Argus DeWitt Toluene & Xylenes Annual 2016

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Petrochemicals

Summary

Key Findings

As new paraxylene capacity in Asia-Pacific and the Middle East – in excess of 6mn t/yr – came on stream during 2014 and 2015 in response to robust polyethylene terephthalate (PET) global growth and high paraxylene prices during the last decade, a surge in benzene prices in 2014 turned producers’ focus to maximizing benzene output at the expense of paraxylene. The PX market regained momentum in 2015 and prices returned to levels of $140/t above benzene after averaging at parity the year before; a strategic change in focus from producers caused excess volumes of benzene to flood the global market and thereby depressed prices to levels not seen since 2009. Higher demand growth rates for PET compared to benzene derivatives are expected to keep the global paraxylene consumption growing at nearly 5pc per year for the next 10 years.

In 2014, the world crude oil balance slipped into an excess supply situation as US production continued to expand and Iraq returned to the market. OPEC, led by Saudi Arabia, decided to defend market share rather than reduce production and rebalance the market. This resulted in world oil prices falling from $100/bl in mid 2014 to below $30/bl in February. PX market prices tend to correlate/track oil prices, while PX demand growth is negatively correlated to crude prices, meaning that as crude prices fall, PX demand growth tends to accelerate.

Global toluene and mixed xylenes markets are expected to benefit from both polyester and gasoline markets moving forward. Toluene as a chemical feedstock for benzene and paraxylene production is expected to grow at a 6.2pc average annual growth rate through 2025. Toluene as gasoline blendstock is expected to grow in tandem with regional gasoline consumption with sporadic spikes as global octane demand grows at uneven rates.

The Argus DeWitt 2016 Toluene & Xylenes Annual examines these trends in detail and has identified several key findings, including:

• World capacity to produce paraxylene is still expected to grow at a slower rate compared to the capacity to consume it in PTA. During the extended 2016-25 forecast period, the capacity to produce paraxylene will increase by 18mn t to 71.5mn t globally. Asia-Pacific will account for 75pc of this increase in paraxylene production capacity. The capacity to consume paraxylene into PTA is forecast to grow by 19mn t, with Asia-Pacific comprising 65pc of this increase. However, the demand growth for PTA is expected to outstrip paraxylene capacity increases over the forecast period, which will cause PTA production margins to remain limited.

• Countries with the largest amount of new PX capacity from 2016-20 include China (9.5mn t), Saudi Arabia (2mn t), India (1.65mn t) and the UAE (1.4mn t). New refinery investments, especially in India and the Middle East, are behind this capacity growth in PX.

• Despite heavy PX capacity additions in China, the country will remain a net im-porter at 12.3mn t in 2016 and increasing to 16.3mn t/yr in 2025. The slowdown of China’s economy and the ability of China’s producers to manage their overcapacity of PTA (growing at an average annual growth rate of 7.1pc) will be crucial for the PET sector in the forecast period.

Argus DeWitt Toluene & Xylenes Annual 2016

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Key Findings

Key Features

Table of Contents

Additional Services

• Orthoxylene continues to compete with paraxylene for mixed xylenes feed. As downstream investment in phthalic anhydride (PA) has not been a priority, world demand growth rates will average 1.3pc per year between 2016-20.

• Overall usage of mixed xylenes for gasoline blending increased significantly in Asia-Pacific in 2015 at the detriment of non-integrated PX production. Many new mixed xylenes plants in China are not entering the merchant market, choosing to build paraxylene capacity to consume mixed xylenes production.

The Argus DeWitt Toluene & Xylenes Annual 2016 covers 2011 through 2025 and contains the following major components:• A history and forecast through 2020 of the supply and demand balance

for each country that produces or consumes toluene, mixed xylenes, paraxylene and orthoxylene.

• A forecast through 2025 of the supply and demand balance for each region that produces or consumes toluene, mixed xylenes, paraxylene and orthoxylene.

• An overview of regional and world markets, including a demand analysis of all of the major derivatives, including PTA and PA.

• A history and forecast of toluene, mixed xylenes, paraxylene and orthoxylene imports and exports by country through 2020.

• A forecast of toluene, mixed xylenes, paraxylene and orthoxylene imports and exports by region through 2025.

• Analysis of capacity and market changes and trends by country through 2020 and region through 2025.

• Useful technical data that explains the production and economics of each chemical product.

Section 1 Introduction Section 2 Technology Section 3 World summary Section 4 North America Section 5 Central and South America Section 6 Western Europe Section 7 Central and Eastern Europe Section 8 Middle East and Africa Section 9 Asia-Pacific Section 10 United States nameplate capacities Section 11 World nameplate capacities

• Argus DeWitt Toluene and Xylenes Daily - provides market updates featuring deals and market levels in the US, Europe and Asian markets for toluene, para-xylene and mixed xylenes

• Argus Dewitt Toluene, Xylenes and Isomers/PET - a global report that includes freight information, arbitrage economics, plant turnaround and shutdowns, and associated market analysis

• Argus DeWitt Toluene and Xylenes Outlook - 24-month rolling price forecast for benzene and derivatives, toluene, xylenes and derivatives, and related markets like crude, naphtha and gasoline, published montly

Argus DeWitt Toluene & Xylenes Annual 2016

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