Market Opportunity of Polyolefin Elastomer & Plastomer for ... · Market Opportunity of Polyolefin Elastomer & Plastomer (POE & POP) in China by Shawn Zhang CNCIC May 17th, 2019 Only

Market Opportunity of

Polyolefin Elastomer & Plastomer

(POE & POP) in China

by Shawn Zhang

CNCIC

May 17th, 2019

Only used for CNCIC 2019

NOT PUBLICLY DISCLOSED

Contents

Introduction on CNCIC

Global POE&POP market dynamics

China POE&POP market

Supply

Booming Demand

Price and profitability

Forecast

Challenges and opportunities

1© 2019 CNCIC Consulting. All rights reserved



CNCIC is an authoritative chemical industrial information service &

consulting institute in China, and focuses on chemical industrial market

research for nearly 60 years

Established

Economic

Information Center

of the Ministry of

Chemical Industry

Established Scientific &

Technological Information

Research Institute of

Ministry of Chemical

Industry

Merged to

establish

CNCIC

Transferred

to enterprise

1959 1984 1992 1999

─ Research Institute of Industry Planning

─ Research Institute of Industry Economics

─ China National Petrochemicals Information Center

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Development Center

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Association

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Petrochemicals and other commodity chemicals

─ CNCIC Price Index

● Reliable Internal Database

– China National Library of Engineering-Chemical Branch

– Member of NSTL (National Science and Technology Library)

● The Largest Chemical Resource Center in China

2019

2

Introduction of CNCIC

© 2019 CNCIC Consulting. All rights reserved



CNCIC aims to be a reliable & long-term chemical consulting service

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3

Introduction of CNCIC




Polyolefin Elastomer(POE) and Polyolefin Plastomer(POP) are

materials of growing commercial importance

4

POE & POP-introduction

Term Properties Key applications

POE

• Superior elasticity

• Good toughness

• Low temperature

ductility

• thermal stability and

UV resistance

• Automotive

• Foams

• Wire and cable

• Film

• Medical good

• Footwear

POP

• Superior seal

performance

• Enhanced toughness

• Great optics

• High oxygen

transmission rate

• Food packaging

• Industrial packaging

• Hot melt adhesive

● POE and POP are ethylene/α-olefin copolymers that bridge

the performance gap between conventional plastics and

elastomers

– Ethylene-based, comonomers are octene (C8), hexene

(C6) or butylene (C4)

– Make the resin flow faster, flex longer, stick better and

breathe better


Plastics-easy processing

Elastomer-elastic properties



Only a handful of POE/POP suppliers holding their own

patents of production dominate the global market

5

POE & POP-global supply

Company

Capacity, kt/a

Key TechnologyPOE POP Total

Dow 420 445 865 • Titanium catalyst

• Dow's Insite

Mitsui 290 - 290 • Exclusive metallocene catalytic

SSNC

(SABIC SK

Nexlene

Company)

90 90 180 • Nexlene

• Metallocene catalytic solution polymerization

and high-pressure ion technology

LG 60 30 90 • Metallocene polymerization catalyst and

solution method

ExxonMobil 50 130 180 • Exxpol metallocene

Borealis 50 70 120 • Exclusive metallocene catalytic

Total 960 765 1,725

Global Supply of POE/POE in 2018, kt/a


● Key POE/POP suppliers: Dow, Mitsui, SNNC, LG, ExxonMobil, and Borealis

● In 2018, the global capacity of POE/POP was 1,725 kt, with a CAGR of 5% in past five years

Source: Public information, IHS, CNCIC



The global POP/POE consumption reached 1.5 million Mt

with major applications in auto and packaging segments

6

POE & POP-global demand


Global POE consumption split in 2018

Automobile56%

Foam16%

Wire & Cable11%

Household Appliance

6%

Food Packaging

4%

Industrail Packaging

2%

Others5%

874 kt

● Auto, Foam, and wire & cable industry are the

major applications with 83% of consumption

Global POP consumption split in 2018

Food Packaging

47%Industrial Packaging

36%

Heat-melt Adhensive

9%

Others8%

654 kt

● Packaging Film is the major application with

share of 83%

Source: Public information, IHS, CNCIC



From Nov. 2018 to 2020, the incremental capacity of refining-

chemical integration projects will include 53 million Mt/a of oil

refining and 5.5 million Mt/a of ethylene

Project Refining Ethylene Location

Hengli

Fujia-Huayang

20

20

1.5

NAChangxingdao

Risun

Yihong

Middle east gulf

Hebei Xinhua

15

15

15

20

1.2

-

-

-

Caofeidian

Shenghong 16 1.1 Lianyungang

Sinopec Gaoqiao 15 1.0 Shanghai

Zhejiang PC40,

20 (I)

2.8,

1.4 (I)Zhoushan

Gulei-JV 16 (II) 0.8 (I) Gulei

ExxonMobil NA 1.2 Huizhou

Total >172 9.6

By 2020 40 3.7

7

Project Refining Ethylene Location

Aramco-Norinco-JV 15 1.0 Panjin

CNPC-Russia-JV 15 - Tianjin

Sinochem Quanzhou 3 1.0 Quanzhou

CNPC-PDVSA-JV 20 1.2 Jieyang

Sinopec-Kuwait-JV 10 0.8 Zhanjiang

BASF NA 1.0 Zhanjiang

Sinopec-BASF-JV NA 1.0 Nanjing

Total >63 6.0

By 2020 13 1.8* Projects marked in red are scheduled to put on stream by 2020

Huizhou,

GuangDong

Ningbo,

Zhejiang

Caofeidian,

Hebei

Caojing,

Shanghai

Changxindao,

Dalian

Gulei, Fujian

Lianyungang,

Jiangsu

Zhanjiang,

Guangdong

Jieyang,

Guangdong

Panjin,

Liaoning

Quanzhou,

Fujian

Tianjin

Nanjing,

Jiangsu

PLANNED PROJECTS IN THE 7 BASES

Planned Refining-Chemical Integration Projects in China （million Mt/a）

Outside the 7 Large-scale refining & chemical bases

7 Large-scale refining & chemical bases

POP&POE-dynamic of PE industry in China


PLANNED PROJECTS OUTSIDE THE 7 BASES

Source: CNCIC



At present, there is no POE/POP capacity in China due to

high technical barriers and shortage of raw materials

● Progress in localized production of in China is slow, therefore, it can only rely on import to meet the

domestic market demand

● POE products in the domestic market mainly come from suppliers in the US, Japan and South Korea

8

Brands of POE/POP imported to China in 2018

Company POE Brands and grades POP Brands grades

Dow Engage Series 8100/8110/8150/8200/8480 Affinity Series PL1880G/PL1881G/PL1450G1P

Engage Series 7270/7277/7447/7467 Affinity Series PF7266/PF1140G

Mitsui Tamfer DF Series 610/710/810/640/740/7350

Tamfer A Series A4070S/1085S/4085STamfer H Series 1030S/5030S

-

SABIC Fortify Series C1070/1070D，C5070/5070D，C0570/0570D

Cohere Series 8402/8102/8570D/8170D

SK Solumer Series 871/875/891/883 Supreme Series 051/024/021/028

LG Lucene Series 168/175/565/875Lucene Series 170/670/180

Luence Series LF100/ LC180

ExxonMobil Exact Series 9061/9071/9081/9371 -

Borealis Queo Series 8203Queo Series 6800 LA

Queo Series 8201/8203


POE & POP-supply in China

Source: CNCIC



Progress in localized production of POE&POP in China is slow,

several companies are looking for technology providers

POE & POP-supply in China

© 2018 CNCIC Consulting. All rights reserved 9

“Pilot test plant of SINOPEC was built

in ZRCC, but not in operation, there

won’t be further progress in the short

term.”SINOPEC BRICI Prof. Zhang

“The whole progress of CNPC is

slower than SINOPEC’s, the test of

POE is still in batch process,

continuous test is not possible now,

new progress will be made in 2019

according to plan.”CNPC RIPED Mr Wang

SINOPEC Progress: Pilot Test

Main Participant: SINOPEC

BRICI-a, Prof. Bogeng Li from Zhejiang University

Pilot test plant was built in SINOPEC (Zhenhai refining), but not in operation.

CNPC Progress: Small Scale Test (Succeed in batch process, but hasn’t start small scale continuous production yet. )

Main Participant: CNPC DPRC-b

Currently in small scale phase, continuous plant is still in design, new progress will be made next year.

a. SINOPEC BRICI: Beijing Research Institute of Chemical Industries

b. CNPC DPRC: China National Petroleum Corporation Daqing Petrochemical Research Center(DPRC)

POE&POP localization progressing

ProgressingLiaoning

HuajinShenhua SINOPEC CNPC

Preliminary

research

Technology study

Laboratory test

Pilot test

Plants construction

Source: CNCIC



POE & POP-import in China


The import of POE/POP of China in 2018 was 301.3 kt, in

which Thailand and Korea accounted for 67%

Import

source

Import volume,

kt

Thailand 101

Korea 73

Singapore 59

USA 25

Saudi Arabia 16

Other 6

Total 280

12%

4% 45%39%

DOW

Borealis

DOWDOW

SK

SABIC

Import

source

Import volume,

kt

Thailand 9.5

Korea 8.2

Spain 1.8

Netherlands 0.8

Saudi Arabia 0.8

Other 0.2

Total 21.3

China’s import sources of POP in 2018

China’s import sources of POE in 2018

9%

6% 36%26%

21%

DOW

EXXONMOBIL

DOW

SABIC

EXXONMOBI

L

DOW

MITSUI

SK

SABIC

LG

Mitsui

Source: China Custom, CNCIC



Domestic demand of the POE and POP in China is booming

gradually with a CAGR% of 18% and 9% (2013-2018)


POE & POP-demand in China

280

23

20152013 2014 20182016 2017

POE

POP

POE/POP consumption in China 2013-2018

ktAuto, 50%

Foam, 9%

Wire&Cable, 8% Household

appliance, 5%

Industrial packaging,

18%

Food packaging,

5%

Others, 23%

Food packaging,

52%

Industrial packaging ,

23%

Adhesives, 13%

Others, 12%

POE consumption by applications

POP consumption by applications

Source: CNCIC

1

2

3

1



POE & POP-POE application in Auto

12

Auto industry is the largest application of POE. Its total POE

consumption in 2018 was around 140kt, accounting for 50%

of the national total

● In auto sector, POE is mainly used for modification of PP material to increase the impact resistance

and tensile properties of the substrate

● The proportion of POE added in auto interior parts is generally 10-15%, and the proportion of POE

added in exterior parts is 17-25%

PP/POE/Inorganic

filler (Talc powder,

CaCo3)

18-22%

12

3

4

5

7 6

Bumper

Fender

Side door

sideboard

Instrument

panel

Steering

wheel

Door trim

Seat

PP/POE/Inor

ganic filler

(Talc powder,

CaCo3)

17-20%

PP/POE/Inorganic


CaCo3)

15-20%

PP/POE/Inorganic


CaCo3)

10-15%

PP/POE/Inorganic


CaCo3)

12-15%

PP/POE/Inorganic


CaCo3)

10-15%

PP/POE/Inorganic


CaCo3)

18-20%


POE addition ratio and grade in auto parts, total consumption: 140kt

Copolymer Grade Brand

C8

8999 Dow

875L SK

XUS58705 Dow

8150 Dow

C5070D Sabic

8200 Dow

871L SK

8842 Dow

C0570D Sabic

C4

7467 Dow

DF610 Mitsui

A-1050S Mitsui

DF740 Mitsui

LC168 LG

Source: CNCIC

1

Competing Materials: EPDM,

EPR, PVC, OBC, SEBS



0

1

2

3

4

5Perfomance

Price

Delivery

Sale servicePayment

Batchstability

Brand

POE & POP-POE application in Auto

13

High performance-price ratio of POE is the most important

procurement criteria for Auto customers, while the key

unmet need is pre and after sale service


● In auto segment, price and performance are

equally important in POE procurement

– Performance: melt index, density, impact

resistance and compatibility

– Price: price stability

– Pre and after sale service: no special

requirement

Procurement criteria Satisfaction level

● Satisfaction: brand, performance, batch stability

and delivery of POE and POE supplier

● Unmet needs: pre and after sale service

– Technical guidance is weak, and no practical

application instruction

– Performance defect under special environment

0

1

2

3

4

5Perfomance

Price

Delivery

Sale servicePayment

Batchstability

Brand

Source: CNCIC



POE & POP-POE application in foam

14

POE’s key application in foam segment is footwear

Outsole

Mid-sole

Shoe-pad

EVA/POE

POE addition ratio: 10-20%

● China’s POE consumption in foam sector was 26.3 KT in 2018, accounting for 9.4% of the national

total

● In foam sector, POE is mainly used as shoe materials. In addition, it is also used for fitness foam

mats, children's combination foam toys, foam packaging cushioning materials, and sound

absorbing materials

● POE mainly uses EVA as the base material in foaming sector, and the addition ratio is generally 15-

20%


POE addition ratio and grade in footwear, total consumption: 26.3kt

Copolymer Grade Brand

C8

8999 Dow

C0570D Sabic

8150 Dow

C0560D Sabic

XUS58705 Dow

C5070D Sabic

C1070D Sabic

8003 Dow

C1085 Sabic

C4

7467 Dow

LC175 LG

DF840 Mitsui

DF740 Mitsui

2

Source: CNCIC

Competing Materials:

PVC, EVA, SBS/SEBS,

TPV, EPR, PUR



0

1

2

3

4

5Performance

Price

Delivery

Sale servicePayment

Batchstability

Brand

0

1

2

3

4

5Performance

Price

Delivery

Sale servicePayment

Batchstability

Brand

POE & POP-POE application in foam

15

Good performance and batch stability of POE are the most

important procurement criteria for foam customers, while the

key unmet need is high price and unstable supply


● In foam segment, POE performance and batch

stability are the most important procurement

criteria

– Performance: impact resistance, softness

of foam

– Batch stability is very important


● Satisfaction: brand, performance and sale service

of POE and POE supplier

● Unmet needs: high price and unstable supply

– Unstable supply caused by the production

schedules of POE producers

Source: CNCIC



POE & POP-POE application in packaging

16

Industrial packaging (non-food packaging) sector

saw fast growth in its POE consumption in 2017-2018

● China’s POE consumption in industrial packaging sector was 50.4KT in 2018

● Traditional industrial packaging includes industrial wrap film, FFS, shrinkable film, etc. New-type

industrial packaging includes photovoltaic cell packaging film

● POE for traditional packaging uses PP or PE as the substrate. The addition ratio is generally

low, only 5-20%

● POE for new-type packaging is separately produced into film-packaged cells and combined

with other materials into composite boards. It is one of the emerging materials in the

photovoltaic industry. The addition ratio of POE in the industry is as high as 98%

Glass

POE film

Battery

POE film

Glass

POE as basic

material,

used ratio is

98%

PE/POE, PP/POE

POE addition ratio：5-20%

Tra

ditio

n

pa

cka

gin

g

New

-type

packagin

g


Competing Materials: EVA

Competing Materials: LLDPE



0

1

2

3

4

5Performance

Price

Delivery

Sale servicePayment

Batchstability

Brand

0

1

2

3

4

5Performance

Price

Delivery

Sale servicePayment

Batchstability

Brand

POE & POP-POE application in packaging

17

Good performance of POE is the most important procurement

criteria for industrial packaging customers, while the key unmet

need is delivery



● In industrial packaging segment, POE

performance is the most important procurement

criteria

– Performance: resistivity, light transmittance

and tensile strength

● Price is not an important procurement criteria

– The addition of POE can improve the process

efficient and product performance, which can

offset the high cost of POE itself

● Satisfaction: brand, performance and sale service

of POE and POE supplier

● Unmet needs: delivery

– The POE shipping period is unstable, resulting

in a shortage of supply.



POE & POP-POP application in packaging

18

POP is mainly used in food packaging and industrial

packaging in China

● China’s POP consumption in packaging sector was 17.3KT in 2018, accounting for 75% of the

national total

− POP was mostly used for food packaging, which accounts for 52% of the total POP

consumption

− POP addition ratio in POP/PP or POP/PE is generally low, only 5-10%

PP/POP， PE/POP

POP addition ratio：5-10%

Industrial packaging Food packaging Food packaging

Industrial packaging

Applications

© 2019 CNCIC Consulting. All rights reserved Source: CNCIC

Competing Materials: LLDPE, MLLDPEOnly used for CNCIC 2019


0

1

2

3

4

5Performance

Price

Delivery

Sale servicePayment

Batchstability

Brand

0

1

2

3

4

5Performance

Price

Delivery

Sale servicePayment

Batchstability

Brand

POE & POP-POP application in packaging

19

High performance-price ratio of POP is the most important

procurement criteria for food packaging customers, while

the key unmet need is high cost



● In food packaging segment, POP performance

and price are the most important procurement

criteria

– Performance: stretching resistance and

light transmission

– Price: only high-end products use POP

● Satisfaction: brand, performance and sale

service of POP and POP supplier

● Unmet needs: price

– The price of POP is high, so only high-end

food packaging products would add POP

Source: CNCIC



Price and profitability has been going down in past few

years due to more furious competition

20

Average price and profit rate of POE

0%

5%

10%

15%

20%

25%

30%

35%

16,000

17,000

18,000

19,000

20,000

21,000

2013 2014 2015 2016 2017 2018

In USD/MT


POE & POP in China-Price

In USD/MT

Price

Profit rate

Average price and profit rate of POP POP price by applications in China 2018In USD/MT In USD/MT

0%

5%

10%

15%

20%

25%

30%

16,000

17,000

18,000

19,000

20,000

2013 2014 2015 2016 2017 2018

Profit Rate

Price

Source: CNCIC

POE price by applications in China 2018

Application POE average Price

Automobile 2,790

Household Appliance 2,620

Wire & Cable 2,620

Foam 2,600

Food Packaging 2,650

Industrial Packaging 2,770

Application POP average Price

Food Packaging 2,720

Industrial Packaging 2,800

Adhesive 2,840

Others 2,500

3,100

3,000

2,900

2,800

2,700

2,600

2,500

2,400

3,000

2,900

2,800

2,700

2,600

2,500

2,400

2,300



By 2023, the demand for domestic POE market will reach

541 kt, with a CAGR of 13% (2019-2023)

21

POE Price forecast 2019-2023

In USD/MT


● In 2019, the estimated domestic demand for POE is 330 kt, for 2023, is 541 kt

– From 2019 to 2023, the CAGR of domestic POE consumption is 13%

● In 2023, the price of POE is expected to be 2,430 USD/MT, which is 11% lower than that in 2018.

● In 2019-2023, the main applications of POE still include: Auto, industrial film, wire &cable and foam

– Auto will remain the largest application with 44%, followed by industrial packaging, accounting for

30%.

Market Assessment & Opportunities of POE & POP in China

POE Demand Forecast 2019-2023

Wire & CableFood Packaging

Foam

Industrial

Packaging

Auto

Others

330

541In kt

2,000

2,100

2,200

2,300

2,400

2,500

2,600

2,700

2,800

2018 2019 2020 2021 2022 2023

-11%Only used for CNCIC 2019


The apparent demand for domestic POP market in 2023

was 4.3 kt with a CAGR of 6% (2019-2023)

22

Market Assessment & Opportunities of POE & POP in China

● In 2019, the estimated domestic demand for POP is 34,200 MTs, for 2032, is 42,900 MTs

– From 2019 to 2023, the CAGR of domestic POP consumption is 5%.

● In 2023, the price of POP is expected to be 2,350 USD/MT, which is 11% lower than that in 2018.

● In 2019-2023, the main applications of POP include: food and industrial packaging and hot melt

adhesives

– Food packaging is the most widely used, accounting for 57%

In kt

Food

Packaging

Industrial

Packaging

Others

34

43

In USD/MT

Heat-melt

Adhesive


2,000

2,100

2,200

2,300

2,400

2,500

2,600

2,700

2018 2019 2020 2021 2022 2023

-11%

POE Price forecast 2019-2023 POE Demand Forecast 2019-2023



Challenges and opportunities for potential POE/POP players in

China market

Overall Assessment from CNCIC

s


• Some local POE users prefer

cheaper off-grade products

• Plastics processing companies are

not very familiar with POE

products, so they may misuse them

• Plastics modification companies’

environmental compliance cost

increases and will choose POE’s

competitive materials to save costs

POE

• POP is not very cost effective

compared to its competitive

materials

• Local packaging companies mostly

focus mid-range to low-end

products, so their demand for high-

end POP is low

POP

• One of the fastest-growing

tougheners

• China’s urbanization rate is

estimated to exceed 60% by 2020,

which will greatly boost the

construction of infrastructures

and promote demand in energy,

automobiles, home appliances,

building materials and food

segments

• Food packaging industry will see 6%

CAGR in the period

• Industrial packaging industry will

grow at 7% CAGR

Challenges Opportunities



张松臣 Shawn Zhang

China National Chemical Information Center

中国化工信息中心

Tel: +86 10 6443 7115

Mobile: +86 182 0100 7069

[email protected]

http://www.chemconsulting.com.cn

CNCIC Consulting

中国化信 · 咨询

© 2019 CNCIC Consulting. All rights reserved 24



Documents

Market Opportunity of Polyolefin Elastomer & Plastomer for ... · Market Opportunity of Polyolefin Elastomer & Plastomer (POE & POP) in China by Shawn Zhang CNCIC May 17th, 2019 Only