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Outlook of China Aromatics - Platts in Petrochemical Industry Revolution of New Coal Chemical Supply...

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  • 16th September 2014

    Amanda Zhao

    Outlook of China Aromatics

  • Recent Trend in China Aromatics 1

    2 Influence Factors of Aromatics

    3

    4

    Conclude and Final Marks

  • Recent Trend in China Aromatics

    1

    4

    Price Features of BTX

    Fundamental of BZ and Arbitrage

    Fundamental of TL & MX and Arbitrage

  • 2014 China BTX Spot Price Trend

    1,150

    1,250

    1,350

    1,450

    1,550

    1,650

    5,800

    6,800

    7,800

    8,800

    9,800

    10,800

    Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Apr-14 Jun-14

    East China TL

    East China BZ

    East China ISO-MX

    East China PTA

    PX CFR China

    China Aromatics Spot Price, 2013-2014 RMB/mt USD/mt

    SourceJYD

  • Import of BZ Declined 14% in H1 2014

    BZ(kt) 2011 2012 2013 Jan-June 2014

    Output of BZ 6,660 6,510 7,140 3,654

    Import of BZ 186 444 887 331

    Export of BZ 110 49 31 36

    Output of Hydrogenation of BZ 2710 3,160 3,920 2,100

    Consumption 9,446 10,065 11,916 6,049

    Import Growth Rate -3.13% 138.71% 99.77% -14.03%

    SourceJYD

  • Arbitrage Window of BZ was Closed since 2014

    -1,500

    -1,200

    -900

    -600

    -300

    0

    300

    7,500

    8,500

    9,500

    10,500

    11,500

    12,500

    Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14

    Spread East China BZ BZ Import Cost

    Asia-China BZ Arbitrage, 2013-2014 RMB/mt

    0

    20,000

    40,000

    60,000

    80,000

    100,000

    120,000

    140,000

    1,100

    1,150

    1,200

    1,250

    1,300

    1,350

    1,400

    1,450

    1,500

    Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14

    BZ Monthly Import Monthly Average Price

    China BZ Import, 2013-2014 USD/mt mt

    SourceJYD SourceJYD

  • Import of TL Increased by 85% in H1 2014

    TL(KT) 2011 2012 2013 Jan-June 2014

    Outputs 5,276 5,273 5,624 2,806

    Imports 655 660 812 690

    Exports 8 7 3 1

    Consumption 5,871 5,918 6,334 3,495

    Export Change -20.99% 0.70% 23.10% 85.48%

    SourceJYD

  • Asia-China TL Arbitrage was Opened Sometimes since 2014

    2012

    -900

    -600

    -300

    0

    300

    7,000

    7,500

    8,000

    8,500

    9,000

    9,500

    10,000

    10,500

    11,000

    Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14

    Spread East China TL TL Import Cost

    Asia-China TL Arbitrage

    RMB/mt

    1,000

    1,100

    1,200

    1,300

    1,400

    1,500

    1,600

    20,000

    40,000

    60,000

    80,000

    100,000

    120,000

    140,000

    160,000

    Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14

    TL Monthly Import Monthly Average Price

    USD/mt mt China TL Import

    SourceJYD SourceJYD

  • Asia-China ISO-MX Arbitrage was Opened in H1 2014

    -1,200

    -900

    -600

    -300

    0

    300

    600

    900

    1,200

    7,000

    7,500

    8,000

    8,500

    9,000

    9,500

    10,000

    10,500

    11,000

    Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14

    Spread East China ISO-MX ISO-MX Import Cost

    Asia-China ISO-MX Arbitrage

    RMB/mt

    1,000

    1,100

    1,200

    1,300

    1,400

    1,500

    0

    20,000

    40,000

    60,000

    80,000

    100,000

    120,000

    Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14

    ISO-MX Monthly Import Monthly Average Price

    China ISO-MX Import

    Unit: mt

    SourceJYD SourceJYD

  • 2 Influence Factors of Aromatics Market

    3

    4

    Macro-economic Background

    Policy in Petrochemical Industry

    Revolution of New Coal Chemical

    Supply & Demand Analysis

    Trading Activity

  • Macro-Economic BackgroundOpportunity for Foreign Investment

    China Capital

    Foreign Capital

    The Sinopec mixed ownership reform could attract a new round of

    investment.

  • Policy in PetrochemicalOil Market Shuffle

    China oil reform caused changes in the demand for aromatic

    Gasoline Upgrade VAT QR Code New Policy

  • Revolution of New Coal Chemical

    Crude Oil

    Naphtha

    Olefin

    Aromatics

    Gasoline

    Coal Methanol

  • Technology Implementation & Cost Feasibility

    Technique

    Project

    Capacity

    Process

    Start Time

    Location

    Methanol to Mixed

    Aromatic

    Inner Mongolia Qinghua

    100,000mt/year

    Shanxi Coal

    Chemical Institute -

    One Step

    2012

    Inner

    Mongolia

    Xinjiang Xinye

    100,000mt/year

    2013

    Xingjiang

    Tangshan Jingjie

    200,000mt/year

    Sep 2014

    Hebei

    Methylation of TL &

    methanol to PX

    Yangzi Petrochemical

    200,000mt/year

    Sinopec Technique

    2012

    Jiangsu

    Methanol to Mixed

    Aromatic

    Ninxia Qinghua

    150,000mt/year

    Shanxi Coal

    Chemical Institute -

    One Step

    H2 2014

    Ningxia

    SourceJYD

  • Technology Implementation & Cost Feasibility

    Project

    Partner

    Capacity

    Products

    Location

    Notes

    Methanol & TL to

    PX

    CAS Dalian Institute &

    CNOOC Huizhou refinery

    200,000mt/year PX

    1mt of Methanol to

    1mt of PX

    Guangdong

    Test running of

    CTA pilot plants

    was done in 2013

    FMTA

    Tsinghua University and

    China Huadian Corporation

    3.07mt of Methanol

    to 1mt of Aromatic

    Shaanxi

    Test running was

    done in 2013

    SourceJYD

  • Oil Reform & Expanded Capacity will Bring Changes in Supply &

    Demand

    Supply in China

    China oil reform may boost the domestic demand for TL & ISO-MX and reduce the public sale

    of TL & MX

    The expanded capacity of PX-BZ in Q4 2014 and 2015 is

    limited in China

    Supply in Northeast Asia

    The import volume of PX and BZ to China in 2015 is still

    unknown.

    The Asian PX profits and the operation rate changes will

    affect the supply of TL & MX.

  • BZ New Consumption will be 3.688 million tons from Aug 2014 to 2015

    Plants Name Capacity of Styrene (KT) Start Time Location Dongming Petrochemical 80 Sep 2014 Shandong

    CNOOC 100 Sep 2014 Hainan

    Abel chemical 500 End of 2014 Jiangsu

    Shandong Yuhuang 200 End of 2014 Shandong

    Ningbo Keyuan 100 End of 2014 Zhejiang

    CNOOC Daxie 250 2015 Zhejiang

    Total 1,230

    Company Name New Capacity of CPL(KT) Start Time Location

    Shijiazhuang Refining 150 Sep 2014 Hebei

    Jvhua Group 100 Sep 2014 Zhejiang

    Shandong Fangming 100 End of 2014 Shandong

    Shandong Luxi 100 H2 2014 Shandong

    Lanhua Technology 200 H2 2014 Shanxi

    Inner Mongolia Qinghua 200 H2 2014 Inner Mongolia

    Sinopec 600 2015 Guangdong

    China National Chemical Engineering Group 200 2015

    Total 1,650

    SourceJYD

  • BZ New Consumption will be 3.688 million tons from Aug 2014 to 2015

    Company Name New Capacity of Phenol(KT) New Capacity of Acetone Start Time Location

    Sinopec Mitsui 250 150 Q4 2014 Shanghai

    FCFC 300 180 Q4 2014 Zhejiang

    CEPSA 250 150 Q4 2014 Shanghai

    Total 800

    Company Name New Capacity of Aniline(KT) Start Time Location

    Ningbo Wanhua 180 Oct 2014 Zhejiang

    Yantai Wanhua 360 Oct 2014 Shandong

    Total 540

    Company Name New Capacity of CYC(KT) Start Time Location

    Huafeng Group 100 Oct 2014 Chongqing

    Huafeng Group 100 Oct-Nov 2014 Liaoning

    Total 200

    SourceJYD

  • BZ Downstream Suffer Losses, Expanded Plants may Delay

    2012

    Styrene Phenol Aniline CYC

    Average Operation Rate 2013 80% 85% 62% 81%

    Average Operation Rate H1 2014 65% 86% 70% 80%

    -1,500

    -1,000

    -500

    0

    500

    1,000

    1,500

    2,000

    2,500

    3,000

    3,500

    Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Apr-14 Jun-14 Aug-14

    SM Phenol Aniline Cyclohexanone

    Product Margin of BZ Derivative RMB/mt

    SourceJYD

  • The Increase Demand of Gasoline Blending for TL is Unknown

    The implementation of new policy and the consumption of oil products will be deciding factors for the demand growth of TL

    Gasoline Blending

    The demand of fine chemicals for TL is relatively stable

    Fine Chemical Industry

    -10%

    -5%

    0%

    5%

    10%

    15%

    8,000

    8,500

    9,000

    9,500

    10,000

    10,500

    11,000

    11,500

    Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14

    China Gasoline Inventories Change on Month

    China Gasoline Inventories kt

    SourceJYD

  • MX DemandThe Demand of PX Remained as Question

    The promotion of environmental friendly waterborne will decrease the demand for solvent-MX.

    Solvent-MX

    The demand of oil blending is supposed to grow in theory, but the actual growth is less than expected.

    Gasoline Blending

    The demand of PX for MX depends on the price spread of ISO-MX and PX.

    PX

  • China Adopted more Naphtha & Condensate, the Demand of MX is not

    that Optimistic

    The two pictures show us the PX profit with ISO-MX and naphtha as feedstock respectively. Apparently,

    the adoption of naphtha is more cost-efficient.

    -200

    0

    200

    400

    1,000

    1,200

    1,400

    1,600

    1,800

    2,000

    Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14

    PX Product Margin PX CFR China

    PX Production Margin (NAP Feedstock) USD/mt

    -200

    -100

    0

    100

    200

    300

    400

    1,000

    1,200

    1,400

    1,600

    1,800

    2,000

    Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14

    PX Product Margin ISO-MX FOB Korean PX CFR China

    USD/mt PX Product Margin (ISO-MX Feedstock)

    SourceJYD SourceJYD

  • Trading ActivityChanges in TL & MX Trading

    Changes in Trading

    RMBTrading activity was less in spot market, but more in Future market.

    USDCFR market activity was lessmore market hedge and turnover in FOB market.

  • 3

    4

    Conclude & Final Marks

  • Outlook: Aromatics Will Form W-shape in 2014

    7,000

    7,500

    8,000

    8,500

    9,000

    9,500

    10,000

    Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14

    East China TL East China BZ East China ISO-MX

    China Aromatics Price Trend, 2014

    Forecast

    UnitCNY/mt

    Source: JYD

  • Company Profile

    JYD Information Co., Ltd. (www.315i.com.cn), as a

    professional information supplier subordinated to JYD Online

    Co., Ltd., takes a leading role in providing bulk commodity

    information, consulting and training & conference service in

    China and is committed to becoming a top bulk commodity

    information provider in the world. At present, JYD has more

    than 600,000 registered business users.

  • Business Coverage

    Oil Coal Mineral Metal Steel

    Chemical Plastic Rubber Fertilizer Agricultural

  • Our Services

    Insight & Commentary

    Price Assessment & Database

    Cost & Margin Intelligence

    Market Studies & Analysis

    Planning & Consultancy Services

    Training & Conferences

  • Cooperation with Platts

    JYD and Platts, the world's largest

    energy information provider, reached

    a strategic cooperation agreement in

    China to build the Chinese spot

    commodities' assessment criteria

    togetherproviding an objective basis

    to strive for international pricing right

    for bulk products in China.

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16 th September 2014 Amanda Zhao Outlook of China Aromatics
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