asia

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• Lower operating rates/ closures

• Lighter cracking (E/P/B)

• 400 – 600 KT extra BD extraction capacity by end of 2015 (LBI, BASF, Evonik, OMV, MOL, Versalis)

• Much of this extra BD is relocated capacity. Net extra molecules 150 – 200 KT.

• EU will be short in Crude C4, but may be long in BD.

• BD production/ capacity ratio from 2.0/ 2.4 to 2.2/ 2.8

3.1 Major Changes: Europe

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• 10 million tonnes of extra Ethylene capacity announced by 2018 (30 -> 40 MMT).

• Despite Ethane cracking and thus low B/E, non-negligible 200 KT extra BD.

• Better utilisation of existing BD extraction and close to self-sufficiency... but may be offset by less Crude C4 available from Europe.

• On-purpose BD?

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3.2 Major Changes: United States

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• Ethylene capacity annouced to grow from 20 -> 35 MMT.

• NGL’s and Naphtha introduced as feed, hence B/E ratio’s improving from 2 to 5%

• BD derivative projects planned (ABS, PBR, EPDM, Butyl Rubber)

• Logistic constraints for stand alone crackers, high potential for complexes like Al Jubail

• Heavier olefins/ Elastomers/ product diversification/ job creation/ automotive industry high on the strategic agendas

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3.3 Major Changes: Middle East

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• Lower GDP growth rates, but still very healthy

• Series of elastomer projects (NBR, PBR, ABS, SBR, EPDM, Butyl Rubber)

• Continued need for C4 imports, despite Ethylene expansions (40 -> 60 MMT)

• US/ MDE will use feedstock cost advantage to compete for Asian markets

• Alternative technologies CTO/ MTO/ BDH

• Shale?

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3.4 Major Changes: Asia

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• Access to Crude C4 is the critical issue

• Massive investments based on competitive feedstock in the US and the Middle East, steady growth in Asia

• Europe under pressure

• Shift in trade flows

• C4’s on the agenda in the MDE

• No global C4 shortage at today’s operating rates and projected growth

• Logistic constraints, S/D imbalances and low liquidity will continue to fuel price volatility

4. Conclusions

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C4U Trade: connecting the dots

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