Global benzene market: Changes and trade flows

Transcription

1 Global benzene market: Changes and trade flows Ng Baoying Senior Editor Asia Petrochemicals 2013 Platts, McGraw Hill Financial. All rights reserved.

2 Global Panoramic Picture Strength in the US draws volumes from Asia, and Europe Regional Zoom-In Production Margins And The State Of Derivatives Demand US Shale Storm vs Asian Aromatics Monsoon Platts Outlook For Regional Balances

3 1. Global Panoramic Picture Strength in the US draws volumes from Asia, and Europe

4 3-Jan-12 3-Feb-12 3-Mar-12 3-Apr-12 3-May-12 3-Jun-12 3-Jul-12 3-Aug-12 3-Sep-12 3-Oct-12 3-Nov-12 3-Dec-12 3-Jan-13 3-Feb-13 3-Mar-13 3-Apr-13 3-May-13 3-Jun-13 3-Jul-13 3-Aug-13 3-Sep-13 3-Oct-13 3-Nov-13 3-Dec-13 3-Jan-14 3-Feb-14 3-Mar-14 3-Apr-14 3-May-14 3-Jun-14 3-Jul-14 3-Aug-14 Return of the global disconnect Benzene FOB Korea Marker Benzene FOB USG Mo02 $/mt 1000 Benzene CIF ARA 900 Source: Platts 4

5 3-Jan-12 3-Feb-12 3-Mar-12 3-Apr-12 3-May-12 3-Jun-12 3-Jul-12 3-Aug-12 3-Sep-12 3-Oct-12 3-Nov-12 3-Dec-12 3-Jan-13 3-Feb-13 3-Mar-13 3-Apr-13 3-May-13 3-Jun-13 3-Jul-13 3-Aug-13 3-Sep-13 3-Oct-13 3-Nov-13 3-Dec-13 3-Jan-14 3-Feb-14 3-Mar-14 3-Apr-14 3-May-14 3-Jun-14 3-Jul-14 3-Aug-14 FOB US Gulf vs FOB Korea Benzene Spread between Asia and US benzene widens and stays wide Benzene FOB Korea Marker Benzene FOB USG Mo02 $/mt 950 Source: Platts 5

6 US Benzene Price Spread To Asia Wide FOB USG less FOB Korea Arbitrage window open for about five months Arbitrage window shuts for three weeks then reopens amid firm US prices Source: Platts 6

7 US-Asia Arbitrage Margin (Less Freight) Margins stay firm for most of 2014 apart from a dip in June Arbitrage Margin -150 Source: Platts 7

8 3-Jan-12 3-Feb-12 3-Mar-12 3-Apr-12 3-May-12 3-Jun-12 3-Jul-12 3-Aug-12 3-Sep-12 3-Oct-12 3-Nov-12 3-Dec-12 3-Jan-13 3-Feb-13 3-Mar-13 3-Apr-13 3-May-13 3-Jun-13 3-Jul-13 3-Aug-13 3-Sep-13 3-Oct-13 3-Nov-13 3-Dec-13 3-Jan-14 3-Feb-14 3-Mar-14 3-Apr-14 3-May-14 3-Jun-14 3-Jul-14 3-Aug-14 European Prices Hit Record Highs 1600 CIF ARA Benzene price , $/mt Benzene CIF ARA 1000 Source: Platts 8

9 Jan-2012 Feb-2012 Mar-2012 Apr-2012 May-2012 Jun-2012 Jul-2012 Aug-2012 Sep-2012 Oct-2012 Nov-2012 Dec-2012 Jan-2013 Feb-2013 Mar-2013 Apr-2013 May-2013 Jun-2013 Jul-2013 Aug-2013 Sep-2013 Oct-2013 Nov-2013 Dec-2013 Jan-2014 Feb-2014 Mar-2014 Apr-2014 May-2014 Jun-2014 US Pulls European Molecules Too 200 Cross-Atlantic Arbitrage , $/mt Arb Europe-US to M1 Arb Europe-US to M2 Arb US-Europe to M1 Arb US-Europe to M2-300 Source: Platts 9

10 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr One Way Ticket EU-US Trade Flow , mt 80,000 70,000 60,000 EU->US US->EU 50,000 40,000 30,000 20,000 10,000 0 Source: Eurostat 10

11 2. Regional Zoom-In 2.1 US: Production Margins And The State Of Derivatives Demand

12 Jan-2012 Feb-2012 Mar-2012 Apr-2012 May-2012 Jun-2012 Jul-2012 Aug-2012 Sep-2012 Oct-2012 Nov-2012 Dec-2012 Jan-2013 Feb-2013 Mar-2013 Apr-2013 May-2013 Jun-2013 Jul-2013 Aug-2013 Sep-2013 Oct-2013 Nov-2013 Dec-2013 Jan-2014 Feb-2014 Mar-2014 Apr-2014 May-2014 US Benzene & Styrene Trends Benzene Styrene Source: Platts 12

13 US Phenol & Benzene Price Trends US Phenol US Benzene Source: Platts 13

14 mlbs Weaker US Derivative Demand 6,000,000 5,000,000 US benzene and derivative demand BENZENE DEMAND (mlbs) US STYRENE DEMAND (mlbs) US CUMENE DEMAND (mlbs) 4,000,000 3,000,000 2,000,000 1,000,000 - Source: Platts 14

15 2.2. Asia: Strong Production Economics

16 Asia Benzene To Naphtha Spread Healthy Benzene-naphtha spread Benzene FOB Korea Marker Naphtha C+F Japan Cargo Source: Platts 16

17 Asia Benzene Rise Past PX Temporarily 2000 PX prices weaken on soft downstream. Run rate reduction eats into benzene supply PX-Benzene spread Paraxylene FOB Korea Marker Benzene FOB Korea Marker Source: Platts 17

18 Asia Toluene Attractive For Benzene Production Benzene-Toluene spread Benzene FOB Korea Marker Toluene FOB Korea Marker Source: Platts 18

19 Asia Styrene-Benzene Spread Starts To Narrow Styrene-benzene spread Benzene FOB Korea Marker Styrene FOB Korea Marker Spreads start to come under pressure after experiencing period of strength Source: Platts 19

20 Asia Phenol Margins Negative Benzene FOB Korea Marker Phenol CFR China Weekly Phenol-benzene margins Breakeven Source: Platts

21 2.3. Europe: Incremental Production Comes Back

22 Europe Recuperates Strength in Q1 200 CIF ARA M1/M2 Structure , $/mt Source: Platts 22

23 Styrene Production Margins Sink In Q ARA Styrene/Benzene Spread , $/mt Source: Platts 23

24 Structural Tightness Persists 1800 CIF ARA Benzene/Naphtha Spread , $/mt Source: Platts 24

25 Jan-2012 Feb-2012 Mar-2012 Apr-2012 May-2012 Jun-2012 Jul-2012 Aug-2012 Sep-2012 Oct-2012 Nov-2012 Dec-2012 Jan-2013 Feb-2013 Mar-2013 Apr-2013 May-2013 Jun-2013 Jul-2013 Aug-2013 Sep-2013 Oct-2013 Nov-2013 Dec-2013 Jan-2014 Feb-2014 Mar-2014 Apr-2014 May-2014 Jun-2014 Incremental Production Restarts 1600 ARA Benzene/TDI Grade Toluene Spread , $/mt Source: Platts 25

26 3. US Shale Storm vs Asian Aromatics Monsoon 3.1. Upcoming Challenges for US Benzene

27 US Shifts To Light Feeds 69% growth in ethane based output 32% decrease in naphtha based output Pygas to decrease 40% Crude C4 to decrease 20% Propylene to decrease 20% Source: Platts Petrochemical Analytics 27

28 Yields From Steam Crackers Vary With The Feedstock 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Yields by feedstock Ethane Propane Butane Light Naphtha Hydrogen/Fuel Gas Oil Aromatics Crude C4s Propylene Ethylene 28

29 Benzene Production ('000 MT/Year) US Benzene Production At Cracker 400 Benzene Production Ethane Propane Butane Full-range Naphtha Naphtha Gas Oil

30 US Benzene Demand Will Outpace Supply, Increasing Volatility & Dependence On Imports Source: Platts Petrochemical 30

31 3.2. Asia PX/BZ Expansions

32 South Korea s Benzene Exports Surge To The US But China s Tumble 120, , ,000 10,000 80,000 South Korea exports to US South Korea exports to China South Korea exports to US (Line) South Korea exports to China (Line) 1,000 60, ,000 20, Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Source: South Korea customs 1 32

33 Asia PX Expansions Benzene Oversight Country Company Location Quarter BZ TL MX PX BZ TL MX PX BZ TL MX PX China Sinopec Hainan Q1 600 PetroChina Yangzhou Sinopec Zhenhai China Total S.Korea SK Innovation (July) Incheon Q SK Energy/JX Nippon Oil (June) Ulsan Q Samsung Total (June) Daesan Q GS Caltex/Taiyo Oil/Showa Shell Yeosu S. Korea Total India ONGC (Aug/Sep) Mangalore Q Reliance Indian Oil Group Dahej, Gujarat Vadodara, Gujarat Q Q1 370 India Total SEA Jurong Aromatics (Aug) Singapore Q PetroViet Vietnam Q PTT Global Chemicals Thailand SEA Total Total BZ start up in 2014: 1.84 mln mt Source: Platts Petrochemical Analytics 33

34 3.3. Europe benzene movements

35 Western Europe Benzene Balance 000 mt Source: IMF, CEFIC, Platts Petrochemical Analytics 35

36 EU Benzene Exports/Imports mt Source: Eurostat 36

37 EU Benzene Exports/Imports kt Source: Eurostat 37

38 European Crackers Are Less Competitive Source: Bentek, Platts Petrochemical Analytics 38

39 Western European Deficit To Increase WE Europe is expected move from a balanced position to a growing deficit Source: IMF, CEFIC, Platts Petrochemical Analytics 39

40 Key Middle East Aromatics Projects July 2014 Q Could be the growing supplier to other regions Source: Platts 40

41 Conclusions Downwards push for global benzene Weakness in downstream demand Additional capacities to come onstream in Asia, Middle East Upwards push for global benzene Tight US to remain the main global driver Europe production to decline amid lower competitiveness Potentially reduced run rates at new capacities in Asia 41

42 Thank you. Editor contact information: Ng Baoying Yahoo Messenger: benzene_platts Phone: Platts, McGraw Hill Financial. All rights reserved.