Asian Petrochemical FeedstocksAsian Petrochemical Feedstocks

• To study the market demand and supply scenario (current and next twenty years) for the following petrochemical feedstocks and solvents in Indian, Asia Pacific and Asian Region– Ethylene – Propylene (both chemical and polymer grade)– Benzene, Toluene and Xylene– Isobutylene– Butene-2– LAB feedstock– Hexane– Naphthalene– Coke

Scope of the StudyScope of the Study

MethodologyMethodology• Primary and Secondary Survey• Past Trend Analysis to build a demand

forecasting model

Presentation OutlinePresentation Outline

• Industry Overview– Ethylene, Propylene, BTX, Butylenes, LAB Feedstock,

Hexane, Naphthalene, Coke• Demand Determinants• Asian Demand Projections

– Ethylene, Propylene, BTX, Butylenes, LAB Feedstock, Hexane, Naphthalene, Coke

• Indian Demand Projections– Ethylene, Propylene, BTX, Butylenes, LAB Feedstock,

Hexane, Naphthalene, Coke

OverviewOverview

Ethylene: where used?Ethylene: where used?

ETHYLENE

Polymers: HDPE,LLDPE, LDPEEthyl Benzene

Styrene

EthyleneDichloride

Vinyl ChlorideMonomer

PVC PS

EthyleneOxide

EthyleneGlycols

Other products, namely,vinyl acetate, acetaldehydeand alpha olefins

Polyester fibre,film, bottles

Ethylene: Consumption PatternEthylene: Consumption Pattern

As ia n Ethyle ne Cons um ption Endus e w is e 2 0 0 3

PE

54%

PV C

17%

EG

14%

SM

9%

Others

6%

Feedstock UsageFeedstock Usage

• Japan: Naphtha Based• Korea: Naphtha Based• Taiwan: Naphtha Based• ASEAN: Gas/Naphtha Based• China: Naphtha/Gas oil Based• India: Gas/Naphtha Based• Middle East: Mainly Gas Based

• Middle East highly competitive on account of cheap gas. Other countries gas cost is relatively high. Naphtha based crackers have profitability pressures whenever crude prices harden

Asian Ethylene ConsumptionAsian Ethylene Consumption

Asian Ethylene Consumption

25.0% 26.1% 26.8% 27.9% 28.7% 30.0% 30.0% 30.6%

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

1996 1997 1998 1999 2000 2001 2002 2003

'000

tonn

es

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

Asia Consumption Middle East Production Share of Asia

Ethylene Capacity Buildup in AsiaEthylene Capacity Buildup in Asia

1996 1997 1998 1999 2000 2001 2002 2003

Japan 7,639 7,366 7,583 7,679 7,695 7,857 7,433 7,535Rep. of Korea 3,950 4,483 5,005 5,145 5,230 5,760 5,550 5,550Taiwan 1,015 1,015 1,015 1,465 1,690 2,365 2,490 2,615China 3,818 3,859 4,059 4,257 4,429 4,749 5,379 5659Singapore 422 836 965 965 980 1,408 1,890 1,890Thailand 728 1,048 1,143 1,765 1,765 1,815 1,985 2,005Malaysia 550 590 630 630 960 960 1,560 1,560Indonesia 510 550 550 550 550 550 550 550Overall ASEAN 2210 3024 3288 3910 4255 4733 5985 6005India 525 1,291 1,366 1,670 2,285 2,390 2,365 2,465

Large Unfulfilled Demand in ChinaLarge Unfulfilled Demand in China

• Elsewhere in Asia, surplus in derivative capacity, and exports are mainly to China

Ch in e s e Ethyle ne Pr oduc tio n Cons um ption Tre nds

0

2

4

6

8

10

12

14

16

18

19 90 19 91 19 92 19 93 19 94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03

Ethylene Derivative Demand Ethylene Production

PetrochemicalsPetrochemicals

UPCYCLE

DOWNCYCLE

Demand: increasingPrice: risingProfit: increasingFresh investments:Picking upMergers &acquisitions:low

Demand: highMargins: highProfits: highFresh Investments: ighMergers & acquisition:negligible

Supply: increasingMargins: decliningProfits: decliningFresh investments: decliningMergers & acquisition:moderate

Significant overcapacityMargins: lowProfits: low to negativeFresh investment: lowMergers & acquisitions: high

Petrochemical CyclicalityPetrochemical Cyclicality

Middle East Cost CompetitivenessMiddle East Cost Competitiveness

Ethyle ne Cas h Cos t Com paris on

0

50

100

150

200

250

300

350

400

Saudi A rabia

Ethane

Gulf State

Ethane

Saudi A rabia

Propane

NW Europe

Naphtha

South Korea

Naphtha

US Gulf C oast

Naphtha

Canada Ethane US Gulf C oast

Ethane

J apan Naphtha

US $ per tonne ethylene

Net M aterials Utilities Direct F ixed C osts A llocated F ixed Costs

India Ethylene Key IssuesIndia Ethylene Key Issues

• Slowdown in domestic demand post commissioning of crackers• Earlier there were Supply constraints, supply constrained

demand got satisfied• In India, high level of recycling, So demand is even more price

linked• Plastic processing industry uncompetitive and facing

competitive pressures both in exports market and domestic.• States of western India consume bulk of ethylene largely

because of significant processing capacity in that location• After commissioning of HPL and GAIL crackers, the capacity for

plastic processing has increased in the northern and eastern India.

Indian Ethylene DemandIndian Ethylene Demand

India n Ethyle ne De riva tive De m a nd

0

500

1000

1500

2000

2500

3000

1980-

81

1985-

86

1986-

87

1987-

88

1988-

89

1989-

90

1990-

91

1991-

92

1992-

93

1993-

94

1994-

95

1995-

96

1996-

97

1997-

98

1998-

99

1999-

2000

2000-

01

2001-

02

2002-

03

2003-

04

PE PV C M EG Styrenics

Indian Demand Capacity TrendsIndian Demand Capacity Trends

In d ia n Eth yle n e D e m a n d C a p a c ity T r e n d s

0

500

1000

1500

2000

2500

3000

1980-

81

1985-

86

1986-

87

1987-

88

1988-

89

1989-

90

1990-

91

1991-

92

1992-

93

1993-

94

1994-

95

1995-

96

1996-

97

1997-

98

1998-

99

1999-

2000

2000-

01

2001-

02

2002-

03

2003-

04

Ethylene C apacity D erivative D emand

Statewise Ethylene DemandStatewise Ethylene Demand

• Based on location of plastic processing and textile industry and estimated consumption of ethylene in those industries.

Sta te w is e Ethyle ne De riva tive De m a nd

A P

8.5%

A ssam

0.2%

B ihar

0.6%

Goa

0.3%

Gujarat17.4%

Haryana

4.7%

HP

1.0%

J &K

0.1%

Kerala

0.8%

M P

3.9%

M aharashtra

13.4%

Orissa

0.5%

Rajasthan

3.4%

Tamil Nadu

10.9%

Tripura

0.0%

UP

9.4%

West B engal

6.7%

Dadra & Nagar Haveli

4.3%

J harkhand

0.1%

Punjab

2.5%

Daman & Diu

5.0%

Delhi

1.5%Chattisgarh

0.2%

Pondicherry

0.8%

Karnataka

3.6%

Uttaranchal

0.2%

Regionwise Demand and Share in GDPRegionwise Demand and Share in GDP

• Imbalance on account of large capacity of plastic processing and textile in Western India.

• Significant amount of finished plastic and textile products exported to other regions.

Ethylene Demand GDP Share

Northern India 22.8% 27.7%

Western India 44.1% 26.4%

Eastern India 8.2% 19.3%

Southern India 24.3% 26.7%

Propylene: How Produced?Propylene: How Produced?

• Co produced with ethylene in a steam cracker. Negligible for ethane based cracker, higher for propane and for naphtha based cracker, nearly 50% of ethylene production

• Co produced with gasoline. Yield in a typical FCC unit 2-4%, In two high olefinic modes, propylene yield can be 10% (as in Reliance) and 20% (deep catalytic cracking as in one of Thailand units and some plants in China)

• Propane Dehydrogenation. Highly Capital intensive, Can be a good source with cheap propane which can be available from countries with high quantites of wet natural gas

• Metathesis. Low Capital Intensity. Uses ethylene and butylene-2 as raw material. Can be effective if ethylene prices are low.

• Methanol to olefins: Moderately capital intensive. Requires cheaply available methanol

Propylene: How Consumed?Propylene: How Consumed?

PolymerGradePropylene Chemical Grade

Propylene

PROPYLENE

PolypropyleneEthylene/Propylenerubbers

Propyleneoxide

AcrylonitrileOxoalcohols

Cumene

Other products,namely, isopropylalcohol, acrylic acid,acrolein andpropylene dimer

Asian Propylene Demand SupplyAsian Propylene Demand Supply

Propy le ne Prod uc tion Con sum ption Tre nds

0

10,0 00

20,0 00

30,0 00

40,0 00

50,0 00

60,0 00

70,0 00

19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03

W orld Pr oduction A sian Pr oduction A sian Consumption M iddle East Pr oduction

Key Asian Propylene ProducersKey Asian Propylene Producers

As ia n P ropyle ne P roduc tion (2 4 .3 m illion tonne s , 2 0 0 3 )

South Korea

15.3%

Taiwan

7.7%

C hina

24.8%

A SEA N

14.0%

J apan

23.0%

India

7.1%

M iddle East

8.1%

Asian Propylene ProductionAsian Propylene Production

Asian Propylene Production Trends

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

1996 1997 1998 1999 2000 2001 2002 2003

Polymer Grade Chemical Grade

Asian Chemical Grade Enduse ConsumptionAsian Chemical Grade Enduse Consumption

As ia n Che m ic a l Gra de Endus e w is e Cons um ption

(2 0 0 3 , 8 .1 m illion tonne s )

A N

34%

C umene

15%Propylene Oxide

8%

Oxo alcohols

22%

A crylic A cid

11%

Others

10%

Polymer GradePolymer Grade

Asia n Polym e r Gra de Tr ends

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

1996 1997 1998 1999 2000 2001 2002 2003

W orld Polymer Grade Propylene C onsumptio n A sian Polymer Grade Propylene Productio nAs ian P olymer Grade P ro pylene C onsumption (Derivative) M iddle East Pol ymer Grad e Productio n

M iddle East Pol ymer Grad e C onsumptio n

China Polymer GradeChina Polymer Grade

China Propylene (polymer grade) Production Consumption Trends

0

1000

2000

3000

4000

5000

6000

7000

8000

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Production Derivative Imports Consumption

China Chemical GradeChina Chemical GradeChinese Chemical Grade Production Consumption Trends

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

2000 2001 2002 2003

mn

ton

ne

s

Chemical Grade Propylene Production

Apparent Demand (chemical grade propylene demand)

Derivative Demand including met through derivative imports

Ethylene to Propylene PricesEthylene to Propylene Prices

• Fast demand growth for polypropylene

• More importantly, little co product production in Middle East gas based crackers

• So, profitability for naphtha based crackers higher in propyleneEthylene Vs Propylene Prices (South East Asia)

0

100

200

300

400

500

600

700

800

900

1000

Jan-

01

Mar

-01

May

-01

Jul-0

1

Sep

-01

Nov

-01

Jan-

02

Mar

-02

May

-02

Jul-0

2

Sep

-02

Nov

-02

Jan-

03

Mar

-03

May

-03

Jul-0

3

Sep

-03

Nov

-03

Jan-

04

Mar

-04

May

-04

Jul-0

4

US

$ / M

T

Ethylene Prices Propylene Prices

Propylene ProductionPropylene Production

India n P ropyle ne P roduc tion

0

200000

400000

600000

800000

1000000

1200000

1400000

1600000

1800000

2000000

1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

R efineries C rackers

Indian DemandIndian Demand

India n Propyle ne De riva tive De m a nd

0

200

400

600

800

1000

1200

1400

1600

1800

1980-

81

1984-

85

1986-

87

1987-

88

1988-

89

1989-

90

1990-

91

1991-

92

1992-

93

1993-

94

1994-

95

1995-

96

1996-

97

1997-

98

1998-

99

1999-

2000

2000-

01

2001-

02

2002-

03

2003-

04

PP A N Others

Chemical Grade Demand SupplyChemical Grade Demand Supply

Indian Chem ica l Grade Prop ylene Pro duc tion C ons um ptio n Trends

0

50

1 00

1 50

2 00

2 50

3 00

3 50

4 00

4 50

5 00

199 4- 95 199 5- 96 199 6- 97 199 7- 98 199 8- 99 1 999- 20 00 200 0- 01 200 1- 02 200 2- 03 200 3- 04

chemical grade derivative cap acity chemical grade prop ylene chemical g rad e der ivat ive demand

Chemical Grade Derivative DemandChemical Grade Derivative Demand

Indian Chem ica l Grade Deriva tive Dem and, 2003 , 0 .46

m illion tonnes

A N

33.8%

Cumene

25.4%

Propylene Oxide

6.5%

Oxo alcohols

13.6%

A crylic A cid

5.3%

Others

15.3%

Regionwise Propylene DemandRegionwise Propylene Demand

Propylene (polymer grade) demand based on end productconsumption

Percentage share

Northern India 284 22.9%

Western India 557 44.8%

Eastern India 110 8.8%

Southern India 284 22.9%

Total 1242

Benzene: Where Used?Benzene: Where Used?

BENZENE

Ethyl Benzene

Styrene

Cumene

Phenol Acetone

Cyclohexane

Caprolactam Hexamethylenediamine

Adipic Acid

Nitrobenzene

Aniline

DetergentAlkylates

Other products: MAN,chlorobenzenes andresorcinol

PS

Bisphenol A

Polycarbonate

MDI

Polyurethane

Paraxylene: Where used?Paraxylene: Where used?

• PX used to produce both PTA and DMT• PX demand derived from polyester• Polyester used in textiles as fibres; in plastics (PET

bottles), films (various uses) and other products. • Largest use is in fibres, PET bottles hold significant

demand in the developed country• PX more important than Benzene in Asia primarily

because of large textile industry in Asia

Other BTXOther BTX

• Orthoxylene primarily used in production of pthalic anhydride

• Toluene used in tolylene di isocyanate, solvents and various chemicals

Asian BTX CapacityAsian BTX Capacity

As ia n BTX Ca pa c ity - 3 2 m illion tonne s 2 0 0 2

B enzene

45%

Toluene

4%

X ylene

51%

ParaxyleneParaxylene

As ia n P a ra x yle ne P roduc tion Cons um ption Tre nds

0

5,000

10,000

15,000

20,000

25,000

1996 1997 1998 1999 2000 2001 2002 2003

World Demand A sian Production A sian C onsumption

BenzeneBenzene

As ia n Be nze ne Produc tion Cons um ption Tre nds

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

1998 1999 2000 2001 2002 2003

World Demand A sian C onsumption A sian Production

BTX PricesBTX Prices

As ia n Ar om a tic P r ic e s

0

10 0

20 0

30 0

40 0

50 0

60 0

70 0

80 0

90 0

Nap htha B enzene Toluene PX OX M ixed X ylenes

Benzene, Toluene andXylenes DemandSupply and Prices

Capacity of BTX fromnaphtha Reforming andpyrolisis gasoline obtainedfrom ethylene crackers

Capacity Utilisation of ethylene, propylenecracker affected by ethylene propylenedemand supply price cost considerationswould determine supply of pyrolisis gasoline

Refining capacity utilisation, gasoline demandsupply will also influence reformate capacityutilisation

Demand from Various chemicalderivatives Polyester, Styrene, Phenol,nylon intermediates, pthalic anhydride,polyurethane, polycarbonate etc

Economic Growth which will influencepolymers, textiles, chemicals and gasolinedemand

Demand for Gasoline blending

Environmental Issues/Regulations

Indian Benzene Supply/ConsumptionIndian Benzene Supply/Consumption

• While some production is being exported, there are significant derivative imports

India n Be nzene Pro duc tion Co nsum p tion Tre nds

0

10 0

20 0

30 0

40 0

50 0

60 0

70 0

80 0

90 0

199 0-9 1 199 1-9 2 199 2-9 3 199 3-9 4 199 4-9 5 199 5-9 6 199 6-9 7 199 7-9 8 199 8-9 9 1 999-

200 0

200 0-0 1 200 1-0 2 200 2-0 3 200 3-0 4

Cap acity Production Impor ts Expor ts Apparent Co nsumption

Indian Benzene Derivative DemandIndian Benzene Derivative Demand

Indian Derivative Benzene Demand - 2003, 0.91 million tonnes

Styrene28%

Cumene25%

Nylon Intermediates

13%

Others34%

ParaxyleneParaxylene

In d ia n P a r a x yle n e P r o d u c t io n Co n s u m p tio n T r e n d s

-50 0

0

50 0

100 0

150 0

200 0

1985-

8 6

1986-

8 7

1987-

8 8

1988-

8 9

1989-

9 0

1990-

9 1

1991-

9 2

1992-

9 3

1993-

9 4

1994-

9 5

1995-

9 6

1996-

9 7

1997-

9 8

1998-

9 9

1999-

200 0

2000-

0 1

2001-

0 2

2002-

0 3

2003-

0 4

C ap acity P ro ductio n Impor ts A ppa rent C onsumptio n

Statewise BTX DemandStatewise BTX Demand

State BTX Estimated Demand

Andhra Pradesh 113Assam 3Bihar 8Goa 19Gujarat 484Haryana 47HP 28J&K 3Karnataka 76Kerala 35MP 94Maharashtra 427Orissa 7Punjab 92Rajasthan 102Tamil Nadu 298Tripura 0UP 147West Bengal 135Dadra & Nagar Haveli 91Daman & Diu 74Delhi 19Pondicherry 25Jharkhand 3Chattisgarh 4Uttaranchal 3Total 2339

C4 UtilisationC4 UtilisationC4 cut from refineries/petrochemicalcrackers

Butadiene Extraction using liquidextraction or extractivedistillationRemaining C4 product is calledcalled Raffinate - 1

Isobutylene extracted from C4 chain by reactingmethanol with it. Alternatively, Raffinate 1 canalso be used to extract feedstock for polybutene.Remaining C4 product is called called Raffinate- 2

Raffinate 2 which mostly contains n-butene can be used toproduce sec butyl alcohol or n-butene –1 can be extracted forpure n-butene 1 applications or n butenes can be isomerised toisobutyleneRemaining C4 product is hydrogenated / alkylated to yieldbutane/gasoline.

IsoButylenes: Where used?IsoButylenes: Where used?

ISOBUTYLENE

Naphtha/Gas Oil BasedEthylene Cracker

Fluidised Catalytic Crackingunit in a refinery

MethylTertiaryButyl Ether(MTBE)

Poly isobutylene(PIB)

MethylMethacrylate(MMA)

Other Chemicalssuch asButylated phenolsTertiary butyl alcoholt-butyl amines, t-butylmercaptan, methallylchloride, neopentanoic acidand isobutylene/maleicanhydride copolymers

Isobuteneisoprenerubber(butylrubber)

Used asoctanebooster ingasolines

Used intubes andtubelesstyres. Gasimpermeability

Used inadditivesforlubricants,adhesivesandsealants

PMMA the polymeris used in sheets andvarious other useswhere transparency,high strength andlight weight aredesirable features

Isobutene: Technology Driven End Isobutene: Technology Driven End ProductsProducts

• Technology for butyl rubber available with few and not easily shared

• High Purity Polyisobutylene technology also difficult• MMA technology from isobutylene also difficult + risk of new

technology getting developed

Large Production of Isobutene compared Large Production of Isobutene compared to non-fuel useto non-fuel use

• As against a net chemical demand of less than 1 million tonne, Asian isobutylene capacity was estimated to be higher than 5 million tonnes in 2003.

• A significant portion of the isobutylene production in Asia is converted to Methyl Tertiary Butyl Ether (a high octane gasoline blending component). Further, it can directly be blended with either gasoline or LPG.

Butyl Rubber-Largest Chemical UseButyl Rubber-Largest Chemical Use

• Used in tubes and tubeless tyres• Butyl rubber estimated demand for isobutylene is close to

0.33 mn tonne in Asian region. • Only two capacities in Asia. One owned by Japan Butyl rubber

and second by Sinopec Beijing Yanhua. A bulk of this demand is actually met by imports from Canada and Russia.

• With rising production of tubes and tubeless tyres in the region, the demand for butyl rubber has increased significantly.

Asian Butyl Rubber ConsumptionAsian Butyl Rubber Consumption

As ia n Butyl Rubbe r Cons um ption

0

50000

100000

150000

200000

250000

300000

350000

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

C hina Korea J apan Taiwan A SEA N India Other A sia

Indian Isobutylene Demand SupplyIndian Isobutylene Demand Supply

• Bulk of production for fuel blending purposes• Entire butyl rubber and high purity polyisobutylene imported.

• Co polyisobutylene/chemicals produced in India.

India n Is obutyle ne Produc tion Cons um ption Tre nds

0

100000

200000

300000

400000

500000

600000

1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04

Total Production C onsumption for polyisobutylene and chemicals Derivative Imports Fuel Use

Butene- 2 Where used?Butene- 2 Where used?

• No significant chemical use of pure butene -2

• n butenes (butene 1 + butene 2) are used to produce sec butyl alcohol used to produce methyl ethyl ketone

Asian Methyl Ethyl Ketone CnsumptionAsian Methyl Ethyl Ketone Cnsumption

• Metathesis units yet to start on commercial scale in Asia

Asian Methyl Ethyl Ketone Consumption, 640,000 tonnes, 2003

ASEAN11.7%

China35.5%

Korea20.2%

Taiwan15.5%

India2.3%

Japan13.1%

Other Asia1.5%

Asian n Paraffin ConsumptionAsian n Paraffin Consumption

Asian N - Paraffin Extraction Trends

0

200

400

600

800

1000

1200

1400

1998 1999 2000 2001 2002 2003

'000

ton

nes

Japan Taiwan Korea ASEAN China India

N Paraffin Consumption TrendsN Paraffin Consumption Trends

Indian N Paraffin Consumption Trends

0

50

100

150

200

250

300

350

40019

83-8

4

1984

-85

1985

-86

1986

-87

1987

-88

1988

-89

1989

-90

1990

-91

1991

-92

1992

-93

1993

-94

1994

-95

1995

-96

1996

-97

1997

-98

1998

-99

1999

-200

0

2000

-01

2001

-02

2002

-03

2003

-04

'000

tonn

es

N Paraffins: Where used?N Paraffins: Where used?• The predominant use of n paraffins is in manufacture

of linear alkyl benzene. More than 85% of n paraffins worldwide are used for production of linear alkyl benzene.

• The other uses of n paraffins include production of – High grade alcohol, – chlorinated paraffin, – nitro-alkanes and amines, – Sulphoxidation or sulphochlorination for surfactant or plasticiser

manufacture,– Raw material for microbiological oxidation or fermentation process and – direct use as a solvent in many applications.

N paraffin PricesN paraffin Prices• The prices of n paraffin are dependent on the prices of kerosene, which, in turn,

are dependent on the prices of crude oil. • With the return stream of n paraffin extraction plant (about 80% of original stream)

being thus valued at much lower value, the prices of n paraffin would be equal to differential between two kerosene streams applied to n paraffin plus the cost of volume of n paraffins plus other costs and are thus, significantly higher than the prices of kerosene (differentials are around US$ 300-400 per MT).

• Over the last ten years, there has been an increase in merchant sales of n-paraffins to new LAB plants in the developing world. At the same time, supplies of traditional feedstocks that are rich in n-paraffin have declined. The production of normal paraffins is influenced by the availability of n-paraffin-rich kerosene at the n-paraffin producing facilities. This has been in relatively short supply, compared to previous years, contributing to the tight market situation and high prices of n paraffins.

• New Fischer-Tropsch units designed to meet the growing demand for low-sulfur fuels are expected to provide new supplies of coproduct paraffins, possibly in large quantities, bringing much respite for standalone producer.

Hexane Key IssuesHexane Key Issues

• 90% of demand arises from edible oil sector wherein its low cost and high level of usefulness lead to its domination

• Out of total solvent demand, edible oil extraction is about 2% of the demand in a mature market.

• Health concerns over Hexane on account of its established linkage with inducing neuropathy if consumed in significant quantities. On a health hazard spectrum of 0 - 3 n-Hexane registers 1.3.

Most exposure cases reported at worksites and related to inhalation

Solvent ExtractionSolvent Extraction

Indian Hexane ConsumptionIndian Hexane Consumption

Indian Hexane Consumption Trends

0

20

40

60

80

100

120

140

160

180

1991-92 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-2001 2001-2002(April - Feb)

2002-2003 2003-2004

Hexane Consumption

Why is consumption declining?Why is consumption declining?

• Oilseeds availability in India is uncertain and inadequate• Therefore, Crude edible oil getting increasingly imported in India

to meet growing demand• Edible oil extractors have been inefficient in using hexane as

solvent and with improving efficiency levels, their per unit hexane consumption has been declining

• On an average, extractors in the US& EU consume less than 20% of Indian per unit hexane consumption in edible oil sector

Statewise DemandStatewise Demand

• Statewise Demand

3.2

0.0 0.0

3.5

0.71.5

0.2

8.2

3.5

0.1

1.1

2.1

0.81.2

0.3 0.10

10

20

30

40

50

60

70

80

An

dh

ra

Pra

de

sh

As

sa

m

Bih

ar

Gu

jara

t

Ha

rya

na

Ka

rna

taka

Ke

rala

Ma

dh

ya

Pra

ds

h

Ma

ha

rsh

tra

Ori

ss

a

Pu

nja

b

Ra

jas

tha

n

Ta

mil

Na

du

Utt

ar

Pra

de

sh

We

st

Be

ng

al

Po

nd

ich

err

y

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

No. of units (LHS) Processing capacity (in million tonnes of oil cake)

Asian Hexane Demand SupplyAsian Hexane Demand Supply

• Asian production of hexane assuming a 5% of gasoline as hexane production would be close to 7.5 million tonne

• Required extraction for edible oil sector is only around 0.6 million tonnes.

• Extraction capacities in India, China, Malaysia, Indonesia

NaphthaleneNaphthalene

• Can be produced from Met-coke/Refineries

• Used in manufacture of PAN; Construction; Textiles

• Asian region – Potential Supply position is over 5 times the demand. Major deterrent for capacity addition.

• Naphthalene content in crude around 0.5 to 2% so a 10 million tonne refinery would have 100,000 tonne production

NaphthaleneNaphthaleneCoal

Coke OvenBatteries

CokeCoal Tar Light Oil

Benzene TolueneSoft Pitch Naphthalene

Creosote Oils

PhthalicAnhydride(PAN): used inpaints and asplasticisers.

Sulfonatednaphthaleneformaldehydecondensates

- naphthol‘tobias acid’ J- acidetc used indyestuffs pigments

Mothballs,Other new products such ascarbonless paper solvent, PENresin used for CD player tape andhigh temperature resistance bottle,BON 6 which is a raw material forliquid crystal display.

Asian Naphthalene production from coalAsian Naphthalene production from coal

Naphthalene Production from Coke Oven Gas

0

200

400

600

800

1000

1200

1400

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

China India J apan South Korea Pakistan Taiwan

Statewise Naphthalene Demand (0.35 Statewise Naphthalene Demand (0.35 million tonnes)million tonnes)

State Share in consumption

Andhra Pradesh 6.5%

Assam 0.1%

Bihar 0.1%

Gujarat 18.2%

Haryana 1.3%

Himachal Pradesh 1.6%

Jammu & Kashmir 0.3%

Karnataka 3.2%

Kerala 1.8%

Madhya Pradesh 5.5%

Maharashtra 14.8%

Orissa 0.2%

Punjab 6.9%

Rajasthan 7.0%

Tamil Nadu 22.3%

Uttar Pradesh 4.1%

West Bengal 7.1%

CokeCoke

• Two major grades – Calcined and non-calcined• Calcined coke commands price premium• Power Generation, Cement, Aluminium – major

industries• Strong volatility in product demand• Japan – Leading consumer• India, China – Surplus situation

Asian Petcoke CapacityAsian Petcoke Capacity

Asia: S hare in P etC oke C apacity

23.6%

15.4%

12.5%9.4%9.1%

6.4%

4.7%

4.0%3.3%

2.2%

1.7%

3.4%3.5%0.6%

0.4%

India

China

Rus s ia

Kuw ait

Taiw an

Japan

A z erbaijan

South Korea

Turkmenis tan

Turkey

Kaz akhs tan

Malay s ia

Uz bekis tan

Sy r ia

My anmar

Demand DeterminantsDemand Determinants

Ethylene Projections: Demand Ethylene Projections: Demand DeterminantsDeterminants

ECONOMY

GROWTH

POLYMERDEMAND

FIBREDEMAND

RUBBERDEMAND

Export Competitivenessof Plastic Processing

Export Competitivenessof Textiles and Apparel

Export Competitiveness ofTyres and other downstreamindustries

LDPE/LLDPEDEMAND

HDPEDEMAND

PVCDEMAND

EGDEMAND

STYRENEDEMAND

OTHER PRODUCTSDEMAND

ETHYLENEDEMAND

Propylene (chemical grade) Projections: Propylene (chemical grade) Projections: Demand DeterminantsDemand Determinants

ECONOMY

GROWTH

POLYMERDEMAND

FIBREDEMAND

Paints andCoatings

Export Competitivenessof Plastic Processing

Export Competitivenessof Textiles and Apparel

Export Competitiveness ofAutomobile, AutoAncillary, Consumerdurables

AcrylonitrileDemand

Cumene Demand

Propylene OxideDemand

Acrylic AcidDemand

Oxo AlcoholsDemand

OTHER PRODUCTSDEMAND

Propylene (ChemicalGrade) DEMAND

Propylene (polymer grade) Projections: Propylene (polymer grade) Projections: Demand DeterminantsDemand Determinants

ECONOMY

GROWTH

POLYMERDEMAND

FIBREDEMAND

Export Competitivenessof Plastic Processing

Export Competitivenessof Textiles and Apparel

PolypropyleneDEMAND

Polymer GradePropylene Demand

Price, QualityCompetitiveness ofPolypropylene vis-à-visother polymers and fibres

BTX Projections: Demand DeterminantsBTX Projections: Demand DeterminantsSTYRENEDEMAND 50%

ECONOMY

GROWTH

BENZENEDEMAND

NYLONDEMAND 15% POLYMER

DEMAND

GASOLINE DEMAND

BTXDemand

FIBREDEMAND

RUBBERDEMAND

TOLUENEDEMAND

ANILINE,PHENOLDEMAND 20%

PLASTICISERDEMAND

SOLVENT DEMAND

TDIDEMAND %

PARAXYLENEDEMAND

POLYESTERDEMAND

ORTHOXYLENEDEMAND

METAXYLENEDEMAND

ISOPHTHALLICACID DEMAND

PHTHALICANHYDRIDEDEMAND

PREMIUMDETERGENT

Iso Butylene: Demand DeterminantsIso Butylene: Demand Determinants

ECONOMY

GROWTH

Automobile Demand

PolyisobutyleneDemand

MethylMethacrylateDemand

Demand for otherchemicals

Iso butyleneDemand

Butyl RubberDemand

Gasoline Demand

Methyl TertiaryButyl Ether Demand

PolymerDemand

Cis / Trans Butene 2: Demand Cis / Trans Butene 2: Demand DeterminantsDeterminants

ECONOMY

GROWTH

Gasoline Demand

HeavierCrudes

LPG Demand

Methyl Ethyl KetoneDemand

Propylene Demand

Cis/TransButene –2Demand

AlkylationDemand

Higher Propylene DemandLower Ethylene Prices / Availability ofcheaper ethylene in the global market

LAB Feedstock: Demand DeterminantsLAB Feedstock: Demand Determinants

ECONOMY

GROWTH

Improvement in incomes leads to higher purchasing power

Increase in possible population ormarket size that can afford syntheticdetergents

Increase in demand for LAB and other surfactant rawmaterials which compete on properties and prices.

Increase in demand for nparaffins

Increase in demand forchlorinated paraffins,plasticisers, solvents, metalcutting fluids etc.

Hexane: Demand DeterminantsHexane: Demand Determinants

• Hexane consumption linked to growth in edible oil extraction through solvent extraction processes

• With import of edible oil, this may not be linked to GDP growth

• Also, efficiency of solvent extraction process in India and other Asian countries is on the rise on account of inefficient facilities.

Naphthalene: Demand DeterminantsNaphthalene: Demand Determinants

ECONOMY

GROWTH

InfrastructureDEMAND

FIBREDEMAND

Paints

Export Competitivenessof Textiles and Apparel

Export Competitiveness ofAutomobile, AutoAncillary, Consumerdurables

ConstructionDemand

Textile DyesDemand

Phthalic AnhydrideDemand

OTHER PRODUCTSDEMAND

NaphthaleneDEMAND

Market Dynamicsof Ortho Xylene

Coke: Demand DeterminantsCoke: Demand Determinants

ECONOMY

GROWTH

InfrastructureDEMAND

Cable, PackagingDEMAND

Energy Demand

RelativeCompetitiveness ofAlternate Fuel

Cement Demand

AluminiumDemand

Power Demand

OTHER PRODUCTSDEMAND

PetCoke DEMAND

RelativeCompetitiveness ofAlternate Fuel

Polymer Industry linked to GDP GrowthPolymer Industry linked to GDP Growth

W orld G DP ve rsu s P o lym e r Dem a nd

0 .00 %

2 .00 %

4 .00 %

6 .00 %

8 .00 %

1 0 .00 %

19 9 0 19 9 1 19 9 2 19 9 3 19 9 4 19 9 5 19 9 6 19 9 7 19 9 8 19 9 9 20 0 0 20 0 1

Ye a r

%

GD P g r o w th ra te Po lym er D e m a n d g r o w th ra te

Per Capita Income Vs Polymer Per Capita Income Vs Polymer ConsumptionConsumption

Comparison of per capita incomes and polymer consumption - 2001

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

India China Middle Ea st

Indonesia Thailand Malaysia South Korea

Singapore Australia Japan USA

Per Capita Polymer Consumption (kgs) GDP per capita ('000 US$, purchasing power parity)

Plastic Processing Industry ExportsPlastic Processing Industry Exports

(mn tonnes) China Korea Germany The US

1998 3.1 0.7 2.9 0.91999 3.3 0.8 3.1 0.92000 4 0.8 3.4 12001 4.4 0.8 3.7 1.12002 5.3 0.9 4 1.1

SSI Reservation limits Indian Downstream SSI Reservation limits Indian Downstream Plastic Processing SectorPlastic Processing Sector

Ave rage Size of Plas tic Proces s ing Unit In dia Vs Wor ld

0

200

400

600

800

1000

1200

1400

1600

1800

2000

USA Germany Canada Brazil China India

tonnes per annum

Textile Industry linked to GDP GrowthTextile Industry linked to GDP Growth

Industry Overview

World Fibre De m and Vs GDP

-2

0

2

4

6

8

10

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

%

World Fibre World GDP

Agreement on Textile & ClothingAgreement on Textile & Clothing

• Agreement on Textile and Clothing has given way to application of WTO framework on international textile trade

• For the first time in last four decades, free textile trade to take place

• Increase in export market for developing countries as also increase in competition

• Although China, can expand its share at the cost of others single handedly, however, developed world unlikely to have single supplier. In addition, China joined WTO late and so developed countries have an option of imposing restrictions of Chinese growth

Asia Becoming a Manufacturing Base Asia Becoming a Manufacturing Base to Supply to Worldto Supply to World

Naft a

M iddle

EastAsia

E urope

Feedstock and Petrochemicals

Labor Intensive Products and Finished Goods

??

??

PPP Per Capita GDP 1993PPP Per Capita GDP 1993

P u r c h a s in g P o w e r P a r ity Ba s e d P e r C a p ita G DP s - De v e lo p in g A s ia

Th a ila n d

S r i L a n kaCh in a

Ma la y s ia

Fiji

In d o n e s ia

Ph illip in e s

L a o s

In d ia

B a n g la d e s h

Ca mb o d iaNe p a l

My a n ma r

Pa kis ta n

0

1 0 0 0

2 0 0 0

3 0 0 0

4 0 0 0

5 0 0 0

6 0 0 0

PPP Per capita GDP 2003PPP Per capita GDP 2003

P u r c h a s in g P o w e r P a r i t y B a s e d P e r C a p i t a G D P s - D e v e lo p in g A s ia

T h a ila n d

P a k is ta n

M y a n m a r

N e p a lC a m b o d ia

B a n g la d e s h

B h u ta n

In d ia

L a o s

P h illip in e sIn d o n e s ia

F iji

M a la y s ia

C h in a

S r i L a n k a

0

2 0 0 0

4 0 0 0

6 0 0 0

8 0 0 0

1 0 0 0 0

1 2 0 0 0

China GDP a nd Grow th

0

1000

2000

3000

4000

5000

6000

7000

19

81

19

83

19

85

19

87

19

89

19

91

19

93

19

95

19

97

19

99

20

01

20

03

Bil

lio

n R

en

min

bi

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

%

Real GDP Grow th Rate

Rising Economic Development in China, Rising Economic Development in China, Increasing Development in China in comparison Increasing Development in China in comparison

to other Countriesto other Countries

China Export Led GrowthChina Export Led Growth

High Exports in Labour Intensive IndustriesHigh Exports in Labour Intensive Industries

Product s in w hich China has s ignifican t s hare in th e Export M arket

0

20

40

60

80

100

120

sh

are

in

%

Feedstock SituationFeedstock Situation• Middle East has large gas reserves• Oil demand set to rise on account of increasing development• Oil trade likely to increase as more demand increases in India

and China wherein crude production not increasing sufficiently. • FSU/Middle East to be the main suppliers to meet increase in

demand• Middle East needs to increase oil capacity in case it plans to meet

this demand.• In past, whenever, Middle East capacity utilisation has been high,

prices have gone high.• However, even availability of reserves in Middle East is an issue.

Saudi Arabia not able to increase production. Reserves not updated.

• Oil prices and consequently naphtha prices to remain high.

Further Increase in Middle Further Increase in Middle East CapacityEast Capacity

Country Capacity Increase 2003-2013 2014-2024Saudi Arabia 6.3 5Iran 9.3 9Qatar 2.0 2.0Kuwait 1.0 1.0Iraq 1.0 2.0UAE 0.6 0

China Vs India PetrochemChina Vs India Petrochem

Factor China IndiaPast Government Policy 4 2Infrastructure 3 1.5Power 3.5 1Financial Sector 1.5 3Downstream Sector Development and its future 4 2.0Feedstock and other inputs 2 2Investor Confidence in Manufacturing 4 1.5

Asian Demand ProjectionsAsian Demand Projections

Asian Ethylene Asian Ethylene

Asian Ethylene Demand

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

mn

tonn

es

Polyethylene PVC EG SM Others

Asian EthyleneAsian Ethylene

Asian Ethylene Demand

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

mn

tonn

es

Japan Korea Taiwan ASEAN China India Other Asia Middle East

Asian Propylene (chemical grade) Asian Propylene (chemical grade)

Asian Chemical Grade Propylene Demand

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00

20.00

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

mn

tonn

es

AN Cumene Propylene Oxide Oxo alcohols Acrylic Acid Others

Asian Chemical Grade PropyleneAsian Chemical Grade Propylene

Asian Chemical Grade Propylene Demand

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00

20.00

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

mn

tonn

es

Japan Korea Taiwan ASEAN China India Other Asia

Asian Propylene (polymer grade)Asian Propylene (polymer grade)

Asian Polymer Grade Propylene Demand

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

mn

tonn

es

Japan Korea Taiwan ASEAN China India Middle East Other Asia

Asian BenzeneAsian Benzene

Asian Benzene Demand

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

45.00

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

mn

tonn

es

Styrene Cumene Nylon Intermediates Others

Asian BenzeneAsian Benzene

Asian Benzene Demand

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.0020

03

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

mn

tonn

es

Japan Korea Taiwan ASEAN China India Other Asia

Asian ParaxyleneAsian Paraxylene

Asian Paraxylene Demand

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

mn

tonn

es

PET fibre PET film PET bottles Others

Asian ParaxyleneAsian Paraxylene

Asian Paraxylene Demand

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

mn

tonn

es

Japan Korea Taiwan ASEAN China India Other Asia

Asian BTXAsian BTX

Asian BTX Demand

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

mn

tonn

es

Benzene Paraxylene Orthoxylene Toluene

Asian IsobutyleneAsian Isobutylene

Asian Isobutylene Demand

0

200

400

600

800

1000

1200

1400

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

000

tonn

es

Butyl Rubber Polyisobutylene Others

Asian IsobutyleneAsian Isobutylene

Asian Isobutylene Demand

0

200

400

600

800

1000

1200

1400

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

000

tonn

es

Japan Korea Taiwan ASEAN China India Other Asia

Asian Iso Butylene from MMAAsian Iso Butylene from MMA

Fu ture Is o butyle ne C ons um ption in M MA a s s um ing 4 0 % of Ca pa c ity ba s e d on is obu tyle ne

0

100

200

300

400

500

600

700

800

900

1000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

C hina India J apan Korea A SEAN Taiwan O ther A si a

Asian N Butene Demand from MEKAsian N Butene Demand from MEK

Asian Methyl Ethyl Ketone (Cis / trans Butene -2) Demand

0

200

400

600

800

1000

1200

1400

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

'000

ton

nes

Japan Korea Taiwan ASEAN China India Other Asia

Asian Butene -2 Demand from MetathesisAsian Butene -2 Demand from Metathesis

Company Country Process PropyleneCapacity (’000

tonnes peryear)

ButyleneRequirement

ScheduledCommissioning

Date

AsiaBP plc, SeccoPetrochemicalCo

China Metathesis 140 92 2005

MitsuiChemicals Inc.

Japan Metathesis 140 92 2004

NipponPetrochemicalsCo.

Japan Metathesis 150 99 2005

SumitomoChemicals

Japan Metathesis 350 231 2007

PCS Singapore

Metathesis 200 132 2006

FormosaPetrochemicalCorp

Taiwan Steam Cracking/metathesis

250 165 2006

Rest of WorldBASF AGAtofina

US Metathesis 312 206 2004

Asian LAB FeedstockAsian LAB Feedstock

Asian N-Paraffins Demand

0

200

400

600

800

1000

1200

1400

1600

1800

2000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

'000

ton

nes

Japan Korea Taiwan ASEAN China India Other Asia

Asian HexaneAsian Hexane

Asian Hexane Demand

0

100

200

300

400

500

600

700

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

'000

ton

nes

China India Other South-Asia ASEAN Japan Middle East Other Asia

Asian NaphthaleneAsian Naphthalene

Asian Naphthalene Demand

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00C

Y20

03

CY

2004

CY

2005

CY

2006

CY

2007

CY

2008

CY

2009

CY

2010

CY

2011

CY

2012

CY

2013

CY

2014

CY

2015

CY

2016

CY

2017

CY

2018

CY

2019

CY

2020

CY

2021

CY

2022

CY

2023

mn

tonn

es

Japan Korea ASEAN China India

Asian CokeAsian Coke

Asian Pet Coke Demand

0

2000

4000

6000

8000

10000

12000

CY

2003

CY

2004

CY

2005

CY

2006

CY

2007

CY

2008

CY

2009

CY

2010

CY

2011

CY

2012

CY

2013

CY

2014

CY

2015

CY

2016

CY

2017

CY

2018

CY

2019

CY

2020

CY

2021

CY

2022

CY

2023

'000

ton

nes

Japan Korea Taiwan Malaysia China India

India: Demand ProjectionsIndia: Demand Projections

India: EthyleneIndia: Ethylene

Indian Ethylene Demand

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

mn

tonn

es

Polyethylene PVC EG SM Others

India: Propylene Chemical GradeIndia: Propylene Chemical Grade

Indian Chemical Grade Propylene Demand

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

mn

tonn

es

AN Cumene Propylene Oxide Oxo alcohols Acrylic Acid Others

India: PropyleneIndia: Propylene

Indian Propylene Demand

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

mn

tonn

es

Polymer Grade Chemical Grade

India: BenzeneIndia: Benzene

Indian Benzene Demand

0.00

0.50

1.00

1.50

2.00

2.50

3.00

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

mn

tonn

es

Styrene Cumene Nylon Intermediates Others

India: ParaxyleneIndia: Paraxylene

Indian Paraxylene Demand

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

mn

tonn

es

PET fibre PET film PET bottles Others

India: BTXIndia: BTX

Indian BTX Demand

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

mn

tonn

es

Benzene Paraxylene Orthoxylene Toluene

Indian IsobutyleneIndian Isobutylene

Indian Isobutylene Demand

0

50

100

150

200

250

300

350

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

'000

ton

nes

Butyl Rubber Polyisobutylene Others Butyl Rubber Polyisobutylene Others

India: n ButeneIndia: n Butene

Indian Methyl Ethyl Ketone (Cis / trans Butene -2) Demand

0

10

20

30

40

50

60

70

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

'000

ton

nes

India: HexaneIndia: Hexane

Indian Hexane Demand

0

10

20

30

40

50

60

70

80

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

' 000

ton

nes

Hexane

India: N paraffinsIndia: N paraffins

Indian N-Paraffins Demand

0

100

200

300

400

500

600

700

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

'000

ton

nes

India NaphthaleneIndia Naphthalene

India Naphthalene Demand

0.00

0.10

0.20

0.30

0.40

0.50

0.60

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

mn

tonn

es

India: CokeIndia: Coke

Indian Pet Coke Demand

0.0

500.0

1000.0

1500.0

2000.0

2500.0

3000.0

3500.0

4000.0

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

'000

ton

nes

Pet Coke

Statewise GDP GrowthStatewise GDP Growth

State Differential over GDP Growth AP, Gujarat, Karnataka, Delhi, HP, Goa, Pondicherry 1Bihar, some states in North East, Andaman & Nicobar -1

Statewise Demand 2023Statewise Demand 2023

• Statewise Demand based on GDP growth

Ethylene(million tonnes)Propylene Polymer Grade ('000 tonnes)

Propylene Chemical Grade ('000 tonnes) BTX ('000 tonnes) Isobutylene (tonnes)

N paraffins (tonnes)

Andhra Pradesh 1.4 371.4 113 623 14249 54167Northern India 4.17 1,074 327 1,801 41,202 156,620 Western India 4.07 1,047 319 1,755 40,160 152,663 Eastern India 2.68 690 210 1,157 26,462 100,591 Southern India 4.37 1,125 343 1,887 43,176 164,126

India: Critical IssuesIndia: Critical Issues

• When would SSI dereservation take place?

• How India competes in international textile post WTO accession?

Summary/ConclusionsSummary/Conclusions

Product Market Size Growth Profitability in Asian region(including India but excludingMiddle East)

Ethylene Very Large Fast Low to Medium & CyclicalPropylene(PolymerGrade)

Large Medium to Fast(Expected to beSlower thanethylene andsupplyconstrainedcost issuesalso)

Medium to high & Cyclical

Propylene(chemicalgrade)

Medium Medium to Fast Medium & Cyclical

BTX Large Medium to Fast Medium & CyclicalIsoButene Small Medium to Fast High and less cyclical in select

derivative products wheretechnology is not easily accessible,but low to medium in other productswith higher degree of cyclicality

Summary/ConclusionsSummary/ConclusionsProduct Market Size Growth Profitability in Asian region

(including India but excludingMiddle East)

Cis trans butene2

Small SlowBut could behigher from metathesisapplicationswhich willdepend onethylene topropyleneprices

Low & cyclical

LAB feedstock Medium Medium Currently profitability high becauseof shortage of n paraffins, but infuture because of commisioning ofseveral GTL projects, there may besignificant overcapacity andcorrespondingly a decline in margins

Hexane Small Declining Currently high in India because oftariff structure which is likely tochange in the medium term

Naphthalene Small Slow Profitability from refineries expectedto be low

Coke Medium,supply driven

Slow Profitability for power grade petcoke is low, but high for calcinedpetroleum coke