October 9th, 2020

Global Polypropylene Outlook

ICIS Global Petrochemicals Outlook Seminar

Fabrizio Galiè – Senior Consultant, ICIS

Impact of covid-19 on PP

Agenda

9 Oct 2020

01

Risk of oversupply02

Future demand03

2ICIS Global Petrochemicals Outlook Seminar

Impact of covid-19 on PP

9 Oct 2020 ICIS Global Petrochemicals Outlook Seminar 3

PP Global Demand

4

-1%Global demand contraction now expected in 2020

7.9MtDemand loss in 2020-2021

1.5-2Mt Annual demand loss from 2022

9 Oct 2020 ICIS Global Petrochemicals Outlook Seminar

70

75

80

85

90

95

100

105

2019 2020 2021 2022 2023 2024 2025

M tonnes

Covid-19 impact on global PP demand outlook

Pre-covid demand forecast Current demand forecast

Early recovery for some (key) markets

5

3.9%Current projection for China 2020

9 Oct 2020 ICIS Global Petrochemicals Outlook Seminar

N.America

S&C America

Europe

Turkey

Former USSR

Africa

Middle East

China

NE Asia

Asia Pacific

-8.0% -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0%

PP 2020 CAGR% by Region

40%Projected China share on global consumption 2020

Downstream trends very mixed

6

-5%Minimum annual drop expected for injection moulding

PP demand drop from automotive sector (prelim.)

Positive y-o-y

9 Oct 2020 ICIS Global Petrochemicals Outlook Seminar

MEDICAL and FOOD PACK.

-27%

0.0 5.0 10.0 15.0 20.0 25.0 30.0

Other (incl.blow)

Nonwoven

Extr. Film, sheet, coating

Extr. Fibres and raffia

Injection Molding

World PP Demand by Process

2020 (forecast) 2019

M Tonnes

Risk of oversupply

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Demand disruption affected timeline for some projects

89 Oct 2020

CANADAPembina/PIC

550KtyON HOLD

MALAYSIAPengerang

900KtyDELAYED (2021)

USAFormosa250Kty

DELAYED (2023)

COLOMBIAEsenttia

(expansion)CANCELED

CHINASaudi Aramco (jv)

600KtyON HOLD

ICIS Global Petrochemicals Outlook Seminar

Largest annual capacity increases in PP history

9

6.1MtyAverage annual increase in total available PP capacity 2020-2022

9 Oct 2020 ICIS Global Petrochemicals Outlook Seminar

0

1000

2000

3000

4000

5000

6000

7000

World PP Annual Capacity IncreaseK Tonnes

1.0

Africa &M.East

World PP capacity increases 2020-2025 (Mt/y)

10ICIS Global Petrochemicals Outlook Seminar9 Oct 2020

1.9

North America

0.8

Europe & Turkey 1.2

Former USSR

10.9

North East Asia

5.2

Asia Pacific

Excess capacity increase vs global demand

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82%World average plant utilization rate 2020-2022 based on current projects

78.0

80.0

82.0

84.0

86.0

88.0

90.0

0.0

20.0

40.0

60.0

80.0

100.0

120.0

2010 2013 2016 2019 2022 2025

World PP Supply&Demand

capacity cons ut rate

M Tonnes %

Future demand

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Copyright © 2019 ICIS

Population

Urbanization

Infrastructures

Middle class

World Population Growth 2030 vs. 2020

Long-term macro-trends supportive of demand growth

2020 2030

2020 2030

2020 2030 2020 2030

2020 2030

2020 2030

2020 20302020 2030

ICIS Global Petrochemicals Outlook Seminar9 Oct 2020

Forecast World PP Demand

1409 Oct 2020

China

CIS

E. Europe

India

Mexico & South-Central America

Middle East

N. America excl. Mex

Oth. Asia Pacific

North Africa

Oth. Africa

Turkey

W. Europe

Oth. NE. Asia

0

5

10

15

20

25

30

0 1 2 3 4 5 6 7 8

Pe

r C

ap

ita

Co

ns

um

pti

on

20

19

(K

G)

Demand AAGR 2019-2030 (%/year)

*Size represents Demand in 2019.

9 Oct 2020

• Key applications prevented deeper

falls so far

• Duration of the coronavirus crisis may

lead to worse consequences

• Investments confront with oversupply

• Long-term demand potential

9 Oct 2020 ICIS Global Petrochemicals Outlook Seminar 15

Key takeaways

Thank you

Fabrizio Galiè Senior Consultant

Fabrizio.Galie@icis.com

+39 340 881 8055