Indian Aromatics Markets - Platts · FINANCE, 5 INDIA – MACRO ... PRODUCTION 1347 KTA 1439 KTA...

1 Platts - 2nd Asian Aromatics Conference | Seoul | September 2014

Indian Aromatics Markets Current Scenario and Future Prospects

| NIKUNJ PAREKH | KEMPAR ENERGY, SINGAPORE

KUNJAL SYNERGIES, INDIA

2

INDIA – MACRO ECONOMY UPDATE

AGENDA

INDIAN AROMATICS MARKET OVERVIEW

ABOUT KUNJAL GROUP

Platts - 2nd Asian Aromatics Conference | Seoul | September 2014

SELLING TO INDIA : TAX AND LOGISTICS

THE WAY FORWARD

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SDS - India’s economy has been one of the fast growing economies of

the world. It is the third largest economy of the world in terms of

purchasing power parity.

- From 2004 to 2011, India’s quarterly GDP growth rate averaged

over 8%.

- Growth has been subdued in the years 2012-2013 and 2013-

2014 due to challenges in the Global Economy and Particularly

Policy Paralysis due to the Central Government

- 2012 GDP Growth : 4.5% | 2013 : 4.7%

- Signs of Revival in GDP Growth and Industrial Activity with the

formation of New Government - Q1 FY 2014 (Apr-June) GDP

Growth : 5.7%

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4

Nikunj Parekh


SDS

SOURCE: MINISTRY OF

FINANCE,

5



SDS

- Export Growth of over 7% YoY in Q2 2014

- Foreign Currency Assets – USD 294.5BN as of End July 2014

- Headline WPI Inflation – 5.19% in July 2014

- The Indian economy is characterized by strong macro-economic

fundamentals. We have a well-developed financial system, young

and qualified labor force, dynamic private sector and growing

savings and investment rate.

- Govt has started positive measures by clearing major project

approvals, FDI in key sectors, fuel subsidy cuts and better

governance

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INDIAN AROMATICS MARKET


- India plays an increasingly important role in the global aromatics

market.

- Booming demand from construction, new infrastructure projects,

polyster sector, chemicals & pharmaceuticals.

- Key producers: Reliance, IOC, Haldia, BPCL, OMPL, OPaL

- Key surplus aromatics: Benzene, Paraxylene, Orthoxylene,

Mixed Xylene (Isomer)

- Key Net Imports : Styrene Monomer, Toluene, Mixed Xylene

(Solvent), Phenol, Acetone, etc

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INDIAN AROMATICS MARKET


- Very Competitive Market with many distributors and traders

operating.

- Credit Terms to End users is 60-90 Days. Different from China

- Congestion at Ports contribute to higher costs.

- Effected by International Price movements almost immediately

due to daily spot pricing in local market.

- Local Producers become aggressive if too much import / stock

build

- Slowly Moving into Floating Price mechanism mode for

Imports.

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BENZENE


2013 -14 2014 – 2015 (E) 2015–2016 (E)

PRODUCTION 1347 KTA 1439 KTA 1829 KTA

DEMAND 730 KTA 870 KTA 930 KTA

IMPORT 0 0 0

EXPORT 617 KTA 569 KTA 899 KTA

-SD - Benzene Production Growing Due To New Tdp Units And

Cracker Expansions / New Projects.

- Major Domestic Demand Is Lab, Cumene, Chloro And

Nitro Benzene, Aniline.

- Future Demand Growth Expected At 7~8%.

- Main Export Markets: Middle East, Europe, Usa, Sea.

Source: CPMA

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TOLUENE


2013 -14 2014 – 2015 (E) 2015–2016 (E)



IMPORT 300 KTA 320 KTA 336 KTA

EXPORT (10,000MT Re-

Export)

Small Qty Re-

Export

Small Qty Re-

Export

-SD - Toluene Production Is Steady, Ril Is Biggest Producer,

Capacity Utilisation Is Growing Slowly.

- Major Domestic Demand Is Solvents, Chloro / Nitro

Toluene, Tdi, Pharmaceuticals, Adhesives

- Not Imported In India As A Gasoline Blending Component.

- Future Demand Growth Expected At 4-5%.

- Main Import Sources: Singapore (64%), Thailand (16%), South Korea (10%),

Europe (6%), Middle East (4%).

Source: Industry

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0

PARAXYLENE

1


2013 -14 2014 – 2015 (E) 2015–2016 (E)





-SD - Paraxylene Production Is Increasing In India Due To Robust Pta And Pet

Growth

- East Coast (HALDIA) Needs To Import Px Due To

Logistical Reasons

- Main Import Sources: Oman, Kuwait, Singapore, Malaysia, Saudi

Arabia,

- Main Export Markets: Indonesia, China, Taiwan Etc.

Source: CPMA

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1

STYRENE MONOMER

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2013 -14 2014 – 2015 (E) 2015–2016 (E)

PRODUCTION 0 0 0



EXPORT 0 0 0

-SD

- No Styrene Monomer Production In India

- Stable Demand Growth For Ps, Abs, Sbr

- Main Import Sources: Singapore, Saudi Arabia, Kuwait, Indonesia

- No Future Plan Yet For Sm Plant.

Source: CPMA

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2

ORTHOXYLENE

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2013 -14 2014 – 2015 (E) 2015–2016 (E)





-SD

- Ox Operating Rates Are Down Recently

- Stable Demand Growth For Pa And Chemicals

- East Coast India Importing Due To Logistics And Some Volume To West

Coast Due To Tax Benefits.

- Export Market Will Be Hit Due To New Capacities In Asia

- Main Import Sources: Singapore, Isreal, Eu

- Main Export Markets: China, Malaysia

Source: CPMA

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3

MIX XYLENE (SOLVENT)

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2013 -14 2014 – 2015 (E) 2015–2016 (E)




EXPORT 23 KTA 17 KTA 14KTA

-SD - Mx Demand And Supply Is Steady.

- Main Application Is Solvents, Pesticides Etc

- Imports Increasing Due To Tax Benefits And

Geographical Advantages

- Small Exports Due To Better Netback And Geographical Reasons

- Main Import Sources: Thailand, South Korea, Singapore

- Main Export Markets: Uae, Sri Lanka.

Source: CPMA

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4

DOWNSTREAM AROMATICS

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-SD

- Some other key downstream aromatics in India are Linear Alkyl Benzene

(LAB), Phenol, Acetone, Aniline, Hexane, C9, Cyclohexane, ACN, etc

- LAB is Exported as well as Imported due to Logistical Reasons and Netbacks.

- Phenol / Acetone are Net Import Products with volumes of 200KTA and 70KTA

Respectively.

- Aniline imports are growing due to Competitive prices from China and demand

growth in Dyes and Rubber Chemicals.

- Hexane, C9 , C9+ and Heavy Aromatics are imported on a regular basis for

solvent and extraction usage.

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SELLING TO INDIA – TAXES

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-SD

- Import Tax is applicable in general for all Aromatics imported to India in

the range of 2% to 7.5%

- India has some FTA which impact buying pattern of Aromatics.

- Asean-India FTA (AIFTA)gives benefit of 0% Import tax for products such

as Toluene, Mix Xylene, OX, CX etc, and preferential Import Tax for Phenol

,Acetone, IPA etc.

- Korea – India CEPA FTA also gives tax benefits for Toluene, Mix Xylene,

C9, etc.

- No Tax Treaties yet with China, Taiwan, Africa, Middle East, Europe or

USA.

- Anti Dumping Duties on some products such as Phenol, Acetone etc

impact buying patterns.

1

6

SELLING TO INDIA – LOGISTICS

1


-SD

- Most of the Petrochemical and Aromatics Plants in India are located on the

West Coast of India, followed by North and some in the South.

- East Coast and South Coast are still nett importers for Aromatics products and

will continue to do so due to logistics reasons.

- Kandla in West Coast India is the “Zhangjiagang” of India – the main

Petrochemical port of call due to logistics for serving West Coast and Pan India

Market.

- Aromatic Import Sources are slowly to South East Asia and Middle East due

to reduced lead times, Tax benefits and competitive freights compared to other

destinations.

- Main Port of Calls in India for Aromatics in the future will be Kandla, Mumbai,

Hazira, Cochin, Vizag, Ennore, Kolkata, Haldia.

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THE WAY FORWARD

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-SD

- India is poised to grow and become one of the Key Markets for

Aromatics and Solvents after China in Asia.

- Benzene and PX will be the major Aromatics Export products and will be

a big competition to SEA and NEA producers.

- No new major capacity additions announced in other Aromatics, hence

the Import Volumes will keep growing.

- Huge Opportunities for setting up Aromatics and Downstream units for

Styrene, Toluene, Phenol, BPA etc.

- Imports are becoming more Geographically - localized as more Regional

Ports in India are becoming equipped to handle bulk imports

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ABOUT KUNJAL GROUP

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-SD

- ESTABLISHED IN 1983

- DISTRIBUTION SET UP IN INDIA IN 4 PORTS FOR AROMATICS AND

SOLVENTS (KANDLA, MUMBAI, KOLKATA, HAZIRA)

- PRODUCT PROMOTERS FOR RELIANCE INDUSTRIES, NIRMA, SI

GROUP

- GROUP SALES TURNOVER OF OVER US$ 300 MILLION

- OFFICES IN KOLKATA, MUMBAI, KANDLA AND SINGAPORE

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ABOUT KUNJAL GROUP

1


-SD

- KEMPAR ENERGY PTE LTD – SINGAPORE : TRADING, SOURCING AND

LOGISTICS ACTIVITIES.

- ACTIVE IN INTRA-ASIA AND DEEP SEA TRADE APART FROM

SOURCING FOR INDIAN REQUIREMENTS.

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0

ABOUT KUNJAL GROUP

2


-SD

PRODUCTS TRADED

- TOLUENE - N-HEXANE

- MIX XYLENE - MDC

- BENZENE - N-BUTANOL

- PHENOL - IPA

- ACETONE - CAUSTIC SODA

- NORMAL PARAFFIN - METHANOL

- C9 - BUTYL ACRELATE

- ANILINE - OX

- MEG / DEG - DAA

- LINEAR ALKYL BENZENE (LAB) - ACETIC ACID

- POLYSTER FIBRE

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ABOUT KUNJAL GROUP


KEY PARTNERS

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ABOUT KUNJAL GROUP


CONTACT US:

EMAIL: [email protected] | [email protected]

WEB WWW.KUNJAL.COM

YAHOO: NIK_KEMPAR

mailto:[email protected]



http://WWW.KUNJAL.COM/

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