Embed Size (px)
DESCRIPTION
Platts Senior Editor, Nandita Lal, recently presented this slide deck at Platts Vienna Forum during the EPCA conference last month. Key takeaways include: - 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
Citation preview
© 2014 Platts, McGraw Hill Financial. All rights reserved.
Propylene & Butadiene
Nandita Lal, Team Lead, Polymers
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
Propane, Butane Pricing At Attractive Discounts To Naphtha In Europe
‐10
‐5
0
5
10
15
20
25
02/01/2013 02/07/2013 02/01/2014 02/07/2014
Butane discount to naphtha (%)
Propane discount to naphtha (%)
10% discount that prompts crackers to switch from naphtha
%
Butane discount to naphtha
Propane discount to naphtha
2012 6.3 7.1
2013 7.7 12
2014 13.4 16.4
Source: Platts
5
Propylene Pricing At Premium To Ethylene
Source: Platts
1000
1200
1400
1600
1800
Propylene Poly Grade CIF NWE
Ethylene CIF NWE
Record propylene premium on ethylene
$/mt
European C3 Imports Rise
6
60000
80000
100000
120000
140000
160000
180000
Jan‐Jul 2012 Jan‐Jul 2013 Jan‐Jul 2014
Imports
mt
Source: Eurostat
PDH Expansions Drive Asian C3 Lower
7Source: Platts
1250
1300
1350
1400
1450
1500
1550
Propylene Poly Grade CFR China
$/mt
16 month low
10% drop in prices
Key Asia PDH Projects 2014
Project Country Completion DateCapacity (‘000)
Taekwang IndustriesSouth Korea
2013 250
Tianjin Bohai Chemical ‐ Phase I China2013 600
Zhejiang Sanyuan Petchem China On Stream 450
Shandong Yantai Wanhua China Q4 2014 750
Jiangsu Zhangjiagang/Ningbo Oriental Energy China On Stream 600
Zhejiang Ningbo Haiyue China Q4 2014 600
Zhejiang Satellite Petchem ‐ Phase I China On Stream 450
Total3,700
8
• Post-2014 another 8 million mt of PDH capacity is scheduled to come online till 2020
Source: Platts
9
Light Cracking In US Drives Prices Higher
1250
1300
1350
1400
1450
1500
1550
1600
1650
1700
Propylene Poly Grade FD USG
20 month high
Key North America PDH projects
10
Project Country Completion DateCapacity (‘000)
Dow Chemical Phase‐1 USA mid‐2015750
Dow Chemical Phase‐2 USA late‐2015750
Enterprise Phase‐1 USA Q2 2015750
Enterprise Phase‐2 USA early‐2016750
Formosa Plastics USA Q2 2016600
C3 Petrochemicals USA Q4 20151,200
REXTac USA 2016300
Ascend USA n/a1,000
Williams Redwater PDH Canada 2016500
Total6,600
Source: Platts
Europe To Become More C3 Import Reliant
11
Western Europe To Switch To Deficit
12Source: Platts Petrochemical Analytics
• Western Europe to switch to deficit in 2020
• Deficit set to rise to 1.3 million mt by 2025
Source: Platts
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 13
Butadiene Prices Unlikely To Recover to 2011,2012 Highs Soon
14
0
1000
2000
3000
4000
5000
6000
07/01/2011 07/01/2012 07/01/2013 07/01/2014
FOB RotterdamCIF USGCFR Taiwan
Source: Platts
European Export Demand Fails To Materialise
15
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
16
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 2014BCPL, India 16 ExpansionPT Chandra Asrii, Indonesia 100 Started up in December 2013
PTTGC, Thailand 75 Started up June 2014Shanghai SECCO, China 90 Started up August 2014Fujian Refining & Petrochemical, China 60 To start in Q4 2014Petrochemical Corp of Singapore, Singapore 100 To start in Q4 2014
Zhuhai Zhongguan, China (Dehydrogenation) 70 To start in Q4 2014
17
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
('000t)
SBR supply and demand balance
CapacityDemand
Source: Standard Chartered
Fall In Auto Sales Trend In China
19Source LMC, Marklines
Negative Substitution Effect From Natural Rubber
20
0
0.5
1
1.5
2
2.5
3
3.5
4
19/03/2012 19/03/2013 19/03/2014
Natural rubber TSR FOBSingapore $/kg
$/kg
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 21
Conclusions:
© 2014 Platts, McGraw Hill Financial. All rights reserved.
Thank you!
22
Nandita Lal, Team lead, [email protected]
