View
230
Download
0
Category
Preview:
Citation preview
© 2014 Platts, McGraw Hill Financial. All rights reserved.
Evaluating the performance cracker co-products
1
Key Takeaways - Propylene
Cracking light feedstocks changes C2, C3 trade flows – means EU C3 could stay at premium
Higher EU propylene prices could suck in imports
US, Asia eye PDH expansions to fill propylene shortage
Europe on high end of propylene investment curve
Like with ethylene, CTO/MTO are big question mark 2
3
The Global Feedstock Slate Is Getting Lighter
62%
20%
11%
3%
4%
Global Feedstock Use 2014
Naphtha
Ethane
Propane
Butane
Gas oil
57% 28%
9%
3% 3%
Global Feedstock Use 2024
Naphtha
Ethane
Propane
Butane
Gas oil
Source: Platts
4
European LPG Versus Naphtha (%)
5
US LPG Export Cause Global Price Pressure
6
Propylene Pricing At Premium To Ethylene
Source: Platts
Record propylene premium on ethylene
0
200
400
600
800
1000
1200
1400
1600
1800
16
/07
/20
12
16
/08
/20
12
16
/09
/20
12
16
/10
/20
12
16
/11
/20
12
16
/12
/20
12
16
/01
/20
13
16
/02
/20
13
16
/03
/20
13
16
/04
/20
13
16
/05
/20
13
16
/06
/20
13
16
/07
/20
13
16
/08
/20
13
16
/09
/20
13
16
/10
/20
13
16
/11
/20
13
16
/12
/20
13
16
/01
/20
14
16
/02
/20
14
16
/03
/20
14
16
/04
/20
14
16
/05
/20
14
16
/06
/20
14
16
/07
/20
14
16
/08
/20
14
16
/09
/20
14
16
/10
/20
14
16
/11
/20
14
16
/12
/20
14
16
/01
/20
15
16
/02
/20
15
Ethylene CIF NWE
Propylene Poly Grade CIF NWE
Propylene at a record premium to ethylene
$/mt
European C3 Imports Rise
7 Source: Eurostat
0
50000
100000
150000
200000
250000
2012 2013 2014
EU Imports Rise
Propylene Imports
mt
Impact of the Increase to the EU Custom Tariffs not felt on PP
8
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
HDPE LLDPE LDPE PP
Jan-Nov 2013
Jan-Nov 2014
Source: Eurostat
9
On Purpose Expansions Form Bulk of Capacity Addition in Propylene
Asian PDH Projects
10
11
CTO/MTO Expansion in China
PDH Expansions Drive Asian C3 Lower
12 Source: Platts
0
200
400
600
800
1000
1200
1400
1600
1800
Supply Glut In Asia
Propylene Poly Grade FOB Korea
13
North American PDH Projects
Europe To Become More C3 Import Reliant
14
Key Takeaways – Butadiene
Increased global supplies depress prices
EU producers wary of expansions as export demand fails to materialise
Asia aiming for self sufficiency, adding to European sellers woes
Downside to prices on falling natural rubber prices, tyre demand
15
Butadiene Prices Unlikely To Recover to 2011,2012 Highs Soon
16 Source: Platts
0
1000
2000
3000
4000
5000
6000
07/01/2011 07/01/2012 07/01/2013 07/01/2014 07/01/2015
CIF USG
CFR Taiwan
FOB Rotterdam
European Export Demand Fails To Materialise
17
Western Europe, the second largest
butadiene producing region with
18% capacity share (1.925 million
in 2013) expected rapid export
increase
About 500,000 mt of capacity
growth between 2014-2016
0
50000
100000
150000
200000
250000
300000
2012 2013 2014
Exports
Source: Eurostat
EU producers re-think expansions
• Versalis suspends Dunkirk, France butadiene plant
• Ineos shuts Grangemouth butadiene plant
18
Expansions still underway
Plant Capacity (‘000) Notes
OMV , Austria 20 May 2014
BASF, Belgium 155 Started up Sep 2014 (delayed from Q1 start up)
TVK, Hungary 130 May 2015
OMV, Germany 60 Q2 2015
Evonik, Belgium 100 2015
Source: Platts
Asia aims for self sufficiency
Butadiene plants Capacity Notes
PetroChina Sichuan, China 150 Started up in late March 2014
Wanda Chemical, China (Dehydrogenation) 150 Started up in Q1-Q2 2014 BCPL, India 16 Expansion
PT Chandra Asrii, Indonesia 100 Started up in December 2013
PTTGC, Thailand 75 Started up June 2014
Shanghai SECCO, China 90 Started up August 2014
Fujian Refining & Petrochemical, China 60 To start in Q4 2014
Petrochemical Corp of Singapore, Singapore 100 To start in Q4 2014
Zhuhai Zhongguan, China (Dehydrogenation) 70 To start in Q4 2014
19
Asia 2014 expansion to amount to about 800,000 mt of butadiene, of which
there are couple of on-purpose butadiene producers
Source: Platts
Derivatives Also Facing Overcapacity
0
1000
2000
3000
4000
5000
6000
7000
8000
2011 2012 2013 2014E 2015E
('0
00
t)
SBR supply and demand balance
Capacity
Demand
Source: Standard Chartered
Fall In Auto Sales Trend In China
21 Source LMC, Marklines
Negative Substitution Effect From Natural Rubber
22
$/mt
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
03/10/2011 03/10/2013
Rubber FOB Singapore
Propylene -
• Change to light feed will see C3 trade at a premium over C2
• European ethylene, propylene trade flow changes – ethylene exports increase, propylene imports increase
Butadiene-
• Butadiene supply and demand fundamentals point to further downside risks
• Natural rubber price slump weighing on prices too
23
Conclusions:
© 2014 Platts, McGraw Hill Financial. All rights reserved.
Thank You!
24
Nandita Lal, Team Leader, Polymers
nandita.lal@platts.com
Recommended