Aromatics Update - ptq.pemex.com · Chlorobenzene, 1% Cumene, 19% Cyclohexane, 11% Ethylbenzene,...

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Foro PEMEX Petroquimica – Junio 2011Singapore Shanghai Houston New York London Düsseldorf Dubai

Aromatics Update

FORO PEMEX Petroquimica 2011

Bangkok

Alex LidbackGlobal Business Director –

Aromatics & Fibers

Alidback@cmaiglobal.com

1 281 752 3288

acquired

IHS – Who We Are

We are 5,500 people, in 30 countries, speaking 50 languages –

all working each day to:

• Serve businesses and all levels of governments worldwide

• Ranging from 80% of Global Fortune 500 to small businesses

• Customers in 180 countries

• Provide comprehensive content, software and expert analysis

and forecasts

• Customers around the world use our products and services to make

faster and more confident decisions.

Advancing Decisions that Advance the World

IHS Capabilities

IHS is the leading information company with comprehensive content, insight and

expert analysis in key areas shaping today’s global business landscape, including:

Advancing Decisions that Advance the World

CMAI: Enhancing Our Country & Industry Forecasting Capability for the Chemical & Petrochemical Industry

Our Country & Industry Forecasting capability provides consistently accurate forecasts and analysis of the economic, business and investment climates in over 200 countries and over 170 industries to support strategic planning and decision making.

The combined products and services of the successful acquisitions of Cambridge Energy Research Associates, Global Insight, SRI Consulting, Harriman Chemsult and Chemical Week and now, CMAI, enhance this capability – giving customers access to solutions to navigate the complex business challenges they face every day, all from a single source: IHS.

Country & Industry Forecasting

CMAI: Enhancing Our Consulting Capability for the Chemical & Petrochemical Industry

Consulting Capabilities

At IHS, we leverage an unmatched combination of information, insight, and expertise to effect the powerful transformation of data into knowledge and value. Our combined capabilities empower you to solve your greatest strategic and operational challenges. It's what distinguishes IHS Consulting in the global marketplace and provides a greater, lasting value to your organization.

The combined products and services of the successful acquisitions of Cambridge Energy Research Associates, Global Insight, SRI Consulting, Jane’s, Lloyd’s Register Fairplay and now, CMAI, enhance this capability – giving customers access to solutions to navigate the complex business challenges they face every day, all from a single source: IHS.

Foro PEMEX Petroquimica – Junio 2011

Aromatics Topics

Aromatics demand growth

• How much?

• Where?

• Drivers?

Supply Sources

• Refineries

• Olefins units

• A key component for

most aromatics

Price Forecast

Benzene

Where is Benzene Consumed?

Alkylbenzene, 3%

Chlorobenzene, 1%

Cumene, 19%

Cyclohexane, 11%

Ethylbenzene, 52%

Maleic Anhyd., 2%

Nitrobenzene, 8%

Others, 3%

40.7 Million Metric Tons

North America,

South America,

2%West Europe,

Middle East, 6%

Northeast Asia, 40%

Southeast Asia, 5%

ROW, 6%

• Olefins production

• Refinery

operations

• Polyester market

• Hydrogen/reformer

operations

• Basically, not

benzene

Reformate/Refinery

Pygas/Olefins40%

Toluene Dispro.

Selective TDP4% Toluene

Transalk.5% PXE Co-prod

Coke Oven4%

What Drives Benzene Supply?

00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15

Crude (WTI) Natural Gas Gas as % of Crude

Lighter & Lighter & Lighter…….

For NAM Chemical Industry?U.S. Dollars Per MMBtu Gas as % of Crude BTU Basis

Light Feeds

Gas Oil Heavy

Naphtha

Propane EthaneLight

NaphthaNormal

Butane

Benzene Production Per Ton of

Ethylene

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

North America Benzene Production Suffers

Production Index 2005 = 100

merNaphtha

Hydrogen, 3%

C1s and C2s, 5%

C3s and C4s, 10%

C5s, 4%

C6+ Raffinate, 15%

BZE, 8%

TOL, 14%

MXY, 18%

C9+ Aromatics, 23%

Reformate

What Is a Reformer?

The Effects of MSAT on North

America

• Additional benzene

enters market in

• By 2013, a total of

600 thousand tons

• Helps offset loss in

production

• How does this affect

benzene imports?0

2010 2011 2012 2013 2014 2015

Thousand Metric Tons

MSAT – Mobile Source Air Toxins

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

North America Benzene Production Suffers

Production Index 2005 = 100

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Net Exports

Net Imports

Million Metric Tons

Benzene Net Trade

2010 2015

Trade Balances Supply and Demand

-1,171-1,439

234 87

-1,637

351 302

Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12

US Benzene Monthly Contract

Dollars Per Metric Ton Cents Per Gallon

Benzene: Elevated Prices Continue

Styrene

Polystyrene39%

Expandable PS

ABS Resins/SAN

Resins18%

S.B. Latex5%

S.B. Rubber4%

Unsat. PE Resins

4%All Others

N. America15%

S. America3%

Europe22%

CIS & Baltics1%

Africa/Middle East2%

Indian Subc.2%

NE Asia50%

SE Asia5%

26.3 Million Metric Tons

Where is Styrene Consumed?

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Americas Europe Middle East Asia World

Million Metric Tons

Shutdowns Offsetting

Capacity Additions

Styrene Capacity Expansions

Average Demand

Oversupply in 2010

Expansion Slow

Simplified Map Of Consolidation

Americas

Styrenics

BASFNovaBPDow

Styron/Trinseo

StyrolutionInnovene

Ineos IneosNova

Styrolution

Spin Off Spin Off Spin Off

Styrenics

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Demand (1.6/3.7) Total Capacity (2.6/1.8) Operating Rate

WorldOperating RateMillion Metric Tons

Styrene Balances Starting To Improve

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Production (-3.9/2.1) Domestic Demand (-4.1/0.4)

Total Capacity (-3.9/0.0) Operating Rate

Million Metric Tons Operating Rate

(% AAGR = 05-10/10-15)

North America

Styrene Supply & Demand

Mexico’s Styrene Net Imports

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12

Prod Cash Cost EB/SM Styrene Price

U.S. Styrene Prices & EconomicsDollars Per Ton

Toluene

STDP/TPX22%

Benzoic Acid1%

Solvents/Others18%

Gasoline27%

Domestic Demand = 28.9 Million Metric Tons

2011 World Toluene Demand by End Use

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Americas Europe

Middle East & Africa Asia

Avg. Demand Growth for (08-13) World Avg. Operating Rate

World Toluene Capacity AdditionsMillion Metric Tons Operating Rate, Percent

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

N. America S. America Europe

CIS & Baltics Africa/Middle East Indian Subc.

NE Asia SE Asia

Regional Toluene Net Trade

Net Exports

Net Imports

Million Metric Tons

Mixed Xylenes

Ethylbenzene0.13%

Paraxylene78%

Metaxylene1%

Orthoxylene8%

Solv. & Others13%

Domestic Demand = 43.4 Million Metric Tons

2011 World Mixed Xylenes

Demand by End Use

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Americas Europe

MDE/AFR Asia

Avg. Demand Growth for (10-15) Operating Rate

Million Metric Tons Operating Rate, Percent

World Mixed Xylenes Capacity

Additions

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Paraxylene (-1.6/3.0) Metaxylene (-3.5/1.5)Orthoxylene (-12.0/1.7) Solv. & Others (-0.5/0.5)Operating Rate

Million Metric Tons Operating Rate

North America Mixed Xylenes

Demand Forecast

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

N. America S. America EuropeCIS & Baltics Africa/Middle East Indian Subc.NE Asia SE Asia

Million Metric Tons

Regional Mixed Xylenes Net Trade

Net Exports

Net Imports

Jan-2009 Jan-2010 Jan-2011 Jan-2012

Toluene (Octane Blend Value) Mixed Xylenes - Contract

Toluene Commercial Grade

Cents Per Gallon

T & X Price Forecast

Fiber62%

PET Resin (Rigid

Packaging)31%

Oriented PET Film4%

Other3%

Polyethylene Terephthalate End Uses

16,262

33,924

2011 Total Demand = 54.0 Million Metric Tons

1990 1995 2000 2005 2010 2015

Fiber PET Packaging Resin Fiber to PET

Million Metric Tons Fiber to PET Ratio

Fiber Versus PET Packaging Resin

Squeezed Between Oil And Cotton

POLYESTER

OILOIL OIL OIL

02 03 04 05 06 07 08 09 10 11 12

Cotton Index / Futures Staple Fiber

Dollars Per Metric Tons

The Cotton Factor

-2,000

-1,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Filament Staple Fiber PET Packaging

World Polyester Demand Growth By ProductThousand Metric Tons

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Supply Effective CapacityDemand Operating RateEffective Operating Rate

Million Metric Tons Percent

Global PTA Supply/Demand

PTA – All Regions Increase Self-sufficiency

209 677145 417

-1,187

-171 -596 -115 -678

780 19

05 10 15

• Currently only PET– U.S. 325kt (PTA Supply from CEPSA)

– Mexico 550kt (PTA Supply from PetroTemex)

– Brazil 650kt (PTA Supply from PetroTemex)

• Announcement – mid 2014 Location TBA

– U.S. PET 1,000 kt

– PTA 1,200 kt to supply all U.S. assets

– Mexico and Brazil supply to remain

from PetroTemex

Impacts of M&G(2015 Perspective)

Total PET NAM Impact NAM PX Impact

NAM PET Growth 440 440 0

NAM Non-NAFTA Imports 400 300 175

C&SAM Non Americas Imports 550 250 145

Total 1390 990 320

PX Supply

• Net 320 kts demand increase for region

• Region will be at 90% OR by 2013

• Could likely squeeze an additional 100kt out of domestic production

• 220 kts shift in NAM net trade from net export to net import from Middle East production

• Could require more imports if BP/CEPSA/Suncor decide to rationalize.

• Fewer imports if new U.S. PX player from an existing MX player or new entrant.

• Fewer imports if BP starts up PX-1 at Decatur on merchant MX.

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

North America South America Europe

Africa/Middle East Indian Subcontinent Northeast Asia

Southeast Asia

Million Metric Tons

Net Exports

Net Imports

World Paraxylene Net Trade

Mexico’s PX Net Imports

-1,200

-1,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11

Direct Fixed Variable Feedstock PX Contract Margin

Dollars Per Metric Ton

Delivered Basis - Direct Plant Fixed Costs Only

United States PX Prices & Margins

Aromatics – Long Term Outlook• Favoring light olefin feedslates should continue to have a negative

impact on benzene supplies.

• Lower refinery runs in North America and West Europe reduces

aromatics production tightening supply/demand balances.

• Polyester demand continues at a healthy pace driven by

Asia…..mature markets should only see tepid growth.

• Extensive capacity rationalization and industry consolidation have

significantly changed market dynamics.

• The rapid run up in costs and pricing will keep prices elevated. If

prices rise more than currently forecast demand will likely suffer.

• Forecast high crude oil prices will keep prices of aromatics

polymers elevated.

• Asia has been the driver for demand growth and forecasts

suggests this will only continue.

Aromatics Update - ptq.pemex.com · Chlorobenzene, 1% Cumene, 19% Cyclohexane, 11% Ethylbenzene,...

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