Chem 1 -APIC Phenol Presentation May 2014
27
Phenol Asia’s Rising Capacity and Changing Trade Flow Trisha Huang Senior Editor, ICIS Pricing APIC Conference May 2014, Pattaya, Thailand
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Phenol-Acetone Market-Asia
Transcript of Chem 1 -APIC Phenol Presentation May 2014
Phenol Asia’s Rising Capacity and Changing Trade Flow
Trisha Huang
Senior Editor, ICIS Pricing
APIC Conference
May 2014, Pattaya, Thailand
www.icis.com
Agenda
Phenol / Acetone
• Rising Asian capacity led by China
• Phenol supply/demand
• Acetone supply/demand
• Prices and margins
Bisphenol A (BPA)
• Capacity expansion
• Prices and margins
Potential Market
• India
• Supply/demand
www.icis.com
China: High phenol/acetone import dependency until 2010
365kt
489kt
0%
10%
20%
30%
40%
50%
60%
70%
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
2005 2006 2007 2008 2009 2010 2011 2012 2013
Phenol Import Volume Acetone Import Volume
Phenol Import Reliance Acetone Import Reliance
MT/Year
Source: ICIS China
www.icis.com
Asian Phenol/Acetone capacity May 2014
Unit: metric tonnes/year Phenol Acetone Note
Asia excluding China, India 3.43 million 2.02 million
China 1.65 million 1 million
Subtotal (May 2014) 5.08 million 3.02 million
Less plant closure (250kt) (90kt) Mitsui Chemicals, Sept 2014
2014 Expansion 1 million 600kt
Total by end 2014 5.83 million 3.53 million
2015 Expansion 550kt 335kt
www.icis.com
Phenol/Acetone capacity expansion 2014-2017
Company Location Country Phenol
(kt/year) Acetone (kt/year)
Start-up
Sinopec Yanshan Beijing China (+) 125 (+) 75 Q3 2014
Kingboard Huizhou China (+) 75 (+) 45 Q3 2014
Sinopec Mitsui (SSMC) Caojing, Shanghai China 250 150 Q3 2014
FCFC Ningbo, Zhejiang China 300 180 Early Q4 2014
Cepsa Caojing, Shanghai China 250 150 Q4 2014
Kumho Yeosu South Korea 300 180 H2 2015
PTT Phenol II Map Ta Phut Thailand 250 155 Q4 2015
Ineos Nanjing, Jiangsu China 400 250 End 2016
CNOOC Huizhou Huizhou, Guangdong China 220 130 2016/2017
PTT Map Ta Phut Thailand (+) 50 (+30) Q2 2017
2.22 million 1.35 million
www.icis.com
China’s phenol import dependency may slump further
594kt
365kt
0
20
40
60
80
100
2005 2006 2007 2008 2009 2010 2011 2012 2013
10 kt/Year China imported 365kt
of phenol in 2013, down by 39% from
2012
Sources: ICIS China, China Customs
China’s 2014 phenol imports may decline by 45% from 2013 (ICIS China)
www.icis.com
China’s slowing phenol apparent demand growth
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2,000,000
2005 2006 2007 2008 2009 2010 2011 2012 2013
Phenol Import Volume
Phenol Output
Phenol Apparent Demand
MT/Year
1.65m 1.73m
China’s phenol apparent demand growth may slow to 1-1.5% in 2014
Sou
rces: ICIS C
hin
a, Ch
ina C
usto
ms
www.icis.com
China’s acetone import dependency may fall further
690kt
489kt
0
20
40
60
80
100
2005 2006 2007 2008 2009 2010 2011 2012 2013
10 kt/Year
China imported 489kt acetone in
2013, down by 29% from 2012
China’s 2014 acetone imports may fall by 14% from 2013 (ICIS China)
Sources: ICIS China, China Customs
www.icis.com
China’s acetone apparent demand growth also slowing
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
2005 2006 2007 2008 2009 2010 2011 2012 2013
Acetone Import Volume
Acetone output
Acetone Apparent Demand
MT/Year
1.34m 1.4m
Source: ICIS China
China’s acetone apparent demand growth may slow to 1-1.5% in 2014
www.icis.com
Phenol/Acetone margins squeezed on slowing demand, prompting
producers to reduce plant op rates
-$400
-$200
$0
$200
$400
$600
$800
$0
$500
$1,000
$1,500
$2,000
$2,500
Jun 2009 Jun 2010 Jun 2011 Jun 2012 Jun 2013
Margin Benzene FOB Korea * Propylene CFR NE Asia Phenol CFR China Acetone CFR China
Unit: USD/tonne
Source: ICIS Pricing
Margin
www.icis.com
China’s phenol/acetone plant op rates fall
50%
60%
70%
80%
90%
100%
110%
120%
0
20
40
60
80
100
120
140
160
180
2006 2007 2008 2009 2010 2011 2012 2013
KT/year
Capacity Output
Average plant op rate
Source: ICIS China
2013 ave op rate:
83%
www.icis.com
Phenol margins largely negative since 2011
-$400
-$200
$0
$200
$400
$600
$800
$0
$500
$1,000
$1,500
$2,000
$2,500
Jun 2009 Jun 2010 Jun 2011 Jun 2012 Jun 2013
Phe Margin
Benzene FOB Korea *
Phenol CFR China
Margin
Unit: USD/tonne
Source: ICIS Pricing
www.icis.com
But lower plant op rates boost acetone margins
-$250
-$200
-$150
-$100
-$50
$0
$50
$100
$150
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
Jun 2009 Jun 2010 Jun 2011 Jun 2012 Jun 2013
Acetone Margin
Propylene CFR NEAsia
Acetone CFR China
Margin
Unit: USD/tonne
Source: ICIS Pricing
www.icis.com
Phenol import parity largely negative since 2011 60-70% of phenol/acetone producers in China base their prices on Sinopec pricing
USD/tonne
-$250
-$200
-$150
-$100
-$50
$0
$50
$100
$150
$200
$250
$300
$0
$500
$1,000
$1,500
$2,000
$2,500
Jan 2010 Jan 2011 Jan 2012 Jan 2013 Jan 2014
Difference ICIS Phenol CFR CMP Phenol import parity
Source: ICIS Pricing
www.icis.com
Acetone import parity increasingly volatile
USD/tonne
-$100
-$50
$0
$50
$100
$150
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
Jan 2010 Jan 2011 Jan 2012 Jan 2013 Jan 2014
Difference ICIS Acetone CFR CMP Acetone Import Parity
Source: ICIS Pricing
www.icis.com
BPA capacity expansion 2014-2015 By end 2014, 725kt/year of new BPA capacity to consume 630kt/year of phenol and 210kt/year of acetone
Capacity
(kt/year)
Nanya Plastics Ningbo, Zhejiang 150 End 2014
Changchun Plastic Jiangsu 135 End 2014
Shandong Lihuayi Shandong 120 2014
Sinopec-Sabic Tianjin Tianjin 200 2014
Kingboard Yangzhou, Jiangsu 120 2014
Subtotal (end 2014) 725
Sinopec-Mitsui (SSMC) Shanghai 150 2015
Bayer Shanghai Shanghai 200 2015
1.08 m
Company Location Start-up
Total (2014-2015)
www.icis.com
BPA margins under pressure
-$400
-$300
-$200
-$100
$0
$100
$200
$300
$0
$500
$1,000
$1,500
$2,000
$2,500
Jan-2012 Jul-2012 Jan-2013 Jul-2013 Jan-2014
USD/TONNE USD/TONNE
BPA Margin Benzene FOB Korea Phenol CFR China Bisphenol A CFR China
Source: ICIS Pricing
www.icis.com
India: Phenol and acetone stats
• India needs to import around 80% of the phenol & acetone it consumes
• No domestic capacity expansion planned in the immediate future
• Indian local phenol prices tend to follow international (China) trends
• Domestic benchmark price: ex-tank, Kandla port (more than 90% of
phenol imports are discharged at Kandla, west coast of India)
• Usually prices are based on CIF + Basic Customs Duty + Costs = Import
Parity Basis
Producers Location Phenol Capacity
(kt/year) Acetone Capacity
(Kt/year)
Hindustan Organic Chemicals
Kochi (Southwest India) 42 25
SI Group India Ltd Navi Mumbai (West
India) 37 21
www.icis.com
India phenol prices tend to follow China prices
-$100
-$50
$0
$50
$100
$150
$200
$0
$500
$1,000
$1,500
$2,000
$2,500
Jan-2010 Jan-2011 Jan-2012 Jan-2013 Jan-2014
India vs China
ICIS CFR India
ICIS Phenol CFR CMP
USD/tonne
Source: ICIS Pricing
www.icis.com
India: Rising phenol import volume
0
50,000
100,000
150,000
200,000
250,000
2008 2009 2010 2011 2012 2013
Phenol import volume (MT)
Between 2011 and 2013, India’s phenol import volume rose by 18-19% year on year So
urce: M
inistry o
f Co
mm
erce
www.icis.com
India: Rising acetone import volume
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
2008 2009 2010 2011 2012 2013
Acetone import volume (MT)
Sou
rce: Min
istry of C
om
merce
Between 2011 and 2013, India’s acetone import volume rose by about 10% year on year
www.icis.com
India: ADDs and duties determine product flow In 2012, the US was the top supplier of phenol to India, accounting for 57% of imports
Top 7 phenol suppliers to India by country in 2012. Source: the Ministry of Commerce
United States
Taiwan
South Africa
South Korea
Thailand
Brazil
Finland
S Africa 8%
Thailand5.6%
United States 57%
Taiwan 20%
South Korea 6%
www.icis.com
In 2013, Taiwan was the top supplier of phenol to India, overtaking the US and accounting
for 29% of imports.
India: ADDs and duties determine product flow
United States
Taiwan
South Africa
South Korea
Thailand
Singapore
NetherlandsTaiwan 29%
United States 23%
Thailand 10%
Singapore 6%
South Africa 9%
Top 7 phenol suppliers to India by country in 2013. Source: the Ministry of Commerce
South Korea
17%
www.icis.com
India’s phenol imports may catch up with China in 2014
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
2008 2009 2010 2011 2012 2013 2014 (Est)
India China
Unit: MT
www.icis.com
India’s acetone imports outpaced by China
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
2008 2009 2010 2011 2012 2013 2014 (Est)
India China
Unit: MT
www.icis.com
Conclusion
• Phenol to remain in oversupply in the next three years,
as phenol capacity expansion outpaces downstream
capacity increase
• Asian phenol makers’ margins to stay squeezed
• Asia’s phenol/acetone plant op rates to stay low on poor
economics; older plants may be idled
• Phenol exports from China may increase
• Exporters to target growing markets such as India
www.icis.com
Thank you
Trisha Huang
Tel: +61 3 9602 6304
With contribution from the ICIS China Team
