Changing Butadiene Markets by Bernard Bekaert, Chairman & CEO 20 th Asian Petrochemical Summit Singapore, 26-27 September 2013
The Butadiene Roller Coaster (1) APS 09/2013 2
USD/ MT The Butadiene Roller Coaster (2) 5000 4500 4000 3500 The Butadiene Roller Coaster C2, C3 and BD delta versus Naphtha C2 C3 BD MAX 704 854 3917 MIN 261 120-307 AVG 467 503 1250 3000 2500 2000 C2 SPOT CIF NWE C3 SPOT CIF NWE BD SPOT FOB ARA Naphtha CIF NWE 1500 1000 500 0 APS 09/2013 3
Content 1. Specialized Logistics & Trading Business Model & Company Structure The Transatlantic Connection & Global Growth 2. Present Butadiene Supply & Demand Global Supply & Demand Naphtha Cracker Ethane Cracker Derivatives 3. Drivers for Change Shale Gas Oil & Gas Disconnect New crackers with different feedstocks Alternative Production Processes 4. Impact on Global Trade Flows 5. Conclusion APS 09/2013 4
1. Specialized Logistics & Trading C4U Trade is a logistic service provider for C4 Olefins. We focus on creating and sharing recurrent value. Founded in 2010 in Europe and growing globally Facilitating between producers and consumers. C4U TRADE APS 09/2013 5
1.2 The Transatlantic Connection Aggregate, ship & distribute APS 09/2013 6
1.3 Structured for Global Growth C4U TRADE INTERNATIONAL, AG ZUG, SWITZERLAND C4U TRADE USA C4U TRADE EUROPE C4U TRADE MIDDLE EAST C4U TRADE ASIA HOUSTON, TEXAS LEUVEN, BELGIUM UAE (2014) SINGAPORE (2014) APS 09/2013 7
Content 1. Specialized Logistics & Trading Business Model & Company Structure The Transatlantic Connection & Global Growth 2. Present Butadiene Supply & Demand Global Supply & Demand Naphtha Cracker Ethane Cracker Derivatives 3. Drivers for Change Shale Gas Oil & Gas Disconnect New crackers with different feedstocks Alternative Production Processes 4. Impact on Global Trade Flows 5. Conclusion APS 09/2013 8
2.1 Global Supply/ Demand 2013 (KT) BD Extraction Capacity BD Production Domestic Demand Balance North America 2.387 1.544 1.791-247 South America 460 345 296 49 West Europe 2.406 2.013 1.809 204 Central Europe 278 182 184-2 Middle East 382 283 70 213 India 366 240 185 55 North East Asia 6.189 4.955 5.221-266 South East Asia 570 436 379 57 13.038 9.998 9.935 63 APS 09/2013 9
2.2 Cost+: Naphtha Cracking Crude Oil R E F I N E R Y Naphtha 3000kT C R A C K E R Lights 300kT CC4 1000kT C2 500kT C3 Pygas Butadiene Extraction Rough Cost+ Values Fraction Price Unit Crude Oil 100 $/bbl Crude Oil 700 $/mt Naphtha 820 $/mt Crude C4 940 $/mt Butadiene 1060 $/mt 270kT Raffinate-1 130kT Butadiene APS 09/2013 10
2.3 Cost+: Ethane Cracking 1300kT Ethane C R A C K E R Lights 1000kT C2 20kT C3 30kT Crude C4 Pygas Rough Cost+ Values Fraction Price Unit Ethane 30 cts/gal Ethane 220 $/mt Crude C4 340 $/mt Butadiene 460 $/mt Butadiene Extraction 20kT BD 10kT R1 APS 09/2013 11
2.4 Butadiene Derivatives Global Butadiene Demand (2012): 10 MMT 5% 17% 28% PBR esbr 12% ssbr SBL 9% 6% 23% ABS ADN SBS, NBR, MBS,... APS 09/2013 12
Content 1. Specialized Logistics & Trading Business Model & Company Structure The Transatlantic Connection & Global Growth 2. Present Butadiene Supply & Demand Global Supply & Demand Naphtha Cracker Ethane Cracker Derivatives 3. Drivers for Change Shale Gas Oil & Gas Disconnect New crackers with different feedstocks Alternative Production Processes 4. Impact on Global Trade Flows 5. Conclusion APS 09/2013 13
3.1 Oil & Gas Disconnect APS 09/2013 14
3.2 Gas vs. Liquid Cracking APS 09/2013 15
3.3 Changes 2013-2020: Ethylene ETHYLENE 2010-2020 (KT) 50.000 40.000 30.000 20.000 10.000 South East Asia West Europe Middle East North America North East Asia 0 2010 2015 2020 NOTE: world (million tons): 2010: 122 2015: 145 2020: 175 APS 09/2013 16
3.4 Changes 2013-2020: Crude C4 s Crude C4 as Butadiene 2010-2020 (KT) 7.000 6.000 5.000 4.000 3.000 2.000 1.000 South East Asia West Europe Middle East North America North East Asia 0 2010 2015 2020 NOTE: world (million tons): 2010: 12 2015: 13 2020: 16 APS 09/2013 17
3.5 Changes 2013-2020: Butadiene BUTADIENE 2010-2020 (KT) 8.000 7.000 6.000 5.000 4.000 3.000 2.000 1.000 0 2010 2015 2020 South East Asia West Europe Middle East North America North East Asia NOTE: world (million tons): 2010: 10 2015: 12 2020: 14 APS 09/2013 18
3.6 Major changes 2013-2020 Shale gas in the US will put cost competitive C2 and C2 derivatives on the global market US will become less dependent on C4 imports New capacities in the MDE will have heavier feedstocks creating strong potential for C4 Olefins and derivatives Europe under pressure from US and MDE. New BD capacities may face lack of Crude C4 s Asian countries growing and investing to become self-sufficient Alternative technologies (BDH, dimerization, bio) APS 09/2013 19
3.7 Alternative Production Processes BDH Butane-based BDH Butylene-based FCC/ Raffinate-2/ Ethylene to Butylene Bio Butadiene Less than 10% of global production, but may have high impact on pricing APS 09/2013 20
Content 1. Specialized Logistics & Trading Business Model & Company Structure The Transatlantic Connection & Global Growth 2. Present Butadiene Supply & Demand Global Supply & Demand Naphtha Cracker Ethane Cracker Derivatives 3. Drivers for Change Shale Gas Oil & Gas Disconnect New crackers with different feedstocks Alternative Production Processes 4. Impact on Global Trade Flows 5. Conclusion APS 09/2013 21
4. Global BD Trade Flows APS 09/2013 22
Content 1. Specialized Logistics & Trading Business Model & Company Structure The Transatlantic Connection & Global Growth 2. Present Butadiene Supply & Demand Global Supply & Demand Naphtha Cracker Ethane Cracker Derivatives 3. Drivers for Change Shale Gas Oil & Gas Disconnect New crackers with different feedstocks Alternative Production Processes 4. Impact on Global Trade Flows 5. Conclusion APS 09/2013 23
5. Conclusion Butadiene is and remains a cracker coproduct Volatility is due to limited liquidity and a lack of efficient logistics Small changes in S/D balances can cause huge effects on pricing The world Crude C4 s can supply 120% of the needed Butadiene Alternative technologies may set the future global price APS 09/2013 24
Thank you for your interest! 25