styrene market in asia - knak
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1
Styrene Market in Asia
Masayoshi AkiyamaSM Business Department NIHON OXIRANE CO.,LTD.
The 3rd Asian Aromatics & Derivatives ConferenceSINGAPORE JUNE 28th-29th 2007
2
NIHON OXIRANE
Incorporated : August 25,1972
Shareholders : Sumitomo chem 60%
Lyondell 40%
Capacity : SM 425 kt/Y ( CSM 110/270 kt/Y )
PO 181 kt/Y (Sumitomo 200 kt/Y )
PG 100 kt/Y
Employees : 80 people
4
2006 SM Demand by Region
10%20%
30%
18%
22%
China
N.E.Asia
N.America
W.Europe
Others
2006 SM World Demand = 25mil
28%
24%31%
4% 13%
1997 = 18mil
+ 7 mil (+ 39%)
5
G/R of SM Demand by Region
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
World N.America W.Europe N.E.Asia
6
2006 SM World Trade
EuropeNE ASIA
SE ASIA
India
M.EAST
USA
Middle & South
AMERICA
290kt
530kt
830kt
290kt
230kt170kt
400kt50kt
CANADA
7
SM Demand in China
0
1000
2000
3000
4000
5000
6000
7000
8000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
KT/Y
Production SM Import PS Import ABS Import EPS Import
1st stage 2nd stage 3rd stage
8
SM & Derivatives Capacity in China
1999 2004 2006SM 675 974 2469PS 986 1556 2091EPS 677 1987 2420ABS 285 1185 1380UPR 674 868 1018SB LATX 93 182 341SBR 370 475 613
10
Overview - ConclusionSM in Asia has occupied an important position in the World. Asia has absorbed the excess production in US & M.E.Asia.
Asia,especially China, has been the engine of growth.
EPS is key industry for Chinese SM biz.China has just entered into 3rd stage.
1st stage : ~2000 import polymers 2nd stage : 2001~2005 import monomer 3rd stage : 2006~ stand on own production
12
SM Spot Price in Asia (CFR Taiwan)
528.2
933.2
1193.5
0
200
400
600
800
1000
1200
1400
1600
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
$/T
SM CFR TWN 5 years average year average
13
Crude (WTI) & Naphtha (MOPJ)
0
10
20
30
40
50
60
70
80
90
100
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Crude ($/bbl)
0
100
200
300
400
500
600
700
Naphtha ($/T)
Naphtha WTI
14
Price Spread between SM & Bz
0
200
400
600
800
1000
1200
1400
1600
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
$/T
SM-BZ SM CFR TWN BZ CFR TWN 10 years average
15
Margins of SM Chain in Asia
0
100
200
300
400
500
600
700
800
900
10001Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
$/T
Ethylene Benzene Styrene Polystyrene
Ethylene = (C2 - MOPJ)*0.3Benzene = (Bz - MOPJ)*0.8SM = SM- Ethylene - BenzenePS = PS - SM
16
PS Price & RMM in Asia
0
200
400
600
800
1000
1200
1400
16001Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
PS CFR F.E.Asia($/T)
0
50
100
150
200
250
300
350
400
PS RMM ($/T)
PS RMM PS
17
World Incremental Demand by Derivatives
-500
0
500
1000
1500
2000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
KT/Y
PS EPS ABS others
18
Polymer Price in Asia
400
600
800
1000
1200
1400
1600
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
$/T
PS PE PP PVC
19
Review - ConclusionThe long range view;
~1999 PS enjoyed the good margins
2000~2003 Expansion of SM derivatives in China
boosted SM margin
2004~ High raw materials have squeezed
the margins of SM chain
PS is still important industry for SM,
however, no growth and no margin.
Weak PS has set ceiling for SM.
21
Frequent Questions
Is China able to continue their growth ?
Will the balance of SM be long ?
Will POSM’s competitiveness continue?
Who is able to survive ?
22
Is China able to continue their growth ? → Yes,however…
SM G/R in China
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
1998 1999 2000 2001 2002 2003 2004 2005 2006
G/R (%)
0
200
400
600
800
1000
1200
IncrementalDemand (KT/Y)
Incremental demand SM G/R GDP
23
Will the balance of SM be long ? → Yes !
0
500
1000
1500
2000
2500
3000
2006 2007 2008 2009 2010
KT/Y
Incremenatl Capacity Incremental Demand (+5.0%)
Incremental Demand (+9%)
24
SM Expansion Plan in Asia
2007 Garson Hainan China Jan 80Samsung-Total Korea Jun 200FCFC Taiwan Feb 600CP-Chem S.Arabia end 777Pars Iran end 600
2008 Shuanliang China 1st Q'ter 210Sichuan Meifang China Mid 200TSMC China Mid 350SECCO China Mid 150Lotte korea Mid 150Kuwait SM Kuwait 4th Q'ter 450
2009 Dushanzi China 320Jilin China 210Qatar PC Qatar 600
2010 ZRCC China 620
25
Will POSM’s competitiveness continue?→ No.
0
100
200
300
400
500
600
2007 2008 2009 2010 2011
KT/Y
Incremenatl Capacity Incremental Demand
SKC +100Rabigh +200
ZRCC +285DOW +390
2005 Demand in Asia = 2.4mil G/R = +8%PO balance in Asia will be stable till 2009, but…
26
Who is able to survive ? → Integrated producer
0
200
400
600
800
1000
1200
1400
1600
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
$/T
SM CFR TWN SM RMM(C2/BZ) SM-NAP
27
Forecast - Conclusion
The growth will continue in China,
however, the G/R will decrease.
SM balance will be long, and some producers,
especially non-integrated, will face difficulties.
After 2010, POSM’s competitiveness will
be tested.
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