Date post: | 07-Jul-2018 |
Category: |
Documents |
Upload: | sabapathi-rathina-kanagasabai |
View: | 220 times |
Download: | 0 times |
8/19/2019 2014 Ihs Aromatics and Fibre
http://slidepdf.com/reader/full/2014-ihs-aromatics-and-fibre 1/32
Fibers: Capacity ExplosionHurting Growth Prospects
ITMF Annual Conference, 2014Beijing, P.R. China
Ashish Pujari,Senior Director (Aromatics & Fibers)
IHS Singapore
8/19/2019 2014 Ihs Aromatics and Fibre
http://slidepdf.com/reader/full/2014-ihs-aromatics-and-fibre 2/32
Fibers Are Essential in Our Lives
8/19/2019 2014 Ihs Aromatics and Fibre
http://slidepdf.com/reader/full/2014-ihs-aromatics-and-fibre 3/32
Agenda
• Overview
• Cotton
• Polyester
• Nylon
8/19/2019 2014 Ihs Aromatics and Fibre
http://slidepdf.com/reader/full/2014-ihs-aromatics-and-fibre 4/32
Global Fiber Mix
Cotton, 29%
Polyester, 49%
Nylon, 5%
Olefin, 6%
Cellulosic, 5%
Acrylic, 3%
Wool, Silk &
Linen, 2%
Other SyntheticFibers, 1%
Cotton
Polyester
Nylon
OlefinCellulosic
Acrylic
Wool, Silk & Linen
Other Synthetic Fibers
2014 Total Fiber Demand:85.3 Million Metric Tons
8/19/2019 2014 Ihs Aromatics and Fibre
http://slidepdf.com/reader/full/2014-ihs-aromatics-and-fibre 5/32
World Total Fiber Consumption
Apparel55%
Industrial &Others
20%
HomeFurnishing,Rug/Carpets
25%
Apparel
Industrial & Others
Home Furnishing, Rug/Carpets
2014 Total Fiber Demand:85.3 Million Metric Tons
8/19/2019 2014 Ihs Aromatics and Fibre
http://slidepdf.com/reader/full/2014-ihs-aromatics-and-fibre 6/32
Fiber Demand Increases in Line with GDP
40
50
60
70
80
90
100
110
46 50 54 58 62 66 70 74 78 82 86
GDP (Billion 2010 $)
Thousands
F i b e r , M i l l i o n M
e t r i c T o n s
2010
2012
Total Natural and Man-Made Fibers
2000
Fibers Growth = 1.6 X GDP Growth
2016
2014
2018
8/19/2019 2014 Ihs Aromatics and Fibre
http://slidepdf.com/reader/full/2014-ihs-aromatics-and-fibre 7/32
Polyester Gaining Share at the Expenseof Others
0
10
20
30
40
50
60
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Percentage (%)
Polyester Cotton Nylon
8/19/2019 2014 Ihs Aromatics and Fibre
http://slidepdf.com/reader/full/2014-ihs-aromatics-and-fibre 8/32
Agenda
• Overview
• Cotton
• Polyester
• Nylon
8/19/2019 2014 Ihs Aromatics and Fibre
http://slidepdf.com/reader/full/2014-ihs-aromatics-and-fibre 9/32
Demand Growth Depends on CottonAvailability
-3
-2
-1
0
1
2
3
4
5
-8
-6
-4
-2
0
2
4
6
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
GDP Growth, %
Cotton Polyester Nylon Others GDP
Fibers, Million Metric Tons
8/19/2019 2014 Ihs Aromatics and Fibre
http://slidepdf.com/reader/full/2014-ihs-aromatics-and-fibre 10/32
Demand Continues to Lag Behind Supply
0
5
1015
20
25
30
2 0 0 3 / 0 4
2 0 0 4 / 0 5
2 0 0 5 / 0 6
2 0 0 6 / 0 7
2 0 0 7 / 0
8
2 0 0 8 / 0 9
2 0 0 9 / 1 0
2 0 1 0 / 1 1
2 0 1 1 / 1 2
2 0 1 2 / 1 3
2 0 1 3 / 1 4
2 0 1 4 / 1 5
Ending Stocks Consumption Production
Source: USDA, Forecast as of August-14
Million Metric Tons
8/19/2019 2014 Ihs Aromatics and Fibre
http://slidepdf.com/reader/full/2014-ihs-aromatics-and-fibre 11/32
High Cotton Inventory – Mainly in China expectedto put pressure on Cotton
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
0
5,000
10,000
15,000
20,000
25,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
China Inventory World Inventory Cotlook A
T h o u s a n d M e t r i c T o n s
A
I n d ex ( F ar E a s t S t ar t i n g2 0 0 8 / 2 0 0 9 )
8/19/2019 2014 Ihs Aromatics and Fibre
http://slidepdf.com/reader/full/2014-ihs-aromatics-and-fibre 12/32
Agenda
• Overview
• Cotton
• Polyester
• Nylon
8/19/2019 2014 Ihs Aromatics and Fibre
http://slidepdf.com/reader/full/2014-ihs-aromatics-and-fibre 13/32
Fibers Account For Around 60 percentof Total Polyester Demand
PET Resin31%
Staple16%
TextileFilament
42%
IndustrialFilament
4%
Film5%
OtherPolyester
2%
PET Resin
Staple
Textile Filament Industrial Filament
Film
Other Polyester
2014 Total Polyester Demand:60.8 Million Metric Tons
8/19/2019 2014 Ihs Aromatics and Fibre
http://slidepdf.com/reader/full/2014-ihs-aromatics-and-fibre 14/32
0
22
44
66
88
110
132
154
176
198
220
243
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
5,500
Jan-11 Sep-11 May-12 Jan-13 Sep-13 May-14 Jan-15 Sep-15
Cotton 'A' Index Staple Fiber
Dollars Per Metric Ton Cents Per Pound
Weak Cotton Will Create a Price Ceiling ForPolyester Staple
8/19/2019 2014 Ihs Aromatics and Fibre
http://slidepdf.com/reader/full/2014-ihs-aromatics-and-fibre 15/32
PSF Demand – Affected by Cotton Availability
0%
15%
30%
45%
60%
75%
90%
0
4
7
11
14
18
21
25
28
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
World Capacity World Demand World Op Rate
Million Metric Tons
3.5 3.2%3.0% 2.9%
3.7%10.5% 1.7% -1.6%0.6% 3.6%4.4
Operating Rate
PSF Demand has Rebounded in 2014
8/19/2019 2014 Ihs Aromatics and Fibre
http://slidepdf.com/reader/full/2014-ihs-aromatics-and-fibre 16/32
Filament Demand – Off from Peak but Stable
0%
10%
20%
30%
40%50%
60%
70%
80%
90%
0
10
20
30
40
50
60
70
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
World Capacity World Demand World Op Rate
Million Metric Tons
5.6%
7.0%7.4%6.8%7.5%15.8%
6.6%
4.8%
5.1%7.5%
6.7%
Operating Rate (%)
8/19/2019 2014 Ihs Aromatics and Fibre
http://slidepdf.com/reader/full/2014-ihs-aromatics-and-fibre 17/32
Provided No Further
Expansions
45
50
55
60
65
70
75
80
-2
0
2
4
6
8
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Million Metric Tons
Demand Growth Americas Europe
CIS & Baltic States Middle East/Africa China
Asia (exclude China) Operating Rate
Operating Rate (%)
Cyclic Upturn Soon
8/19/2019 2014 Ihs Aromatics and Fibre
http://slidepdf.com/reader/full/2014-ihs-aromatics-and-fibre 18/32
65
70
75
80
85
90
-4
0
4
8
12
16
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Americas EMEAAsia Excess CapacityWorld Demand Growth World Operating Rate
Million Metric Tons Operating Rate (%)
Conditions Worsen With More PX Capacity
8/19/2019 2014 Ihs Aromatics and Fibre
http://slidepdf.com/reader/full/2014-ihs-aromatics-and-fibre 19/32
19
50
60
70
80
90
100
-6.0
-3.0
0.0
3.0
6.0
9.0
12.0
2008 2010 2012 2014 2016 2018Global Demand Growth China India SubcontinentNEA net China SEA EuropeMiddle East & Africa N. America S. AmericaOperating Rate
Million Metric Tons Operating Rate (%)
PQS 640 KTAM&G 1.2 MMT
Lotte UK DAK US
Global PTA Capacity Growth
8/19/2019 2014 Ihs Aromatics and Fibre
http://slidepdf.com/reader/full/2014-ihs-aromatics-and-fibre 20/32
20
2013 2018
Capacity (MMT): 67 95
Number of Plants: 117 140
Average Plant Size(KMT):
567 675
To Achieve 85% Industry Utilization
Capacity to Rationalize (MMT): 9 20
Plant Size (KMT): <= 380 <= 520
Plants to Rationalize (#): 31 55
Demand (MMT): 49 64
Demand
Rationalize
Excess Capacity
Is Realistic Rationalization Possible?
8/19/2019 2014 Ihs Aromatics and Fibre
http://slidepdf.com/reader/full/2014-ihs-aromatics-and-fibre 21/32
© 2014 IHS, Inc. No portion of this presentation may be reproduced, reused, or
otherwise distributed in any form without prior written consent.
0
1
NAM
-10
SAM
-10
1
Europe
-3
-2
-1
0
MEA
-7
-6
-5
-4
-3-2
-1
0
China 0
1
2
3
45
6
7
NEA
01
2
SEA-2
-1
0
1
ISC
2010/2013/2018 NET IMPORT /EXPORT MILLION METRIC TONS
Diminishing PTA Trade
8/19/2019 2014 Ihs Aromatics and Fibre
http://slidepdf.com/reader/full/2014-ihs-aromatics-and-fibre 22/32
0
25
50
75
100
0
100
200
300
2008 2010 2012 2014 2016 2018
PTA Spread Over PX PTA Global Operating Rate
Dollars Per Metric Ton Operating Rate, %
85% OR
$125 Per Ton Spread
Asia PTA Spreads
8/19/2019 2014 Ihs Aromatics and Fibre
http://slidepdf.com/reader/full/2014-ihs-aromatics-and-fibre 23/32
Overbuilds Depress Profitability
0
50
100
150
200
250
300
0
500
1000
1500
2000
2500
3000
Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13
PET EXPORT PET POY PSF
Domestic, CNY Export, USD
8/19/2019 2014 Ihs Aromatics and Fibre
http://slidepdf.com/reader/full/2014-ihs-aromatics-and-fibre 24/32
Agenda
• Overview
• Cotton
• Polyester
• Nylon
8/19/2019 2014 Ihs Aromatics and Fibre
http://slidepdf.com/reader/full/2014-ihs-aromatics-and-fibre 25/32
Key Raw Materials for Nylon Fiber
Fiber & Plastics End Uses
AdipicAcid
Cyclohexane
Cumene
Phenol
Nylon 6
Cyclohexane
HMDA
Acrylonitrile
Adiponitrile Adiponitrile
Caprolactam
Nylon6,6
8/19/2019 2014 Ihs Aromatics and Fibre
http://slidepdf.com/reader/full/2014-ihs-aromatics-and-fibre 26/32
50
55
60
65
70
75
80
-0.4
-0.2
0.0
0.2
0.4
0.6
0.8
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
China Asia (Exclude China) Middle East
CIS & Baltics C. Europe/W. Europe Americas
Global Demand Growth Global Operating Rate
Million Metric Tons Operating Rate (%)
Additional Nylon 6 Capacity In Asia KeepsGlobal Operating Rate Down
26
8/19/2019 2014 Ihs Aromatics and Fibre
http://slidepdf.com/reader/full/2014-ihs-aromatics-and-fibre 27/32
Nylon 6,6 Chip Capacity Additions
27
30
40
50
60
70
80
90
-0.3
-0.2
-0.1
0.0
0.1
0.2
0.3
0.4
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
N. America W. Europe Middle East
NE Asia (Exclude China) China Demand Growth
Global Operating Rate
Million Metric Tons Operating Rate (%)
8/19/2019 2014 Ihs Aromatics and Fibre
http://slidepdf.com/reader/full/2014-ihs-aromatics-and-fibre 28/32
60
65
70
7580
85
90
95
-0.4
0.0
0.4
0.8
1.2
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Asia (Exclude China) China CIS & BalticsC. Europe/W. Europe Americas Global Demand GrowthGlobal Operating Rate
Million Metric Tons Operating Rate (%)
Healthy Margins Boost Asian CaprolactamInvestment, Slashing Operating Rates
28
8/19/2019 2014 Ihs Aromatics and Fibre
http://slidepdf.com/reader/full/2014-ihs-aromatics-and-fibre 29/32
50
55
60
65
70
75
80
85
90
-0.8
-0.4
0.0
0.4
0.8
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Asia (Exclude China) China N. America
S. America W. Europe CIS & Baltics
Global Demand Growth Global Operating Rate
Million Metric Tons Operating Rate (%)
Strong Demand Drives New Adipic AcidCapacity But Cuts Operation Rates
29
8/19/2019 2014 Ihs Aromatics and Fibre
http://slidepdf.com/reader/full/2014-ihs-aromatics-and-fibre 30/32
Investments Run Counter Cyclic to Margins
-50
0
50
100
150
-2
0
2
4
6
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Supply Growth Demand Growth EBITA
Million Metric Tons Dollars Per Metric Ton
Polyester Filament
8/19/2019 2014 Ihs Aromatics and Fibre
http://slidepdf.com/reader/full/2014-ihs-aromatics-and-fibre 31/32
Will Investor Fervor Cool Off?
(10.00)
0.00
10.00
20.00
30.00
40.00
50.00
0
20
40
60
80
100
120
2004 2007 2010 2013
Chemical Fiber Investment In China
Investment YOY Growth Rate
Billion CNY YOY Growth Rate
Positive Signs:
• Major producers have almost
completed an aggressive
expansion wave.
• NDRC’s guideline has
changed, no longer
encouraging new capacities in
East China.
Complexity:
•
Local governments.• Projects may move inland.
• Consumers’ desire to
integrate upstream.
8/19/2019 2014 Ihs Aromatics and Fibre
http://slidepdf.com/reader/full/2014-ihs-aromatics-and-fibre 32/32
Conclusion
•
Demand growth hasslowed significantly inemerging economics.
• All major fibers and raw
materials are inoversupply – but notmuch capacityexpansion under way.
• Margins are negativeand will not improveunless there are capacityrationalizations.