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Asia Petrochemical Industry Conference 2015
May 7∼8, 2015
Seoul, Korea
C o u n t r y R e p o r t
F r o m
K O R E A
Korea Petrochemical Industry Association(KPIA)
C O N T E N T SⅠ. Country Report ·························································· 1
Ⅱ. For Committee Meeting ········································· 16 1. General Matters & Raw Materials Committee ····· 16 2. Polyolefins Committee ··············································· 27 3. Styrenics Committee ·················································· 32 4. PVC Committee ···························································· 36 5. Synthetic Rubber Committee ··································· 39 6. Synthetic Fiber Raw Materials Committee ········· 42 7. Chemicals Committee ················································· 47
- 1 -
Ⅰ . Country Report
PETROCHEMICAL INDUSTRY OF KOREA
Country Report
- 2 -
1. Status and Prospect of Korean Economy
The growth rate of the gross domestic product in 2014 showed that the
global economy, around the US, experienced moderate recovery. Facilities
investment also improved, it increased to three point three percent from two
point nine percent in the previous year. Overall domestic demand showed
vulnerable recovery, with the private consumption slowing down, and other
market interactions.
The Korean economy this year has a low price increase rate due to the
decrease in oil prices but the employment increase has been expanded within
the industrial production making the recovery a sign of moderate improvement.
There are a number of positive factors growing towards economic recovery,
such as, recovery of housing and stock markets, tentative agreement on
Iranian nuclear issues and so forth.
However, there are uncertainties overseas, including the possibility of the
US increasing the prime rate, the weakening of the Yen, a possibility of
additional slow down in China and other countries. Similarly, if domestic
consumption does not make a significant improvement, the domestic growth
rate, this year, is expected to be at a similar level with the previous year,
below the rate initially presented by the government of three point seven
percent.
Overall domestic exports are not expected to increase substantially due to
the influence of price declines in petroleum and petrochemical products.
2015 Asia Petrochemical Industry Conference - Korea
- 3 -
<Status and Prospect of Major Indices of Domestic Economy>
(Unit : %)2014 2015 2016
Annual First half Second half Annual Annual
GDP 3.3 3.0 3.7 3.4 3.7
Private consumption 1.7 2.3 2.8 2.6 2.9
Facility investment 5.9 7.0 5.0 6.0 5.7
Construction investment 1.1 2.7 3.8 3.3 2.3
Product export 2.1 △0.2 7.0 3.4 3.9
Data: Bank of Korea (Jan. 2015)
2. Status and Prospect of Petrochemical Industry
[Status of 2014]
The demand and supply of domestic petrochemical industry (based on 3
major fields) in 2014 has production decreasing 2.7% compared to the
previous year for 21.2 million tons and demand decreasing 2.6% compared to
the previous year for 10.48 million tons.
Production of synthetic resin has slightly increased for 0.6% compared to
the previous year, but synthetic fiber raw materials and synthetic rubber have
greatly decreased due to the operation rate following the slow down in export
that the three major fields have shown decreasing rate for the first time after
2012.
Export has recorded decreasing trend for each field because of the slow
down of economy in China, the largest exporting market, and increase of
self-sufficiency rate in petrochemical while domestic demand has shown to decline
2.6% compared to the previous year due to the influence of slowing down in
plastic product production and construction business, and reduction of chemical
fiber production. For a reference, reduction of the overall demand increase rate in
the 3 major fields was the first time since the reduction of 2008 (△2.6% compared
to the previous year).
Country Report
- 4 -
<Supply and demand of major petrochemical products>
(Unit: 1,000 tons)
1H 2H Total 1H 2H Total
G.R G.R G.R G.R G.R G.R
Pro 6,332 9.0% 6,347 3.1% 12,680 6.0% 6,374 0.6% 6,376 0.5% 12,750 0.6%
Exp 3,802 12.7% 3,789 0.9% 7,591 6.5% 3,785 -0.4% 3,793 0.1% 7,578 -0.2%
Imp 160 11.8% 146 -5.6% 306 2.7% 179 11.9% 176 20.3% 354 15.9%
Dem 2,691 4.4% 2,704 5.7% 5,394 5.0% 2,767 2.8% 2,759 2.0% 5,526 2.4%
Pro 3,974 -8.1% 4,103 0.6% 8,078 -3.9% 3,854 -3.0% 3,583 -12.7% 7,437 -7.9%
Exp 1,795 -11.4% 1,952 0.4% 3,747 -5.6% 1,830 2.0% 1,680 -13.9% 3,510 -6.3%
Imp 296 -0.6% 305 -0.9% 601 -0.7% 288 -2.7% 300 -1.7% 588 -2.2%
Dem 2,475 -4.7% 2,457 0.5% 4,932 -2.2% 2,312 -6.6% 2,203 -10.3% 4,515 -8.5%
Pro 540 8.0% 497 -1.7% 1,037 3.1% 529 -2.0% 480 -3.5% 1,009 -2.7%
Exp 363 19.4% 334 -1.3% 697 8.5% 351 -3.2% 306 -8.5% 657 -5.7%
Imp 43 29.2% 41 11.1% 84 19.7% 43 -1.2% 40 -2.4% 83 -1.8%
Dem 220 -4.1% 204 -0.1% 425 -2.2% 221 0.3% 214 4.9% 435 2.5%
Pro 10,847 2.0% 10,948 1.9% 21,795 2.0% 10,757 -0.8% 10,439 -4.6% 21,196 -2.7%
Exp 5,959 4.5% 6,075 0.7% 12,035 2.5% 5,966 0.1% 5,779 -4.9% 11,745 -2.4%
Imp 499 5.2% 493 -1.5% 991 1.8% 509 2.1% 516 4.7% 1,025 3.4%
Dem 5,386 -0.3% 5,365 3.0% 10,751 1.3% 5,300 -1.6% 5,176 -3.5% 10,477 -2.6%
20142013
Syn.
Resin
Syn.FiberRaw
Mat'ls
Syn.
Rubber
Total
Data: KPIANote: Production is based on sales
[Prospect of 2015]
In 2015, the demand and supply of domestic petrochemical (3 major
fields) has production increased 0.9% compared to the previous year for 21.38
million tons and demand increased 0.5% compared to the previous year for
10.53 million tons.
Production is expected to be expanded with the new facilities of high
added value of PE (230KT) for SK Global Chemical and Korea Petrochemical
Ind. Co., Ltd. EG (200KT) as operated at the end of 2014.
2015 Asia Petrochemical Industry Conference - Korea
- 5 -
Export is expected to increase the synthetic resin-led export following the
facilities expansion and the reduction trend of the synthetic rubber is likely to
continue, but the reduction range compared to the previous year is expected
to be moderated.
Domestic demand is expected to make small-scale increase with the base
effect following the minus growth and increase of facility capability of major
demand industry in 2014, as well as the expansion of domestic production and
investment. In particular, the construction order after the first half of 2014 has
been continued for recovery trend in the construction field as the major front
line industry, and in addition, SOC budget increase and so forth by the
government in 2015 would be positive factor. Due to the facility increase of
high added value chemical fiber, it is partially expected to increase the
domestic demand of synthetic fiber raw materials.
<Trend of Fluctuation Rate of Demand for Major Petrochemicals>
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
'05 '06 '07 '08 '09 '10 '11 '12 '13 '14
Total
Syn. Resin
Syn. Fiber Raw Mat'ls
Syn. Rubber
Data: KPIA
Country Report
- 6 -
<Status and Prospect of Demand and Supply of Major Petrochemicals>
(Unit: 1,000 tons)
'07 '13 '14 G.R '15(F) G.RAAGR
('07~'15)
Syn. Resin Product 10,704 12,680 12,750 0.6% 12,992 1.9% 2.5%
Import 135 306 354 15.9% 373 5.2% 13.5%
Sub-Total 10,839 12,985 13,104 0.9% 13,365 2.0% 2.7%
Export 6,041 7,591 7,578 -0.2% 7,752 2.3% 3.2%
Sub-Total 4,799 5,394 5,526 2.4% 5,620 1.7% 2.0%
self-effic. (%) 223 235 231 231
Syn. Fiber Product 7,311 8,078 7,437 -7.9% 7,370 -0.9% 0.1%
Raw Mat'ls Import 662 601 588 -2.2% 521 -11.4% -3.0%
Sub-Total 7,973 8,679 8,026 -7.5% 7,891 -1.7% -0.1%
Export 3,519 3,747 3,510 -6.3% 3,433 -2.2% -0.3%
Sub-Total 4,454 4,932 4,515 -8.5% 4,465 -1.1% 0.0%
self-effic. (%) 164 164 165 165
Syn. Rubber Product 677 1,037 1,009 -2.7% 1,020 1.1% 5.3%
Import 45 84 83 -1.8% 83 0.1% 7.9%
Sub-Total 722 1,121 1,092 -2.6% 1,103 1.0% 5.4%
Export 461 697 657 -5.7% 656 -0.1% 4.5%
Sub-Total 262 425 435 2.5% 446 2.6% 6.9%
self-effic. (%) 258 244 232 229
Product 18,692 21,795 21,196 -2.7% 21,382 0.9% 1.7%
Import 842 991 1,025 3.4% 976 -4.7% 1.9%
Sub-Total 19,534 22,786 22,222 -2.5% 22,359 0.6% 1.7%
Export 10,020 12,035 11,745 -2.4% 11,841 0.8% 2.1%
Sub-Total 9,515 10,751 10,477 -2.6% 10,532 0.5% 1.3%
self-effic. (%) 196 200 202 203
Total
Data: KPIA
2015 Asia Petrochemical Industry Conference - Korea
- 7 -
□ Trend of Supply and Demand for Each Field (1) Synthetic resin
[Status of 2014]
The demand and supply of the domestic synthetic resin in 2014 has production increased of 0.6% compared to the previous year for 12.75 million tons and demand increased of 2.4% for 5.53 million tons.
<Status of Synthetic Resin Demands and Supply>
(Unit: 1,000 tons)
Total 1H 2H Total Total
G.R G.R G.R G.R G.R
Pro 12,680 6.0% 6,374 0.6% 6,376 0.5% 12,750 0.6% 12,992 1.9%
Exp 7,591 6.5% 3,785 -0.4% 3,793 0.1% 7,578 -0.2% 7,752 2.3%
Imp 306 2.7% 179 11.9% 176 20.3% 354 15.9% 373 5.2%
Dem 5,394 5.0% 2,767 2.8% 2,759 2.0% 5,526 2.4% 5,620 1.7%
2013 2014
Syn.
Resin
2015
Data: KPIANote: Production is based on sales
Notwithstanding the increased facilities
of Samsung Total of LDPE/EVA (240KT)
in the 1Q and the high added value of
SK Global Chemical of LDPE (230KT) at
the end of the year, the operation rate
following the slow down of export for
all synthetic resins excluding LDPE (2013
for 95.1% → 2014 for 93.9%), an
increase of 0.6% compared to the
previous year.
2013
2014
85%
90%
95%
100%
1 2 3 4 5 6 7 8 9 10 11 12
Synthetic Resin O/R
Country Report
- 8 -
Looking into the operation rate for each major product, LDPE and PP recorded high operation rate of 106% and 97%, respectively while HDPE (84.6%), PS (86.9%), PVC (89.9%), ABS (90.7%) and the like have shown relatively lackadaisical trend.
In spite of find export record of LDPE, export in HDPE, PP, EPS, PVC, ABS and so forth have shown slowing down in most cases and the export of overall synthetic resins has declined for 2.2% compared to the previous year. In particular, HDPE, PP, EPS, PVC and others have shown the trend of reducing 10% or more compared to the previous year and this is attributable to the fact of reduction of import market of the same products in China.
The domestic demand recorded lower growth rate of 2.4% (2.6%p↓ compared to the previous year) with the lackadaisical growth in plastic products (chemical construction materials, synthetic leathers and so forth), electronics, construction industry, automobile and so forth as major demand industries.
<Production of chemical construction materials>(Unit: 1,000 tons)
<Production of synthetic leather>(Unit: million ㎡)
-10.1%
19.3%
4.8%
1.4%
3.7%1.5%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
400
450
500
550
600
650
700
750
800
'09 '10 '11 '12 '13 '14
-10.5%
-1.9%
2.7%
-2.9%
-5.5%
-2.4%
-12%
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
60
65
70
75
80
85
90
95
100
'09 '10 '11 '12 '13 '14
Data: Statistics Korea Data: Statistics Korea
<Electronic product production amount>(Unit: 100 billion won)
<Automobile production>(Unit: 1,000 cars)
8.3%
22.9%
1.5%0.1%
6.3%
1.6%
-5%
0%
5%
10%
15%
20%
25%
1,500
2,000
2,500
3,000
3,500
'09 '10 '11 '12 '13 '14
-8.2%
21.6%
9.0%
-2.0%-0.9%
0.1%
-10%
-5%
0%
5%
10%
15%
20%
25%
-
1,000
2,000
3,000
4,000
5,000
'09 '10 '11 '12 '13 '14
Data: KEA Data: KAMA
2015 Asia Petrochemical Industry Conference - Korea
- 9 -
[Prospect of 2015]
The demand and supply of domestic synthetic resin in 2015 has production to increase 1.9% for 12.99 million tons and demand to increase 1.7% compared to the previous year for 5.62 million tons.
In spite of the facilities increase of Samsung Total in the 1Q of 2014 for LDPE/EVA (240KT) and SK Global Chemical in the end of 2014 for high added value for LDPE (230KT), it is expected to record a limited increase rate of 1.9% in accordance with the increase in NCC T/A (2 cases in 2013 → 4 cases in 2014). With the naphtha partially recovering its export competitiveness in major markets of China and others due to the reduction of material competitiveness with the Middle East, US (gas), China (coal) following the vulnerable trend, it is expected to rebound to "+" increase rate from the “-” export increase rate of the previous year.
Domestic demand is expected to make the recovery for economic rebound and export increase following the recovery of the advance economic regions, but due to the increase in possibility for additional slow down in China, the growth of industries related to domestic synthetic resin has slightly slowed down to have the demand increase rate of synthetic resin to decline 0.8%p compared to the previous year to 1.7%.
(2) Synthetic Fiber Raw Materials
[Status of 2014]
The demand and supply of domestic synthetic fiber raw materials in 2014
has production with decrease of 7.9% compared to the previous year for 7.44
million tons and demand with decrease of 8.5% compared to the previous
year for 4.52 million tons.
Country Report
- 10 -
Status and Prospect of Supply of Synthetic Fiber>
(Unit: 1,000 tons)
Total 1H 2H Total Total
G.R G.R G.R G.R G.R
Pro 8,078 -3.9% 3,854 -3.0% 3,583 -12.7% 7,437 -7.9% 7,370 -0.9%
Exp 3,747 -5.6% 1,830 2.0% 1,680 -13.9% 3,510 -6.3% 3,433 -2.2%
Imp 601 -0.7% 288 -2.7% 300 -1.7% 588 -2.2% 521 -11.4%
Dem 4,932 -2.2% 2,312 -6.6% 2,203 -10.3% 4,515 -8.5% 4,465 -1.1%
2013 2014
Syn.FiberRaw
Mat'ls
2015
Data: KPIANote: Production is based on sales
Due to the prolonged suspension of operation that leads to excessive
supply in the region mainly from the large-scale new facility increase for
China's TPA, CPLM and so forth as well as conversion into facilities, production
has continued its trend of reduction following 2013. It is attributable to the
influence of production reduction following the prolonged stoppage of operation
for SK Petrochemical (TPA 520KT ’14.7~), Samnam Petrochemical (TPA 350KT
’12.4Q~), Capro (CPLM #1 55KT ‘13.10~/#2 60KT ‘14.6~) and so forth along
with the facility conversion of Lotte Chemical (TPA #2 350KT → converted
into PIA in June 2014).
Accordingly, the overall operation rate of synthetic fiber raw materials has
declined for 3.5% from 85.4% in 2013 to 81.9% in 2014, and in particular,
CPLM has drastically decreased from 87.1% to 52.9%, showing substantial
weakening of productivity. The TPA operation rate also showed substantial
reduction of operation rate from 86.2% in 2013 to 81.8% with the suspension
of additional facility operation of SK Petrochemical in 2014.
Export has continued its decrease trend following the previous year with
the slow down of export in TPA, AN, and CPLM excluding EG and DMT.
2015 Asia Petrochemical Industry Conference - Korea
- 11 -
Domestic demand has continued its decrease trend following the previous
year with the demand for synthetic fiber raw materials reduced due to the
reduction of production following the slow domestic demand in chemical fiber
as the upstream industry. Production of domestic chemical fiber in 2014 was
1,367,000 tons, a reduction of 6.2% compared to the previous year and
demand with the reduction of 10.2% for 754,000 tons. Production for each
chemical fiber item has shown slowing down trend for most categories in
polyester F 659KT (△11.2%), polyester SF 543KT (1.9%), nylon F 115 (△10.5%), and Acrylic SF (△9.1%).
[Prospect of 2015]
The demand and supply of domestic synthetic fiber raw materials in
2015 has production decreased 0.9% compared to the previous year for 7.37
million tons and demand decreased 1.1% compared to the previous year for
4.47 million tons.
Production has reduced with the influence of continued production
slowing down following the long-term prospect of low operation rate of TPA
and CPLM. However, the EG production is likely to recover some reduction
range of overall synthetic fiber raw materials as it was increased in accordance
with the facility increase of Korea Petrochemical Ind. Co., Ltd. (200KT, Dec.
2014).
Export is expected to continue with the export reduction rate, following
the previous year, thanks to the large-scale supply expansion of China and
import regulations of the alternative markets for major exports, such as, India
and others.
For a reference, the annual production capability for China's TPA in 2014
was 43.6 million tons, an increase of 10 million tons or more compared to the
previous year. It is scheduled for additional new facilities of around 10 million
tons as similar to the previous year in 2015 that the excessive supply in the
Country Report
- 12 -
region is even more deepened and the export market in the region is
expected to be more fierce. China has secured production capability much
more than its own demand in TPA, CPLM and others and AN is likely to have
a great reduction of import in accordance with the new operation of 600,000
tons this year.
With the continuance of slow down in production following the depressed
demand in domestic chemical fiber, the reduction trend is expected to continue
with the domestic demand on chemical fiber and the range of reduction
compared to the previous year will be moderated to a degree with the
expansion of partial production capability of high added value of chemical
fiber.
(3) Synthetic Rubber
[Status of 2014]
The demand and supply of domestic synthetic rubber of 2014 has
production to record 1.01 million tons with the reduction of 2.7% compared to
the previous year and demand to record for 440,000 tons, an increase of
2.5% compared to the previous year.
<Status and Prospect of Supply for Synthetic Rubber>
(Unit: 1,000 tons)
Total 1H 2H Total Total
G.R G.R G.R G.R G.R
Pro 1,037 3.1% 529 -2.0% 480 -3.5% 1,009 -2.7% 1,020 1.1%
Exp 697 8.5% 351 -3.2% 306 -8.5% 657 -5.7% 656 -0.1%
Imp 84 19.7% 43 -1.2% 40 -2.4% 83 -1.8% 83 0.1%
Dem 425 -2.2% 221 0.3% 214 4.9% 435 2.5% 446 2.6%
2013 2014
Syn.
Rubber
2015
Data: KPIA,Note: Production is based on sales
Notwithstanding the expansion of supply capability following the new
facility increase (LG Chemical SSBR 60KT, November 2013) and increase of
domestic demand for the synthetic rubber following the increase of domestic
2015 Asia Petrochemical Industry Conference - Korea
- 13 -
tire production, production is expected to be slowed down with the weakening
of market status for exporting.
Export has recorded for reduction of
a great range for △5.7% compared
to the previous year and it works as
a main factor for slowing down of
the tire production of China, resulting
in slowing down of demand for
synthetic rubber and progress of self
supply to reduce the export to
China.
2013
2014
50%
60%
70%
80%
90%
100%
1 2 3 4 5 6 7 8 9 10 11 12
Synthetic Rubber O/R
In addition, the SBR export of ASEAN and so forth has the decrease of
15% compared to the previous year with significant weakening of major
export market environment. For a reference, China's SBR and BR increase
recorded high decrease rate of △8.8% and △11.3% compared to the
previous year respectively.
Domestic demand was converted to the "+" growth in 2014 under the
"-" demand growth in 2013 in accordance with the domestic tire production
increase. According to the announcement of the Korea Tire Industry
Association, the domestic tire production increase rate in 2014 has increased
for 0.5%p compared to the previous year as 1.3% (99,714,000 units).
[Prospect of 2015]
The demand and supply of the domestic synthetic rubber in 2015 has
production to increase 1.1% compared to the previous year for 1.02 million
tons and demand to increase 2.6% compared to the previous year for
450,000 tons.
Country Report
- 14 -
Export is continued to have the import demand reduction of the major
export region, such as, China and others, to continue the lackadaisical export.
With the increase of domestic tire production with the demand increase
of OE (Original Equipment) tire following the release of number of new
domestic cars and tire of export to the US by Korea following the import
restrictions of the US on tires from China, the domestic demand of the
synthetic rubber is expected to increase for 2.6% compared to the previous
year.
(4) Export
[Status of 2014]
Export of entire petrochemical industry in 2014 recorded 48.2 Billion
Dollars, a decrease of 0.3% compared to the previous year. While the export
to major export countries (regions) of China (△6.2%), India (△4.1%), ASEAN
(△5.3%) and others was reduced, export to the US (51.9%), EU (30.5%),
Turkey (42.9%) and others has shown significant increase.
On the basis of volume, intermediates material (22.4%) and basic diary
products (2.3%) have led the increasing trend while synthetic fiber raw
materials (△6.3)% and synthetic resin (0.2%) showed adverse impact. For a
reference, the export volume was expanded for 4.5% compared to the
previous year with 30.75 million tons in 2013 to 4.5% increase for 32.13
million tons.
2015 Asia Petrochemical Industry Conference - Korea
- 15 -
<Trend of Exporting petrochemical Products for Each Year>
-20
-10
0
10
20
30
40
50
0
100
200
300
400
500
600
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14
Amount YoY(%)USD 100 miilion %
Data: KOTIS
[Prospect of 2015]
Export in 2015 is expected to be 42.1 Billion Dollars, a decrease of
12.6% compared to the previous year. With the expansion of supply following
the facility increase for PX, NCC, and EG in the second half of 2014 and SM
and propylene in 2015, the export volume is to be increased for
approximately 6.2%, but the amount is expected to reduce due to the decline
of export price following the weakened materials.
For each country, it is expected to increase the export to China for base
effect and intermediary material as well as the increase of the export to the
US for benzene, butadiene base diary product and ABS, PS and other
non-ethylene synthetic resin (Based on volume).
For each item, the export expansion of intermediary material and
synthetic resin is expected following the facility expansion, but the synthetic
fiber raw materials is expected to reduce the export availability due to the
reduction of facility capability, base diary product with the increase of
domestic demand (Based on volume).
- 16 -
Ⅱ. For Committee Meeting
1. General Matters & Raw Materials
Committee
2015 Asia Petrochemical Industry Conference - Korea
- 17 -
General Matters & Raw Materials Committee
1. Olefins (Ethylene, Propylene, Butadiene)
ITEM : Ethylene
1) The 2014 Results
With the influence of capacity expansion of ethylene derivatives in Korea
that have been undertaken from the end of 2013, such as, capacity
expansions of EVA for LG Chemical (140KTA) and Samsung Total (230KTA),
m-LLDPE (230KTA) of SK Global Chemical, and new establishment of EO/EG
(200KTA) of KPIC, the supply situation compared to the previous year has
become tightened and the supply situation has become more worsened with
the supply reduction following the T/A of Crackers of Japan beside YNCC of
Korea.
With the expansion of the ethylene demand following the facility increase
of the derivative, the ethylene-PE spread showed fluctuation of marginal level
following the change of the ethylene price, but the overall spread of the base
material in naphtha-PE has continuously increased to show outstanding
economic feasibility. In particular, the oil price/naphtha price has drastically
decreased from 4Q of 2014, but the polyolefin profitability has made great
improvement from the price regression of the PE price.
2) The 2015 Forecast
While the tight supply situation following the increased facility of
derivative is processed in 2014 LG Chemical (760KTA), Samsung Total
(850KTA), YNCC (850KTA), Lotte Chemical (1,000KTA) and other crackers
planned for 2Q and 4Q of 2015 are expected to deepen its tightness
compared to the previous year for the supply situation in Korea with the
influence of T/A.
General Matters & Raw Materials Committee
- 18 -
With the expected booming trend for the derivative with the influence of T/A
of SM, the polyolefin profitability is expected to be fine, but the main export
market, China, has the uncertain economic prospect that would work as the
restricting factor.
ITEM: Propylene
1) The 2014 Results
The propylene capacity of the Korean domestic market of 2014 has
increased for 62kt compared to the previous year due to the revamping of LG
Chemical NCC. While the capacity has slightly increased, the domestic and
export demand has made substantial increase (480kt) due to the outstanding
PP market.
After the second half, due to the suspension of operation for LCY of Taiwan
and new facility of China's PDH, the market has sustained its declining trend,
but the operation rate has been maintained at high level due to the entirely
outstanding cracker economic feasibility.
2) The 2015 Forecast
In the event that Hyosung PDH is completed this year, it is scheduled to
have substantial capacity increase of 300kt. The operation rate is expected to
decline due to the worsening market situation of propylene downstream, such
as, AN, AA and so forth, and the export demand also is expected to have
significant downfall due to the increase of self-sufficiency rate of China.
In the first half, thanks to the influence of stable oil price/naphtha price and
T/A within the region, relatively fine price and spread is expected to maintain,
but it is inevitable to convert into weak trend due to the influence of supply
increase with additional S/U of PDH in China, operation of Hyosung PDH and
so forth.
2015 Asia Petrochemical Industry Conference - Korea
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ITEM: Butadiene
1) The 2014 Results
While there is no change of production capacity of butadiene and its
derivative in Korea, such as, BR/ SBR/ ABS and others, relatively stable market
situation is sustained in the second half due to the influence of reduction in
supply following the expansion of LPG cracking. Spread compared to the
previous year is reduced
엳 to the weakening natural rubber production,
decline in operation rate for downstream plants of China.
2) The 2015 Forecast
Following 2014, there is no change of production capacity in Korea, but
due to the T/A of Korean crackers, such as, LG Chemical (760KTA), Samsung
Total (850KTA), YNCC (850KTA), Lotte Chemical (1,000KTA) and so forth, the
supply situation is expected to make slight improvement compared to the
previous year.
However, because of slow down of global economy, sustained over-supply of
rubber in the Chinese market, continued weakening of natural rubber price
and so forth.
General Matters & Raw Materials Committee
- 20 -
(Unit: 1,000MT)2013 2014
2015(Prospect)
Ethylene
Supply
Production 8,135 8,294 8,428
Import 144 170 270
Total 8,279 8,464 8,698
Demand
Domestic 7,047 7,361 7,493
Export 1,117 1,071 1,205
Total 8,164 8,432 8,698
Year-end Capacity 8,290 8,313 8,430
Propylene
Supply
Production 6,596 6,922 6,754
Import 434 438 430
Total 7,030 7,360 7,184
Demand
Domestic 6,153 6,541 6,384
Export 1,208 1,300 800
Total 7,361 7,841 7,184
Year-end Capacity 6,698 6,760 6,818
Butadiene
Supply
Production 1,110 1,131 1,194
Import 381 400 177
Total 1,491 1,531 1,371
Demand
Domestic 1,269 1,295 1,275
Export 184 170 96
Total 1,453 1,465 1,371
Year-end Capacity 1,318 1,318 1,318
2015 Asia Petrochemical Industry Conference - Korea
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2. Aromatics(Benzene, Toluene, Xylene)
ITEM: Benzene (Unit: 1,000MT)
2013 20142015
(Prospect)
Supply
Production 4,902 5,362 5,950
Import 89 67 50
Total 4,991 5,429 6,000
Demand
Domestic 3,503 3,531 3,500
Export 1,399 1,898 2,500
Total 4,902 5,429 6,000
1) The 2014 Results
In 2014, with the expansion of large-scale production capacity with the
operation of new facilities for Samsung Total, SK Incheon Petrochem, UAC and
others, the domestic PX production capacity has expanded to 6,448KT, an
increase of 1,430KT compared to the previous year. Following the increase in
facility scale, production recorded for 5,362KT, an increase of 9.4% compared
to the previous year, and following the increase in domestic production, the
import was declined to 67KT, a decrease of 24.7% compared to the previous
year.
Notwithstanding the outstanding production increase of main downstream,
such as, SM, phenol, and others, the CPLM production had drastic decrease of
approximately 40% compared to the previous year that the domestic demand
of benzene increased only 0.8%. The export has expanded to 1,898KT, an
increase of 9.4% compared to the previous year due to the great expansion
of the US export and expansion of domestic supply.
General Matters & Raw Materials Committee
- 22 -
2) The 2015 Forecast
The domestic benzene production in 2015 is expected to expand to
5,950KT, an increase of 11% compared to the previous year due to the
large-scale facilities increase in the previous year. In spite of SM capacity
expansion by Samsung Total in the first half of this year, the domestic
benzene demand is likely to decrease 1% compared to the previous year for
3,200KT with the decline of operation rate from a number of T/A on SM, slow
down in domestic Phenol production and so forth. The export is expected to
expand to 2,500KT, an increase of 32% compared to the previous year with
the increase of export from reduction of domestic demand, increase of export
to China, US and others.
ITEM: Toluene(Unit: 1,000MT)
2013 20142015
(Prospect)
SupplyProduction 2,290 2,078 1,950
Import 186 588 800
Total 2,476 2,666 2,750
DemandDomestic 1,406 1,897 2,050
Export 1,071 769 700
Total 2,477 2,666 2,750
1) The 2014 Results
With the increase in toluene self-consumption following a number of
increased facilities of PX in 2014, the production was decreased to 2,078KT, a
reduction of 9.3% compared to the previous year, but import was expanded
to 588KT, an increase of 216% compared to the previous year. The domestic
demand was expanded to 1,897KT, an increase of 34.9% compared to the
previous year and, following the domestic production reduction and increase in
domestic demand, export was reduced to 769KT, a decrease of 28.2%
compared to the previous year.
2015 Asia Petrochemical Industry Conference - Korea
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2) The 2015 Forecast
With the increase in toluene self-consumption following the expansion of
PX production in 2015, production is expected to be 1,950KT, a reduction of
6.2% compared to the previous year. The domestic demand is expected to
increase to 2,050KT, an increase of 8.1% compared to the previous year, and
the export is expected to continue its decrease after the previous year in
accordance with the reduction of domestic production and increase of demand.
ITEM: Mixed Xylene(Unit: 1,000MT)
2013 20142015
(Prospect)
SupplyProduction 3,106 3,069 2,800
Import 1,656 1,552 1,700
Total 4,762 4,621 4,500
DemandDomestic 3,707 3,271 3,500
Export 1,055 1,349 1,000
Total 4,762 4,620 4,500
1) The 2014 Results
Domestic MX production showed an reduction of 1.2% compared to the
previous year due to the influence of expanding self-consumption following the
PX production increase. For the MX domestic demand, it was reduced for
11.8% compared to the previous year due to the influence of MX demand
reduction and others following the reduction of the 800KTA facility operation
rate of Hyundai Cosmo.
General Matters & Raw Materials Committee
- 24 -
2) The 2015 Forecast
Production is expected to decrease 8.8% compared to the previous year
with the increase of the self-consumption by expanding the PX production. On
the other hand, the MX domestic demand is expected to increase 7.0%
compared to the previous year due to the influence of MX demand increase
following the re-operation of the 800KTA facilities of Hyundai Cosmo, and
accordingly, the import is expected to increase for 9.5% accordingly.
ITEM: Para Xylene(Unit: 1,000MT)
2013 20142015
(Prospect)
SupplyProduction 6,403 7,374 8,600Import 611 126 100Total 7,014 7,500 8,700
DemandDomestic 3,970 3,528 3,200Export 3,045 3,972 5,500Total 7,015 7,500 8,700
1) The 2014 Results
With the expansion of large-scale production capacity by the operation of
many new facilities, such as, Samsung Total, SK Incheon Petrochem, UAC in
2014, the domestic PX production capacity has increased for 3,460KT
compared to the previous year to 10,080KT. Following the increase of facility
scale, the production was recorded for an increase of 15% compared to the
previous year for 7,374KT and the import was drastically declined from 611KT
in 2013 to 126KT in 2014 in accordance with the increase of the domestic
production. The domestic demand was reduced to 3,528KT, an 11% decrease
compared to the previous year due to the reduction of PX demand following
the decrease of TPA operation rate. The export has made significant increase
to 3,972KT, an increase of 30% compared to the previous year with the
expansion of domestic supply and reduction of demand. Major exporting
2015 Asia Petrochemical Industry Conference - Korea
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country was China (export ratio of 91%), recording 3,630KT, an increase of
34% compared to the previous year, and Taiwan had 290KT, a decrease of
14% compared to the previous year.
2) The 2015 Forecast
In 2015, the domestic PX production is expected to expand 8,600KT, an
increase of 17% compared to the previous year thanks to the large-scale
capacity expansion in the previous year. Due to the production decrease
following the slow down in the TPA export, the PX domestic demand is 3,200KT, expecting to decrease for 9% compared to the previous year. The
export is expected to make a significant increase following the previous year
thanks to the export expansion to China due to the increase of export
capacity following the reduction of the domestic demand, increase of PX
import demand of PX following the increase of the chemical fiber production in
China, interference with the supply due to the fire in PX facility at Dragon
Aromatics of China in April. On the other hand, the import is expected to
decline following the previous year in accordance with the reduction of
domestic demand and securing domestic facility capacity.
General Matters & Raw Materials Committee
- 26 -
ITEM: Raw Material (Naphtha)(Unit: 1,000MT)
2013 2014(E) 2015(P) G.R G.R
Supply 23,431 23,933 5.5% 25,321 5.8%Supply Import 23,210 23,935 3.5% 24,174 1.0%
Total 46,641 47,868 4.2% 49,495 3.4% Crackers 25,320 25,193 -0.5% 25,319 0.5%
Demand* Reformers 17,071 19,632 15.0% 21,398 9.0% Others 4,250 3,043 -13.9% 2,777 -8.7%
1) The 2014 Results
The demand for the domestic naphtha in 2014 is estimated to increase
for approximately 4% compared to the previous year. For each field, following
the reduction of the ethylene production and increase of the LPG cracking ratio, the
demand for NCC is estimated to have a slight reduction. On the other hand, due to
the increase of naphtha use following the new facility operation of PX, the demand for
reformer has increased a great deal compared to the previous year. The production is
analyzed to make a great increase of naphtha production in accordance with the
increased facility of condensate splitter.
2) The 2015 Forecast
The demand for domestic naphtha in 2015 is expected to continue the
demand growth around the reformer following the previous year. On the other
hand, notwithstanding the capacity expansion of 150KTA of ethylene for LG
Chemical in the 4Q in 2014, it is expected to make limited increase of 0.5%
for the increase rate of naphtha demand for NCC due to the decline of NCC
operation rate following the increase of T/A of NCC compared to the previous
year. Due to the prospect to increase the PX operation rate following the
great PX export, the naphtha production is expected to continue expanding
following the previous year with the expansion of the condensate
splitter-leading production.
- 27 -
2. Polyolefins Committee
Polyolefins Committee
- 28 -
Polyolefins Committee
ITEM : LDPE (including L-LDPE, EVA)(Unit : 1,000MT)
2013 20142015
(Prospect)
Supply
Production 2,292 2,465 2,665Import 110 114 138Total 2,402 2,579 2,803
Demand
Domestic 1,225 1,075 1,260Export 1,177 1,503 1,543Total 2,402 2,579 2,803
Year-end Capacity 400 2,368 2,608
1) The 2014 Results
In 2014, the total domestic LDPE production (including LLDPE/EVA) had
increased 8% (2,456KT) compared to that of in year 2013. Such an increase
was due to the expansion of business done by both LG Chemical and
Samsung Total. Samsung Total had built its additional EVA/LDPE plant in 2014,
having additional capacity of 240KT. LG Chemical also had increased its
additional capacity of 140KT by installing more EVA/LDPE plants in 2013. In
year 2014, the total amount of imported LDPE products was similar to that of
in year 2013.
Due to the economic recession in 2014 however, the demand of LLDPE
general purpose film in the domestic market had decreased. Most of leftover
inventories of LDPE during this time were exported to overseas.
2015 Asia Petrochemical Industry Conference - Korea
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2) The 2015 Forecast
The total production capacity of Korean producers in 2015 is expected to
be 2,655 KT which is 200KT more than that of in 2014. Samsung Total and
SK Global Chemical will be selling aggressively in 2015 with their increased
capacities. SK Global Chemical is planning to increase its capacity 230KT more
in 2015 by building new LLDPE plant.
The demand of domestic LDPE market would grow up to 1,260KT.
However, the exporting amount of LDPE would be similar to that of in
year 2014, which was 1,543KT. This is due to the adjusting and balancing the
demand for LDPE by big producers in domestic market.
The domestic demand is expected to grow to 1,260KT as 2013's
domestic demand. The Export quantity is similar to 2014's, 1,543KT due to the
balance of production domestic demand.
ITEM : HDPE(Unit : 1,000MT)
2013 20142015
(Prospect)
Supply
Production 2,236 2,094 2,087Import 38 46 48Total 2,274 2,140 2,135
Demand
Domestic 882 942 975Export 1,392 1,198 1,160Total 2,274 2,140 2,135
Year-end Capacity 2,575 2,545 2,545
1) The 2014 Results
In 2014, Korea’s HDPE production was decreased by 6.4% at 2,094
thousand ton compared to 2013 according to market environments. Domestic
demand was increased by 6.8% on the back of slight recovery of domestic
economy
Polyolefins Committee
- 30 -
2) The 2015 Forecast
HDPE production is expected to be 2,087 thousand ton which is down by
0.3% compared to 2014. The reason is that more turn-around are scheduled.
(SamsungTotal, LG Chemical, YNCC, Lotte Chemical etc)
The domestic demand is expected to increase by 3.5% because of slightly
recovered domestic economy. The export volume will be slightly decreased due
to less production and more sales to domestic market.
ITEM : P P(Unit : 1,000MT)
2013 20142015
(Prospect)
Supply
Production 3,970 4,118 3,831 Import 36 37 30 Total 4,006 4,155 3,861
Demand
Domestic 1,555 1,599 1,641 Export 2,414 2,519 2,190 Total 3,969 4,118 3,831
Year-end Capacity 4,270 4,270 4,270
1) The 2014 Results
In 2014, PP prices have mostly shown stable trend in line with crude oil
price and feedstock prices. However, not only crude oil but also naphtha and
following downstream feedstock price fell sharply at the end of 2014.
China imported 5.0 million ton of PP, up by 0.2% year on year. Chinese
PP self-sufficiency rate increased up to 74%(0.8%p↑ year on year). Due to
global depression, overall PP demand was not active enough not only China
but also domestic market in Korea.(China domestic demand in 2014 was 19.1
million ton, up by 7% year on year)
2015 Asia Petrochemical Industry Conference - Korea
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2) The 2015 Forecast
In 2015, Chinese GDP growth rate is expected to be 7.0% which is
0.5% lower than 2014. It is lowest level since 2004 in 11 years. Chinese PP
self-sufficiency will be raised by more than 5%, as new PP production capacity
comes online. New capacity expansion in China is expected over than 3.5
million ton of PP, including new method of production MTO/CTO, which is
around 2.0 million ton in 2015.
The world economy is expected to enter gradually in a recovery stage.
Accordingly, crude oil, naphtha as well as propylene price is expected to be on
upturn trend. Due to upcoming turnaround in Middle East and Asian crackers,
supply tightness could be occurred concerning market condition transiently.
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3. Styrenics Committee
2015 Asia Petrochemical Industry Conference - Korea
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Styrenics Committee
ITEM : P S(Unit : 1,000 MT)
2012 20132014
(Prospect)
Supply Production 609 579 587 Import 22 26 28 Total 631 605 623
Demand Domestic
309
328
300
294
304
300 Export 637 594 604 Total 736 716 716
Year-end Capacity 808 808 808
* EPS excluded
1) The 2014 Results
The production was 579 thousand tons, 4.9% lower than that in 2013
due to sales decrease in domestic as well as export. The demand was 594
thousand tons, 6.7% lower than that in 2013 mainly came from 10.3% YoY
decrease in export.
2) The 2015 Forecast
The production will be 1.4% higher than that in 2014 with no more
capacity change. The demand will be 1.7% higher than that in 2014, but its
growth will be far behind in 2013.
Styrenics Committee
- 34 -
ITEM : A B S(Unit : 1,000 MT)
2013 20142015
(Prospect)
SupplyProduction 1,558 1,569 1,549Import 3 7 6Total 1,561 1,576 1,555
DemandDomestic 367 368 375Export 1,194 1,208 1,180Total 1,561 1,576 1,555
Year-end Capacity 1,696 1,696 1,846
1) The 2014 Results
Compared to 2013, the stagnation of the export market by ABS maker’s
cost pressure and a weak Chinese market, the domestic market is stagnant
due to lack of demand in the front industry.
2) The 2015 Forecast
Significant growth will be difficult because of the recession increasing the
risk of the front industry, downward revision about economic growth rate, and
increase of China self-sufficiency.
2015 Asia Petrochemical Industry Conference - Korea
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ITEM : S M(Unit : 1,000 MT)
2013 20142015
(Prospect)
SupplyProduction 2,725 3,022 2,980 Import 948 845 750 Total 3,673 3,867 3,730
DemandDomestic 2,406 2,368 2,380 Export 1,266 1,474 1,350
Total 3,672 3,842 3,730 Year-end Capacity 2,870 2,870 3,220
1) The 2014 Results
There was a few operation trouble compared to last year(2013). Good
economics in the beginning of the year make high operation rate and SKGC in
Ulsan complex in Korea restart their EBSM plant from May(The plant was shut
down again on August due to poor economics.).
2) The 2015 Forecast
The Korea biggest SM producer, Samsung Total will increase their
capacity to 1,050KT/Y (from 930KT) during T/A season. Samsung Total has
two SM unit in DAESAN complex. This time they will increase No.1 plant
capacity by 120KT(280KT --> 400KT).
Production of SM in 2015 is expected to be 2,980 thousand tons due to
scheduled maintenance work. Total 7 units out of 8(exclude SKGC) in Korea
will have a turn around this year.
- 36 -
4. PVC Committee
2015 Asia Petrochemical Industry Conference - Korea
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PVC Committee
ITEM : P V C(Unit : 1,000MT)
2013 20142015
(Prospect)
SupplyProduction 1,370 1,388 1,412Import 86 89 75Total 1,456 1,477 1,487
DemandDomestic 796 894 897Export 660 583 590
Total 1,456 1,477 1,487Year-end Capacity 1,468 1,475 1,475
1) The 2014 Results
Due to high price of raw materials and slow growth of China, PVC
market was sluggish.
2) The 2015 Forecast
Since global economy will slightly improve in 2015, PVC market will
become better in near future.
PVC Committee
- 38 -
ITEM : V C M(Unit : 1,000MT)
2013 20142015
(Prospect)
SupplyProduction 1,453 1,498 1,547Import 17 15 6Total 1,470 1,513 1,553
DemandDomestic 1,370 1,388 1,412Export 100 125 135
Total 1,470 1,513 1,547Year-end Capacity 1,673 1,680 1,680
1) The 2014 Results
Due to high price of raw materials and slow growth of China, PVC market
was sluggish.
2) The 2015 Forecast
Although uncertainty of oil price still exists, the burden of VCM makers
will be slightly relieved from raw materials.
- 39 -
5. Synthetic Rubber Committee
Synthetic Rubber Committee
- 40 -
Synthetic Rubber Committee
(Unit : MT) 2013 2014
2015(Prospect)
SBR
Capa. (Year-end) 746 746 746
SupplyProduction 591 561 568Import 67 63 61Total 658 624 629
DemandDomestic 274 278 287Export 384 346 343Total 658 624 629
BR
Capa. (Year-end) 516 516 516
SupplyProduction 446 448 452Import 17 20 21Total 463 468 473
DemandDomestic 150 157 160Export 312 311 314Total 462 468 474
* SBR(E-SBR+S-SBR) / BR (HBR + LBR)
1) The 2014 Results
The demand and supply of domestic synthetic rubber of 2014 has
production to record 1.01 million tons with the reduction of 2.7% compared to
the previous year and demand to record for 440,000 tons, an increase of
2.5% compared to the previous year.
In spite of the new facility increase (LG Chemical SSBR 60KT, November
2013) and increase of domestic demand of the synthetic rubber following the
production increase of domestic tire, production is decreased due to the
weakening of market status for exporting.
Export has recorded for reduction of a great range for △5.7% compared
to the previous year and it works as a main factor for slowing down of the
tire production of China, resulting in slowing down of demand for synthetic
rubber and progress of self supply to reduce the export to China. In addition,
the SBR export of ASEAN and so forth has the decrease of 15% compared to
2015 Asia Petrochemical Industry Conference - Korea
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the previous year with significant weakening of major export market
environment. For a reference, China's SBR and BR increase recorded high
decrease rate of △8.8% and △11.3% compared to the previous year
respectively.
Domestic demand was converted to the "+" growth in 2014 under the
"-" demand growth in 2013 in accordance with the domestic tire production
increase. According to the announcement of the Korea Tire Industry
Association, the domestic tire production increase rate in 2014 has increased
for 0.5%p compared to the previous year as 1.3% (99,714,000 units).
2) The 2015 Forecast
The demand and supply of the domestic synthetic rubber in 2015 has
production to increase 1.1% compared to the previous year for 1.02 million
tons and demand to increase 2.6% compared to the previous year for
450,000 tons.
Export is continued to have the import demand reduction of the major
export region, such as, China and others, to continue the lackadaisical export.
With the increase of domestic tire production with the demand increase
of OE (Original Equipment) tire following the release of number of new
domestic cars and tire of export to the US by Korea following the import
restrictions of the US on tires from China, the domestic demand of the
synthetic rubber is expected to increase for 2.6% compared to the previous
year.
- 42 -
6. Synthetic Fiber Raw Materials
Committee
2015 Asia Petrochemical Industry Conference - Korea
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Synthetic Fiber Raw Materials Committee
ITEM : A N(Unit : 1,000MT)
2013 20142015
(Prospect)
SupplyProduction 730 700 680Import 100 90 80Total 830 790 760
DemandDomestic 497 514 500Export 306 276 250Total 803 790 750
Year-end Capacity 850 850 850
1) The 2014 Results
Comparing with 2013, domestic demand of AN in Korea was increased by
3.4% and reached to 514KT.
Production decreased 3.7% to 700KT due to weak export and unplanned
shutdown of Tongsuh No.4 plant.
2) The 2015 Forecast
Domestic demand of AN will be 2.7% lower than in 2014 because ABS,
AN production growth rate are expected to be little lower than in 2014 due to
weak export.
AN Production will decrease 2.9% to 680kt due to weak export and
decreasing production of it’s derivatives.
Synthetic Fiber Raw Materials Committee
- 44 -
ITEM : Caprolactam(Unit : 1,000MT)
2013 20142015
(Prospect)
SupplyProduction 235 143 98Import 29 68 112Total 264 211 211
DemandDomestic 238 208 209Export 0 0 0
Total 238 208 209Year-end Capacity 270 270 270
1) The 2014 Results
Because of oversupply caused by large expansion of CPL and its
derivatives, and the economic slowdown in China, production in Korea was
decreased by –40%, which is 143KT. Meanwhile Korean import was increased
to 68KT, which is 130% increase in compared to the previous year.
2) The 2015 Forecast
Generally, the growth rate of supply and demand will continue to be
sluggish as they were in 2014, affected on continued expansion of China and
Korea economic slowdown.
2015 Asia Petrochemical Industry Conference - Korea
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ITEM : E G(Unit : 1,000MT)
2013 20142015
(Prospect)
SupplyProduction 1,202 1,263 1,311Import 466 422 440Total 1,668 1,685 1,751
DemandDomestic 1,202 1,165 1,168Export 468 545 555Total 1,670 1,710 1,723
Year-end Capacity 1,364 1,389 1,514
1) The 2014 Results
Affected by 3.9% drop in the domestic polyester market in 2014, total
domestic demand for MEG fell by 3.1% year on year to 1.17 million tons.
Meanwhile, thanks to 4.3% growth in the Chinese polyester market in 2014,
China imported 8.45 million tons of MEG, due to which Korea’s export of MEG
rose by 16.5% compared to last year. As a result, total domestic output has
totaled 1.26 million tons, up by 5.1% year on year.
2) The 2015 Forecast
Growth in domestic demand for MEG will be limited in 2015 as domestic
chemical fiber firms’ total polyester output is expected to be just about 3.16
million tons, which is on a par with last year’s. Though Korea’s total MEG
capacity rises by 8.3% due to KPIC’s MEG expansion(150KT/year), PCI data
forecasts Korea will export merely 560KT of MEG in 2015, based on 86.6%
MEG operating rate. Considering usual operating rate in Korea, however, there
will be an additional 100KT MEG oversupply, which will be exported to China
where 4.9% growth in polyester output is predicted this year.
Synthetic Fiber Raw Materials Committee
- 46 -
ITEM : T P A(Unit : 1,000MT)
2013 20142015
(Prospect)
SupplyProduction 5,755 5,384 4,765
Import 0 0 0Total 5,755 5,384 4,765
DemandDomestic 2,816 2,708 2,708Export 2,945 2,676 2,055Total 5,761 5,384 4,764
Year-end Capacity 6,840 5,920 5,920
1) The 2014 Results
In 2014, we saw various company reshuffles in the PTA market due to
weakening economics. As a result, the annual PTA output was reduced by 371
kmt (6%) to 5,384 kmt. It is estimated that the reductions in capacity come
from stopped/scratched plants.
On the demand side, the increase of the Chinese Self-Sufficiency rate
combined with the levy of Anti-dumping duties for Indian material resulted in a
reduction of Asian demand for PTA and a rapid shift to exports to off-shore markets. It
is estimated that overall Demand dropped by 377 kmt (7%) to 5,384 kmt.
2) The 2015 Forecast
Market prospects are rather opaque for 2015 with low chances of
improvement in market economics.
Overall growth rate in PTA production has slowed down but new
capacities in China are expected to come in line adding pressure to the export
market. Prospects for 2015 remain unclear for currently shut facilities of
capacity of 500 kmt or less.
Overall annual production Capacity is expected to fall by 619 kmt (11%) to
4,765 kmt whilst Demand is expected to fall by 620 kmt (12%) to 4,764 kmt
- 47 -
7. Chemicals Committee
Chemicals Committee
- 48 -
Chemicals Committee
ITEM : 2-Ethyl Hexanol(Unit : 1,000MT)
2013 20142015
(Prospect)
SupplyProduction 385 380 385Import 64 111 112Total 449 491 497
DemandDomestic 387 380 380Export 67 83 84Total 454 463 464
Year-end Capacity 400 400 400
※ Production is Shipment, Demand/Domestic is included self consumption
1) The 2014 Results
In the first half of 2014, 2EH profitability has drastically worsened due to
strong feedstock and weak demand in downstream. New start-up plants in
China(total production capacity 2,100KT/year) heavily boosted spot liquidity and
this lowered down 2EH price further.
In the second half, raw material C3 constantly plunged along with oil
price and took the floor to $684/MT at the end of 2014 since it reached
$1,413/MT on July. In the end of the year 2EH-C3 spread has temporally
widened to $493/MT but this was not cause by 2EH improvement but mainly
by oil price recession and expectations for new C3(PDH, MTO) facility in China
next year.
2) The 2015 Forecast
In the first half of 2015, Asian creaker’s turn around which concentrated
from Mar. to June will cause strong uptrend of C3 price. On the contrast, 2EH
chronic oversupply condition will go on. In the second half, we prospect
2EH-C3 spread can be somewhat improved. China’s new C3 plants(MTO, PDH)
2015 Asia Petrochemical Industry Conference - Korea
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are expected to come on stream at about 7million MT in this year and this is
more than doubled compared to last year’s new capacity.
In conclusion, even though weak demand in 2EH downstream will be the
same as last year, 2EH profitability can be improved by feedstock(C3) price
adjustment in the second half.
ITEM : Phthalic Anhydride(Unit : 1,000MT)
2013 20142015
(Prospect)
SupplyProduction 399 397 387Import 0 0 1Total 399 397 388
DemandDomestic 208 205 205Export 191 191 183Total 399 397 387
Year-end Capacity 405 405 393
1) The 2014 Results
Domestic Market - Gradual Demand ruduction due to regulation of using
phthalic-based plasticizer and PA market downsizing(Paing, Alkyd Resin,
Pigment)
Weakness of Domestic Buyer’s importing PA due to heavy price
cometition among PA makers in PA domestic demand’s reduction
Export Market - Heavy price competition against India, China’s enlarged
PA capacity and European origin that have much competitiveness caused from
EURO currency like Russia, Italy.
Chemicals Committee
- 50 -
2) The 2015 Forecast
Domestic Market – Price competition among the makers would continue
because of stagnant PA domestic market without developing new PA application
Export Market – Main trend would be affected by change main market
and producing country like India and China make according to economic
growth and operation ration.
ITEM : Acetic Acid(Unit : 1,000MT)
2013 20142015
(Prospect)
SupplyProduction 492 550 509Import 62 52 45Total 554 602 554
DemandDomestic 437 439 413Export 122 157 149Total 549 596 562
Year-end Capacity 570 570 570
1) The 2014 Results
Effect from strong raw material (MeOH) Asian AA price began high, then
AA fell down dramatically with weaken MeOH price until March. AA price had
been turned to strong due to shortage of VAM stocks in Asia following VAM
plant scrap in EU and key producers’ F/M in US.
Moreover Chinese AA key producers were struggling with production
trouble at the same time. Strong AA trend lasted until end of Q3, but weak
MeOH and crude oil price help to keep AA producers proper margin.
2015 Asia Petrochemical Industry Conference - Korea
- 51 -
2) The 2015 Forecast
Overall AA market will be expected to turn bullish from Q2, because of
shortage of AA stocks with several key producers’ TAR plan. Chinese PTA new
capacity and expansion will add shortage of AA stocks
After finishing TAR in Q2, AA price is expected to down again, and then
it will last end of year
ITEM : Phenol(Unit : 1,000MT)
2013 20142015
(Prospect)
SupplyProduction 868 980 980
Import 72 45 55Total 940 1,025 1,035
DemandDomestic 750 800 835Export 165 230 200Total 915 1,030 1,035
Year-end Capacity 980 980 980
1) The 2014 Results
① Global trend
1Q 2Q 3Q 4Q
Outlook Negative Less negative Positive Very negative
Price(ICIS CMP Avg.) USD1,424/MT USD1,456/MT USD1,592/MT USD1,235/MT
② Analysis by each factors
- 1~2Q : Strong raw material price and the weak demand in downstream
pushed Phenol makers to be faced with worse profitability and to
reduce their operating ratio or to stop operating.
- 3Q : Due to the narrowed spread and worse profitability, the operation
of new Phenol plants in China has been delayed to 2015. Thanks to
Chemicals Committee
- 52 -
the delayed start-up and reduced operating ratio during 1~2Q, the
market price of Phenol went up to over $1,600/MT.
- 4Q : Along with the downturn of raw material Bz and C3, the price of
Phenol has sharply gone down which made the Bz-Phenol spread to
be narrowed.
2) The 2015 Forecast
① Global trend
1Q 2Q 3Q 4Q
Outlook Positive Less positive Negative Very Negative
② Forecast by each factors
- 1Q : The availability of Phenol has been tightened by the scheduled
plant maintenance and the curtailed plant operating rate. Phenol prices
were assessed as higher against a backdrop of firmer raw material
prices and limited cargo availability.
- 2Q : As new plants in China would be in a position to supply material,
the impact of the maintenance shutdowns in China is expected to
dissipate.
- 3~4Q : The operation of new Phenol Plants in Asia will turn the
market into chronic oversupply conditions and cut down the profit of
manufacturers.
< Phenol Production News >
Start-up S/D‘15.1Q SSMC 250KT Jan. KPB(380KT), LG Daesan(300KT) ‘15.2Q Cepsa 250KT Apr. SSMC(250KTA), Lihuayi(220KTA),
Sinopec SABIC(220KTA), Jilin(94KTA) FCFC 300KT Apr.