Maleic Anhydride Chain - World Market Overview

Chemicals Committee Meeting at APIC 2015

Seoul, 8 May 2015

(Anna) Zhao Na

APIC 2015

AGENDA
Feedstock Butane & Benzene Price Trends vs. Crude Oil
Butane and Benzene Based Production Economics
Overview of World Supply & Demand Conditions
UPR and Other Applications
Conclusions

Source: Tecnon OrbiChem

APIC 2015

WTI & BRENT CRUDE OIL PRICES 2005-2016

(US EIA Short Term Forecast)
$/bbl
140

Brent

120

100

WTI

80

60

40

20

0
2005

2006

2007

Source: US EIA

2008

2009

2010

2011

2012

2013

2014

2015

2016

APIC 2015

US N-BUTANES & CRUDE OIL PRICES

$/ton
1,200

US n-Butanes
1,000

Brent Crude

800

600

WTI Crude

400

200

0
2005

2006

2007

2008

Source: Tecnon OrbiChem

2009

2010

2011

2012

2013

2014

2015

APIC 2015

US N-BUTANES vs WTI CRUDE OIL PRICES

N-Butanes ($/ton)
1,100
1,000
900
800
700
600
500
400
300
30

40

50

60

70

80

90

100

110

120

130

140

WTI ($/bbl)
Source: Tecnon OrbiChem

APIC 2015

WE MIXED BUTANES, BENZENE

& BRENT CRUDE OIL PRICES
$/ton
1,600

WE Benzene

1,400
1,200

WE Mixed
Butanes

1,000
800

Brent Crude

600
400
200
2006

2007

2008

Source: Tecnon OrbiChem

2009

2010

2011

2012

2013

2014

2015

APIC 2015

CHINA BENZENE, ASIA BUTANE

& BRENT CRUDE OIL PRICES
$/ton

1,800

Petroleum Benzene

1,600
1,400

Coal Benzene

1,200
1,000

Asia Butane

800

Brent Crude

600
400
200
0
2006

2007

2008

2009

Source: Tecnon OrbiChem

2010

2011

2012

2013

2014

2015

APIC 2015

UNITED STATES MALEIC ANHYDRIDE MARGIN

OVER 1.10 x BUTANE
$/ton
2,000

US Maleic
Anhydride
1,500

1.10 x US
Butane
Margin over
1.10 x Butane

1,000

500

0
2006

2007

2008

2009

Source: Tecnon OrbiChem

2010

2011

2012

2013

2014

2015

APIC 2015

CHINA MALEIC ANHYDRIDE MARGIN

OVER 1.15 x BENZENE
$/ton
2,000

China
Maleic
Anhydride

1,700
1,400

1.15 x China
Coal Benzene

1,100

Margin over
1.15 x China Coal
Benzene

800
500
200
-100
2006

2007

2008

2009

Source: Tecnon OrbiChem

2010

2011

2012

2013

2014

2015

APIC 2015

CHINA MALEIC ANHYDRIDE MARGIN

OVER 1.14 x BUTANE
$/ton
2,000

1,600

China
Maleic
Anhydride

1,200

1.14 x Asia
Butane
Margin over
1.14 x Butane

800

400

0
2006

2007

2008

2009

Source: Tecnon OrbiChem

2010

2011

2012

2013

2014

2015

APIC 2015

WORLD MALEIC ANHYDRIDE

SUPPLY & DEMAND BY REGION
1,000 Metric Tons
3,000

World Capacity
North America

2,500

Production | Consumption
2,000

Northeast Asia
S & SE Asia
ME & Africa

1,500

East Europe
1,000

West Europe
South America

500

China
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Source: Tecnon OrbiChem

APIC 2015

WORLD MALEIC ANHYDRIDE CAPACITY BY REGION

1,000 Metric Tons
North America
3,000

Northeast Asia
S & SE Asia
ME & Africa

2,000

East Europe
West Europe
South America

1,000

China
0
2010

2011

2012

2013

Source: Tecnon OrbiChem

2014

2015

2016

2017

2018

2019

2020

APIC 2015

NORTH AMERICA MALEIC ANHYDRIDE

SUPPLY & DEMAND
1,000 Metric Tons
500

Capacity
Consumption

400

Production
300

200

100

0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Source: Tecnon OrbiChem

APIC 2015

WEST EUROPE MALEIC ANHYDRIDE

SUPPLY & DEMAND
1,000 Metric Tons
400

Capacity
Consumption
300

Production
200

100

0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Source: Tecnon OrbiChem

APIC 2015

CHINA MALEIC ANHYDRIDE SUPPLY & DEMAND

1,000 Metric Tons
Capacity

2,000

Consumption
1,500

Production

1,000

500

0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Source: Tecnon OrbiChem

APIC 2015

CHINA BUTANE BASED MALEIC ANHYDRIDE

CAPACITY GROWTH & NEW PLANTS
7%

Capacity
(ktpa)

Start-Up
Date

30

Apr 2013

100

Nov 2013

Ningbo Jiangning

80

End 2013

Puyang Shengyuan

50

Aug 2014

1,000 Metric Tons

Shandong Huifeng

50

Dec 2014

2,000

Dongying Qifa

30

Mar 2014

1,500

Dongyin Kede

30

Aug 2014

Shandong Yongshunda

30

Nov 2014

Yizheng Chemical Fibre

100

Mid 2015

Shandong Chenxi

50

H2 2015

Jiangsu Yabang

60

H1 2016

Panjin Union (UPC)

80

End 2015

43%

Producer
Zhuhai Unicizers (UPC)

93%

57%
2010

Zibo Qixiang Tengda

2016

Butane

Feedstock

Benzene

1,000
500
0

2010

2012

2014

2016

Source: Tecnon OrbiChem

2018

2020

APIC 2015

TOP 10 MALEIC ANHYDRIDE PRODUCERS 2015

Company

Location

Huntsman Corporation
Jiangsu Yabang Group
Bohai Chemicals
Sasol/Huntsman
Polynt
Shanxi Tayiuan Qiaoyou Chemicals
Zibo Qixiang Tengda Chemical Co.

United States
China
China
Germany
Italy
China
China

154
150
140
105
101
100
100

5.5
5.4
5.0
3.8
3.6
3.6
3.6

Ningbo Jiangning Chemical

China
Shandong Hongxin Chemical Industry Co. China
Lanxess
United States
Total Capacity of Top 10
Total Capacity World

80
76
73
1,079
2,800

2.9
2.7
2.6
38.5

Source: Tecnon OrbiChem

Capacity
(ktpa)

% of
Total

APIC 2015

WORLD MALEIC ANHYDRIDE NET TRADE

2010 - 2014
1,000 Metric Tons
100
80

2010

60

2011

Source: Tecnon OrbiChem

2014
China

-80

2013

NE Asia

-60

2012

S & SE Asia

-40

E Europe

-20

N America

ME & Africa

20

W Europe

S America

40

APIC 2015

WORLD PURE MALEIC ANHYDRIDE APPLICATION

BY REGION 2010 & 2014
1,000 Metric Tons
800

UPR
600

BDO
Others

400

North
South
West
America America Europe

Source: Tecnon OrbiChem

East
Europe

ME &
Africa

S & SE
Asia

NE
Asia

2014

2010

2014

2010

2014

2010

2014

2010

2014

2010

2014

2010

2014

2010

2014

2010

200

China

APIC 2015

UPR MARKET
UPR squeezed by feedstocks with very volatile pricing
o Styrene is the biggest component (at more than 35%) of UPR and more
volatile than maleic
Demand should be stimulated by lower prices and
a pick-up in downstream applications including:
o Pipe (construction), Marine
o Wind Energy, Automotive
UPR still faces challenges:
o In Europe & US due to environmental concerns over styrene in
particular.
o In Asia from oversupply - Chinese UPR capacity ran at 50% in 2014 but
demand growth slows down further
Bio-based UPR is a long way off but opportunities exist in styrene-free UPR
and other initiatives.

Source: Tecnon OrbiChem

APIC 2015

EUROPEAN ORTHOPHTHALIC RESIN

COST OF RAW MATERIAL 2004-2015
/ton
1,500

1,200

900

600

300

0
2004

2005

2006

2007

2008

2009

2010

Product
Location
Composite
West Europe
Styrene
West Europe
Monopropylene Glycol West Europe
Phthalic Anhydride
West Europe
Maleic Anhydride
West Europe

Source: Tecnon OrbiChem

2011

2012

2013

2014

Definition

Factor

Contract Barges ARA FOB

Industrial Grade Contract DDP
Domestic Molten DDP
Molten Contract Price DDP

0.34
0.27
0.25
0.14

2015

APIC 2015

UPR MARKET SEGMENTATION

Tanks &
Pipes
18%

Building
21%

Electrical
8%

Industrial
10%

Marine
3%

Marine
9%

Others
8%
Gelcoats
7%

Infrastructure
39%

Artificial
Marble
15%

Europe

Transport
14%

Others
11%
Architecture
&
Structure
32%

Transport
5%

China

Source: Cefic European UP/VE Resin Association; Chinese Society for Composite Materials

APIC 2015

CONCLUSIONS
The impact of low benzene prices on the global maleic market will be felt in
terms of demand improvement ,while butane is likely to maintain its cost
advantage over benzene as a maleic feedstock in the long run.
The global maleic market has been showing modest improvement in the past
few years in US and Europe, strong growth in the Middle East and Southeast
Asia and slowing growth in China
High transportation costs, for heating etc. mean that maleic remains a largely
regional market. However, new trading opportunities have emerged amid
lengthening supply in China and Northeast Asia and steady demand in
Middle East and Southeast Asia.
Butane based maleic has continued to grow in China due to its cost
advantage over benzene and easier availability of feedstock butane - both of
which could lead to increasing maleic exports from China.
UPR has maintained its dominant share of maleic consumption, but growth
has slowed in China.
Source: Tecnon OrbiChem

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