Post on 08-Jul-2020
12th March 2019PX team, Aromatic Chemicals Dept. Mitsubishi Corporation
PX Market Presentation
Outlook - Polyester Market & Trails of growth
2
Source︓IMF
Proprietary and Confidential
Population of China & developing Asian countries is more than 50% in World.Especially, China impact is still big and Growth will keep 1% every year.
Population Growth
Population Growth
Unit︓Millions
3Proprietary and Confidential
Yearly Growth FY‘91〜’18 FY’19〜’27Forecast
World 1.5 % 3.8%Emerging and
developing Asia 1.3 % 0.9%
China 0.7 % 1.1%
Source︓IMF
Proprietary and Confidential
GDP Growth of China & developing Asian countries is higher than World Average.In Future, the trend is also same and GDP growth will keep high level.
GDP Growth
GDP GrowthUnit︓Billions
4Proprietary and Confidential
Yearly Growth FY‘91〜’18 FY’19〜’27Forecast
World 3.6 % 3.8%Emerging and
developing Asia 7.6 % 6.4%
China 9.5 % 6.1%
Source︓Japan Chemical Fibers Association、PCI Wood Mackenzie、IHS
Proprietary and Confidential
Growth of Cotton has limitation due to limited cropland and weather effect.Polyester is grown by covered demand of fiber, then Polyester made higher growth among all fiber.
World Fiber Production
World Fiber Production
Polyester
Cotton
ForecastUnit︓KT
5Proprietary and Confidential
YearlyGrowth FY‘91〜’18 FY’19〜’27
ForecastAll Fiber 3.3 % 4.5%Polyester 6.8 % 5.7%Cotton 1.2 % 0.9%
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Production of Polyester Fiber by country
Japan
China
Korea
Taiwan
ASEAN
India
West Europe
USA
6
With the rising of the labor cost in the past, fiber industries had changed a manufacturing base from Europe, Japan, Korea and Taiwan to China. And China had developed domestic and external demand with their competitive labor power.
Production of Polyester Fiber by country
Proprietary and Confidential
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Production of Polyester Fiber by Country except PR.China
Japan
Korea
Taiwan
ASEAN
India
West Europe
USA
Unit: KT Source︓PCI
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Production of PET by countryexcept PR.China, Europe & North America
Japan
Korea
Taiwan
ASEAN
India
South America
Middle East
7
Production of PET by country China and India which has a huge domestic demand are developing dramatically in PET industry which is capital intensive and isn’t influenced the difference of labor cost so much.
Proprietary and Confidential
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Production of PET by country
Japan
China
Korea
Taiwan
ASEAN
India
South America
Europe Union
North America
Middle East
Unit: KT
Source :PCI
China Polyester Fiber and PET Production
8
[UNIT: KTA]China Polyester Production surged drastically from 2017 due to “Good real estate sales”, ”Expansion of apparel sales through online shopping” , “Ban of wasted plastic impact”.
■Polyester Fiber
■PET (KT)
Source: CCFEI
(KT)
China Export Amount (Mil USD)
2015 2016 Growth 2017 Growth 2018 Growth
Fiber&Textile 108,954 104,599 -4.0% 109,215 4.4% 119,098 9.05%
Apparel 174,631 158,178 -9.4% 157,490 -0.4% 157,663 0.11%
2015 2016 Growth 2017 Growth 2018 GrowthQ1 6,682 6,507 -2.6% 7,903 21.5% 8,689 9.9%Q2 7,483 7,978 6.6% 8,405 5.4% 9,936 18.2%Q3 7,293 7,464 2.3% 8,731 17.0% 9,910 13.5%Q4 7,383 8,240 11.6% 9,275 12.6% 9,560 3.1%
Total 28,841 30,189 4.7% 34,314 13.7% 38,095 11.0%
2015 2016 Growth 2017 Growth 2018 GrowthQ1 1,455 1,569 7.8% 1,496 -4.7% 1,740 16.3%Q2 1,565 1,659 6.0% 1,706 2.8% 1,922 12.7%Q3 1,403 1,605 14.4% 1,864 16.1% 1,902 2.1%Q4 1,294 1,456 12.5% 1,720 18.1% 1,950 13.4%
Total 5,717 6,289 10.0% 6,786 7.9% 7,515 10.7%
Proprietary and Confidential
Spread = Polyester Price (CCF) - Raw Material Cost ( PTA x 0.865+ MEG x 0.345) – Conversion Cost
■ PTA/ MEG Price AssumptionPTA : CCF/CCFEI/ Chemease Avg. + SHIBOR+1% ( p.a.)MEG : SINOPEC x 99.2% ( estimated discount )
■Conversion Cost ( Min. Spread RMB/MT)FDY・POY = 1,000RMB/MT, PSF = 800RMB/MT PET = 600RMB/MT
Proprietary and Confidential
Polyester Economics in China
9
Polyester enjoyed profit from end of 2016, it encourage more polyester expansion in PR.China now.
Sudden CrudePrice Drop
10
Source:Mitsubishi Corporation
Proprietary and Confidential
Polyester Expansion Project Plan UpdateThere are several Polyester Expansions mainly in China.
Polyester Filament Yarn Unit : KMTA Polyester Staple Fiber Unit : KMTA
Year Company Location TimingExpansion
Remark Year Company Location TimingExpansion
RemarkCapacity 2018 2019 2020 2021 Capacity 2018 2019 2020 2021
2018 Xinfengming(Zhongshi) China Mar 300 200 100 2018 Yida (旧翔盛) China Apr 400 267 133 Restart
Bhilosa India Mar 160 120 40 Huaxi Group Bao Chang China May 100 67 33
Tongkun China May 600 400 200 Huahong (華宏) China Jun 150 75 75
Bhilosa India May 365 213 152 Bhilosa India Jul 146 73 73
Jiangsu Silk China Jun 100 50 50 Huaxi Group Bao Chang China Q4 100 8 92
Rongsheng(旧賜富) China Jun 300 150 150 Restart 2019 Yizheng(Sinopec) China Q1 100 75 25
Zhejiang Yijing(旧紅山) China Q2 650 325 325 Restart Jiangsu BluePeacock China Q1 60 45 15
Xinfengming(Zhongshi) China Jul 300 150 150 HUVIS China Q1 60 45 15
Fujian Shanli China Jul 250 125 125 Zhejiang Ningbo Dafa China Q3 80 40 40
浙江物産(旧翔盛) China Aug 360 150 210 Restart 2020Fujian Yimian (Hengyi
Group)China End 500 0 500
Shenghong China Sep 250 83 167 Chengxing China ? 1,200 600 600
Fujian Jingwei China Q3 250 63 188 Yisheng Dalian China ? 600 300 300
Xinfengming(Zhongxin) China Q4 300 25 275 Delay World (New Capacity) 490 611 995 1,400 3,496
2019 Jiangsu Lixin China Q2 80 60 20
Filatex India Q2 210 158 53 PET Unit : KMTA
Tongkun China June 1,000 175 825
Year Company Location TimingExpansion
RemarkTongkun China Aug 300 125 175 Capacity 2018 2019 2020 2021
Wuxi Huaya China Q3 200 67 133 2018 Neo Lithania May 200 117 83
Changle Lifeng Textile China Q3 200 67 133 Chengxing China May 600 350 250
Xinxin China Q1 180 135 45 FET Vietnam #1 Vietnam Sep 400 133 267
Hengli China June 1,000 500 500 EIPET Egypt Oct 540 135 405
2020 SASA Turkey Q3 200 100 100 Leading Vietnam Oct 70 18 53
Baihon Vietnam Q3 250 125 125 2019 Yisheng Dalian China Aug 600 250 350
Hengli China Q3 1,000 500 500 Baihon Vietnam Q3 250 83 167
Tianyuan (Kings Grp) China Q3 500 250 250 2020 FET Vietnam #2 Vietnam ? 400 200 200
Hailida China Q3 200 100 100 Ex-M&G at Corpus Christi,
TXUSA ? 1,100 550 550
World (New Capacity) 2,054 3,417 2,959 1,075 9,505 World (New Capacity) 753 1,391 1,267 750 4,160
Summerization Unit : KMTA
2018 2019 2020 2021 TOTALFilament 2,054 3,417 2,959 1,075 9,505
Staple 490 611 995 1,400 3,496
PET 753 1,391 1,267 750 4,160
TOTAL 3,296 5,419 5,221 3,225 17,161
PTA Expansion Project Plan Update
11
Many PTA expansions are scheduled from 2018-2020. Then PX demand would keep to increase continuously.
ExpansionCapacity 2018 2019 2020 2021 2022 2023
2016 BP Geel Belgium Q1 100 Effective Capacity IncreasedHangbang #2 China Apr 2,200 Invista, PET1,200KTA
2017 Indorama Netherland Q2 375 94 De-Bottle (250→625)Shenda (Petro China) China Q3 1,200 600 Status UnclearOPTC (L3) Taiwan Q4 1,500 1,125 PET400KTA in Vietnam (2H 2018)OPTC(T9) Taiwan Q4 -400 -300 Fuhua (ex. Xianglu) China Q4 2,250 1,688 Half line re-started Tongkun #2 China end Dec 2,200 2,017 Invista
2018 Indorama Portugal Jul 750 375 375 Re-Started (Ex Artland)2019 Fuhua (ex. Xianglu) China Jan 2,250 2,063 188 Re-Start Target
Xinfengming #1 China Oct 2,500 625 1,875 BP licenseHengli #4 China Q1 2,500 1,875 625 Invista. Same timing as Refinery?Yisheng (Zhejiang) China mid 5,500 2,750 2,750 Location is next to Zhongjin Petro.ex-JBF India mid? 1,200 300 300 BP (ISOX2) / start up timing is unclearBillion #1 China End 2,500 200 2,300 Pipeline connected with FREPXinfengming #2 China End 2,500 200 2,300
2021 Corpus Christi Polymer USA 2H 1,300 650 650 Corpus Christi, TX / PET1,100KTA2022 TONGKUN China 2,400 2,400 FDY:90万/ POY:150万2023 BP & SOCAR Turkey 1,250 625 PX:840KT
Unknown Tongkun #3 China 5,000 Rudong in Jiangsu ProvinceXinjiang Zhongtai China 1,200FENC/Sinopec Yizheng China 1,300Shenghong#3 China 2,500 BP Tech?Rongsheng(Ningbo)#2 China 2,500Hengli #5 China 2,500 InvistaFCFC (Ningbo) #2 China mid 1,500 750 750Baihong China 2,400Huabin China 2,200MCPI #3 India 1,200Oman Oil Oman 1,100 BP license
5,598 3,063 7,388 9,675 3,800 625as PX 3,695 2,021 4,876 6,386 2,508 413
Remark
World Total
Year Company Country TimingYearly Increment of Effective Capacity
2020
Big Change to PX market from PR.China
12
PX Expansion Project Plan Update
13
[UNIT: KTA]There are many PX expansion plans in the world, especially in China. However more details of these projects will be required to clarify starting timing ( ex. Government approval, Finance, Feed, Technology etc.)
[Unit : KT]
ExpansionCapacity 2018 2019 2020 2021 2022 2023
2017 Reliance #4 India Q2 2,250 563 CDU integrated
Hanwha Total Korea Q2 200 100 Expansion of Reformer
2018 Petro Rabigh Saudi Arabia end Mar 1,300 975 325 CDU integrated
Nghi Son Refinery Vietnam end Jun 700 350 350 CDU integrated
Dragon Aromatics China Dec 1,600 67 1,533 Re-Starting target
Atyrau Oil Kazakhstan Dec 470 470 Status Unclear
2019 Hengli Petrochemical (Dalian) China 1H 4,300 2,150 2,150 Official Start-up Timing is the End of 2018.
Hainan (Sinopec) #2 China Jul 1,000 500 500 No CDU expansion.
Zhejiang PC (Zhoushan) #1 China 2H 4,000 1,000 3,000 CDU Integrated(400KBD). Official Start-up Timing is Oct 2018.
2020 Hengyi Brunei Brunei 1H 1,500 1,500 CDU integrated (160KBD). Official Start-up Timing is Apr 2019.
Aramco / Jizan Saudi Arabia Q2 1,000 500 500 CDU integrated (240KBD). Official Start-up Timing is Q2 2019.
2021 Sinochem Quanzhou China 1H 800 400 400 CDU (240KBD+ Add. 60KBD(2018))
2022 Motiva USA 2H 2,000 1,000 1,000 Aramco
2023 BP & SOCAR Turkey 840 420
Shenghong China 2,800 1,400
Unknown Sinochem Hongrun China 1,000 Construction was supended due to no NDRC approval.
KIPIC Kuwait 1,400 Al Zoor Refinery (600KBA) Aroma#2
Zhongjin Petrochemical #2 China 2,000 No NDRC approval yet.
Aramco/China North Industries China 1,600 No NDRC approval yet.
CNOOC Ningbo Daxie China 1,600 No NDRC approval yet.
CNOOC-Kings Huizhou China 960 No NDRC approval yet.
IRPC Thailand 900 Under feasibility study. Target is 2H 2022?
Zhejiang PC (Zhoushan) #2 China 4,000 Rongshen51%/Tongkun20%/Zhejiang Province29%
PDVSA/CNPC China 2,600 CDU integrated (240KBD)
IOC Paradip India 1,200
Noga(Aroma Production Complex) Bahrain 1,400
ADNOC/Takreer UAE 1,400
Dongyin Lianhe Petro. China 2,000 No NDRC approval yet.
Fujia Gulei China 4,000 No NDRC approval yet.
Xuyang Group China 2,000 No NDRC approval yet.
Hebei Yihong Petro. China 3,000 No NDRC approval yet.
Hebei Xinhua Lianhua Petro. China 4,000 No NDRC approval yet.
2,054 6,828 6,150 1,500 1,400 3,220
Remark
World Total
Year Company Country Timing Yearly Increment of Effective Capacity
14
China Refinery and PX Expansion ProjectsAlthough many projects is announced, limited projects are permitted by NDRC (National Development and Reform Commission) as of now due to the severe restrictions on PX projects. There is also petroleum products demand bottleneck.(KT)# Project Place NDRC Remarks Timing CDU Gasoline Diesel PX1 SINOPEC Luoyang Luoyang, Hebei 〇 Under Construction 2019 1H 2,000 418 576 02 Zhejiang Petro.#1 Zhoushan, Zhejiang 〇 Under Construction 2019 2H 20,000 3,500 2,500 4,0003 Hengli Petro. Dalian, Liaoning 〇 Under Construction 2019 2H 20,000 4,600 1,610 4,5004 SINOPEC Hainan#2 Haikou, Hainan 〇 Under Construction 2019 2H 8,000 1,672 2,304 1,0005 SINOPEC Zhongke Zhanjiang, Guangdong 〇 Under Construction 2019 2H 10,000 2,090 2,880 06 SINOCHEM Quanzhou Quanzhou, Fujian 〇 Purchased Equipments. 2022 2H 3,000 627 864 8007 Shenghong Petro. Lianyungang, Jiangsu × Trying to get NDRC approval by Oct.'18. 2022- 16,000 2,700 2,550 2,8008 Zhejiang Petro.#2 Zhoushan, Zhejiang ? 2022- 20,000 3,500 2,500 4,0009 Zhongjin Petro.#2 Ningbo, Zhejiang × Lack of CO2 emission allowances. 2022- 0 0 0 2,000
10 Aramco/China North IndustriesPangjing, Liaoning × MOU concluded in Mar '17 when Saudi King visited China. 2022- 15,000 3,135 4,320 1,60011 SINOCHEM Hongrun Dongying, Shandong × Construction suspended due to lack of NDRC approval. 2022- 0 0 0 1,00012 CNOOC Daxie Petro. Daxie, Zhejiang × Negotiating with NDRC. 2022- 0 0 0 1,60013 CNOOC Huizhou#2 PX Huizhou, Guangdong × Under Study. 2022- 0 0 0 1,50014 PDVSA/CNPC Jieyang, Guangdong 〇 2022- 20,000 4,180 5,760 2,60015 Dongying Lianhe Petro. Dongying, Shandong × Negotiating with NDRC. 2025- 0 0 0 2,00016 SINOPEC ZRCC#2 Ningbo, Zhejiang × 2025- 12,000 2,508 3,456 1,00017 SINOPEC Yanzi#2 Nanjing, Jiangsu × 2025- 14,500 3,031 4,176 018 SINOPEC Shanghai#3 Pinghu, Zhejiang × 2025- 0 0 0 019 Fujia Gulei Gulei, Fujian × 2025- 20,000 4,180 5,760 4,00020 Xuyang Group Caofeidian, Hebei × Negotiating with NDRC. 2025- 20,000 4,180 5,760 021 Hebei Yihong Petro. Caofeidian, Hebei × 2025- 15,000 3,135 4,320 3,00022 Middle East Gulf Investment Caofeidian, Hebei × 2025- 15,000 3,135 4,320 023 Hebei Xinhua Lianhua Petro. Caofeidian, Hebei × 2025- 20,000 4,180 5,760 4,000
Total 250,500 50,771 59,416 41,400
Probability Gasoline Diesel PXHigh 15,607 13,284 13,100
Middle 6,635 6,820 11,700Low 28,529 39,312 16,600
Change of PX Feedstock
15
[UNIT: KTA]
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
1990 1995 2000 2005 2010 2015 2020(Capacity)
Crude Oil Condensate HVN MX Fuel Oil Gas Oil
Strong Polyester demand encourage to produce more PX, but production cost & investment cost is changed with different feedstock.
48%
40%
26% 16%
12%
5%
< Other factors > ■ Demand of Petroleum Products ( ex. Gasoline , Diesel etc. ) ■ IMO regulations ■ Requirement for Environmental measures
Challenged by ProjectsIn PR. China
Ex.) Configuration of Chinese Project
400,000 B/D
20,000KTA
Reformer 9,600KTA
Diesel HydrocrackingUnit 6,000KTA
Heavy OilHydrocracking Unit 11,500KTA
Paraxylene 4,300KTA
PX / Crude % 22%
CDU Capacity
16Proprietary and Confidential
China PX Supply/Demand Case 1 ( Short Term )
Premise:1. Additional PX capacity comes on stream as per the table below.2. Demand growth is 6.0%.
(14,438)
(15,900)
(13,724)(11,715)
(13,529)
(20,000)
(10,000)
0
10,000
20,000
30,000
40,000
2017 2018 2019 2020 2021
S/D Balance PX Production PX DemandKTA
Project PX Capacity TimingDragon 1,600 2018 EndSINOPEC Hainan#2 1,000 2019 2HZhejiang Petro.#1 4,000 2019 2HHengli Petro. 4,300 2019 2HSINOCHEM Quanzhou 0 2022 2HTotal 9,300
17
Premise:1. Additional PX capacity comes on stream as per the table below.2. Demand growth is 6.0%.
China PX Supply/Demand Case 2 ( Short Term )
Proprietary and Confidential
Project PX Capacity TimingDragon 1,600 2018 EndSINOPEC Hainan#2 1,000 2019 2HZhejiang Petro.#1 4,000 2020 1HHengli Petro. 4,300 2020 1HSINOCHEM Quanzhou 800 2022 2HTotal 10,100
(14,438)
(15,900) (17,044)
(11,715)(13,529)
(20,000)
(10,000)
0
10,000
20,000
30,000
40,000
2017 2018 2019 2020 2021
S/D Balance PX Production PX DemandKTA
18
Even in the worst case, China PX import volume will maintain above 10mil MT.China PX Supply/Demand Case 1 ( Middle Term )
Premise:1. Additional PX capacity comes on stream as per the table below.2. Demand growth is 6.0% on the assumption that that China keep taking 90% of the world demand growth.
(14,438)(15,900)
(11,715)
(23,78B)
11,009
21,480
30,3B0
2B,909
3B,010
54,14B
(30,000)
(20,000)
(10,000)
0
10,000
20,000
30,000
40,000
50,000
B0,000
S/D Balance PX Production PX DemandKTA
Project PX Capacity TimingDragon 1,600 2018 EndSINOPEC Hainan#2 1,000 2019 2HZhejiang Petro.#1 4,000 2019 2HHengli Petro. 4,300 2019 2HSINOCHEM Quanzhou 800 2022 2HShenghong Petro. 2,800 2023 2HZhongjin Petro.#2 2,000 2023 2HSINOCHEM Hongrun 1,000 2023 2HZhejiang Petro.#2 4,000 2025 2HAramco/China North Industries 1,600 2026 2HCNOOC Daxie Petro. 1,600 2028 2HCNOOC Huizhou#2 PX 1,000 2029 2HTotal 25,700
Thank you
19