4/17/2017
1
Global Synthetic Rubber Overview
IISRP AGM 201726 April 2017 – Taipei, Taiwan
Agenda
Topics
Global Capacity & Main Players
New Projects & Expansions
Supply & Demand
Challenges & Trends
2 Confidential
Challenges & Trends
4/17/2017
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Agenda
Topics
Global Capacity & Main Players
New Projects & Expansions
Supply & Demand
Challenges & Trends
3 Confidential
Challenges & Trends
Global Capacity & Main Players
2016 G loba l Capac i ty
4 ConfidentialSource: World Rubber Statistics 2016 - IISRP
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Capac i ty Expans ions , kt
Global Capacity & Main Players
5 ConfidentialSource: World Rubber Statistics 2016 - IISRP
2016 Globa l Capac i ty
Global Capacity & Main Players
6 ConfidentialSource: World Rubber Statistics 2016 - IISRP
4/17/2017
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Capac i ty Expans ions , kt
Global Capacity & Main Players
7 ConfidentialSource: World Rubber Statistics 2016 - IISRP
Main P layers
Global Capacity & Main Players
2016 PRODUCTION CAPACITY
1,991
1,520 1,301 1,226
60
220
50
56
23 COMPANIES = 80%
8 Confidential
793 730 725 692 672 593 588 565 510 500 489 454 415 370 325 320 319 310 270
Source: World Rubber Statistics 2016 - IISRP
4/17/2017
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Capac i ty Expans ions , kt
Global Capacity & Main Players
9 ConfidentialSource: World Rubber Statistics 2016 - IISRP
Agenda
Topics
Global Capacity & Main Players
New Projects & Expansions
Supply & Demand
Challenges & Trends
10 Confidential
Challenges & Trends
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New Projects & Expansions
G loba l Capac i ty
1,000
2,000
3,000
4,000
5,000
6,000
BR Global Capacity and Demand, kt
11 Confidential
Source: World Rubber Statistics 2016 - IISRP
-1,000
02010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Capacity New projects/expansions Iddled Demand
New Projects & Expansions
BR Id led fac i l i t ies - Ch ina
Company Capacity kt/yr Idled dateFujian Fuxiang Chemical 50 Dec - 2013
Sinopec Baling Company 60 Dec - 2013
YPC – GPRO Rubber 100 Jan - 2014
PetroChina Jinzhou 50 Mar - 2014
Shandong Wanda Chemical 30 Apr - 2015
Sh d H N M t i l 100 M 2015
12 Confidential
Source: IISRP China
Shandong Huamao New Materials 100 Mar - 2015
Sinopec Shanghai Gaoqiao 120 Jun - 2016
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New Projects & Expansions
G loba l Capac i ty
ESBR Global Capacity and Demand kt
1,000
3,000
5,000
ESBR Global Capacity and Demand, kt
13 Confidential
Source: World Rubber Statistics 2016 - IISRP
-1,0002010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Capacity New projects/expansions Closure Demand
Globa l Capac i ty
New Projects & Expansions
SSBR Global Capacity and Demand, kt
0
1,000
2,000
3,000
p y
14 Confidential
Source: World Rubber Statistics 2016 - IISRP
02010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Capacity New projects/expansions Demand
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New Projects & Expansions
G loba l Capac i ty
EPDM Global Capacity and Demand kt
0
500
1,000
1,500
2,000
2,500
EPDM Global Capacity and Demand, kt
15 Confidential
Source: World Rubber Statistics 2016 - IISRP
-500
02010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Capacity New projects/expansions Closure Demand
New Projects & Expansions
G loba l Capac i ty
NBR Global Capacity and Demand kt
0
250
500
750
1,000NBR Global Capacity and Demand, kt
16 Confidential
Source: World Rubber Statistics 2016 - IISRP
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Capacity New projects/expansions Demand
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New Projects & Expansions
G loba l Capac i ty
SBC's Global Capacity and Demand kt
0
1,000
2,000
3,000
SBC s Global Capacity and Demand, kt
17 Confidential
Source: World Rubber Statistics 2016 - IISRP
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Capacity New projects/expansions Demand
New Projects & Expansions
G loba l Capac i ty
IR Global Capacity and Demand kt
0
250
500
750
1,000
IR Global Capacity and Demand, kt
18 Confidential
Source: World Rubber Statistics 2016 - IISRP
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Capacity New projects/expansions Demand
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New Projects & Expansions
G loba l Capac i ty
IIR Global Capacity and Demand kt
0
500
1,000
1,500
2,000
IIR Global Capacity and Demand, kt
19 Confidential
Source: World Rubber Statistics 2016 - IISRP
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Capacity New projects/expansions Demand
Agenda
Topics
Global Capacity & Main Players
New Projects & Expansions
Supply & Demand
Challenges & Trends
20 Confidential
Challenges & Trends
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Overcapacity ‐ confirmad facilites idled (China)
Demand Slight recovery during 2016 AP & EMEA
GLOBAL HIGHLIGHTS
EMEAAMERICAS ASIA PACIFIC
BR ‐ Polybutadiene Rubber
BR Global Es t imat ion
Supply & Demand
Demand ‐ Slight recovery during 2016 ‐ AP & EMEA
Supply 67% Operating rate ‐ Improving
Demand
GLOBAL SUPPLY & DEMAND CHINA
18% 22% 60%
61%24%15%
Imp
Exp
21 Confidential
Source: IISRP ChinaSource: IISRP Model
2009 2010 2011 2012 2013 2014 2015 2016
Supply Demand Linear (Demand)
Demand
Supply
2016 2015 2014 2013
Overcapacity ‐ Asia Pacific
D d Sli ht d i 2016 A i P ifi
ESBR ‐ Styrene Butadiene Rubber (Emulsion) HIGHLIGHTS
AMERICAS EMEA ASIA PACIFIC
ESBR Global Es t imat ion
Supply & Demand
Demand ‐ Slight recovery during 2016 ‐ Asia Pacific
Supply 65% Operating rate ‐ Stagnant
Demand
17% 21% 62%
19% 18% 63%
GLOBAL SUPPLY & DEMAND CHINA
Imp
Exp
22 ConfidentialSource: IISRP ChinaSource: IISRP Model
2009 2010 2011 2012 2013 2014 2015 2016
Supply Demand Linear (Demand)
Demand
Production
2016 2015 2014 2013
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Overcapacity ‐ Asia Pacific
D d I i i ll i
SSBR ‐ Styrene Butadiene Rubber (Solution) HIGHLIGHTS
AMERICAS EMEA ASIA PACIFIC
SSBR Globa l Es t imat ion
Supply & Demand
Demand: Improving in all regions
Supply 67% Operating rate ‐ Improving
Demand
30% 26% 44%
26% 32% 42%
GLOBAL SUPPLY & DEMAND CHINA
Imp
Exp
23 ConfidentialSource: IISRP ChinaSource: IISRP Model
2009 2010 2011 2012 2013 2014 2015 2016
Supply Demand Linear (Demand)
Demand
Production
2016 2015 2014 2013
Overcapacity
D d I i AP d EMEA
EPDM ‐ Ethylene‐Propylene‐Diene‐Monomer HIGHLIGHTS
AMERICAS EMEA ASIA PACIFIC
EPDM Global Es t imat ion
Supply & Demand
Demand: Improving ‐ AP and EMEA
Supply 68% Operating rate
Demand
38% 24% 38%
28% 29% 44%
GLOBAL SUPPLY & DEMAND CHINA
Imp
Exp
24 ConfidentialSource: IISRP ChinaSource: IISRP Model
2009 2010 2011 2012 2013 2014 2015 2016
Supply Demand Linear (Demand)
Demand
Production
2016 2015e 2014 2013
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Demand: Sluggish ‐ Growth in AP
68% O ti t
NBR ‐ Nitrile Butadiene Rubber HIGHLIGHTS
AMERICAS EMEA ASIA PACIFIC
NBR Globa l Es t imat ion
Supply & Demand
68% Operating rate
Supply
Demand
5% 32% 62%
17% 27% 56%
GLOBAL SUPPLY & DEMAND CHINA
Imp
Exp
25 ConfidentialSource: IISRP ChinaSource: IISRP Model
2009 2010 2011 2012 2013 2014 2015 2016
Supply Demand Linear (Demand)
Demand
Production
2016 2015 2014 2013
Demand: Improving in all regions
83% O ti t
SBS ‐ Styrene Butadiene Block Copolymer HIGHLIGHTS
AMERICAS EMEA ASIA PACIFIC
SBS Globa l Es t imat ion
Supply & Demand
83% Operating rate
Supply
Demand
14% 15% 71%
20% 22% 58%
GLOBAL SUPPLY & DEMAND CHINA
Imp
Exp
26 ConfidentialSource: IISRP ChinaSource: IISRP Model
2011 2012 2013 2014 2015 2016
Supply Demand Linear (Demand)
Demand
Production
2016 2015 2014 2013
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Agenda
Topics
Global Capacity & Main Players
New Projects & Expansions
Supply & Demand
Challenges & Trends
27 Confidential
Challenges & Trends
Cha l lenges -Overcapac i ty
Challenges
Key points•SRI 2016 global
28 Confidential
operating rate 70%•Overinvestment in China
•Tire elastomers have been great contributors
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Challenges
Chal lenges -Overcapac i ty
29 ConfidentialSource: ICIS Magazine March 2016.
Challenges
Chal lenges -Overcapac i ty
10,000
15,000
20,000SR Global Capacity, Supply & Demand
2016 (kton)
30 Confidential
-
5,000
ESBR BR SSBR EPDM NBR SBC's CR IR IIR Global
Capacity Supply Demand
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Challenges
Chal lenges -Volat i l i ty
Key pointsOil i t
Key points•SRI 2016 global
31 Confidential
•Oil prices - extreme volatility
•BD tight supply (outages)
•SR producers increasing prices
operating rate 70%•Overinvestment in China
•Tire elastomers have been great contributors
Challenges
Chal lenges -Volat i l i ty
32 Confidential
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Challenges
Chal lenges –NR Market Dynamics
Key points•NR overcapacity
Key points•Oil prices - extreme volatility
Key points•SRI 2016 global
33 Confidential
•Majority of demand is driven by Tire Industry
•Enough substitution to be close price with SR
volatility•BD tight supply (outages)
•SR producers increasing prices
operating rate 70%•Overinvestment in China
•Tire elastomers have been great contributors
Trends
Trends –T i re Sector
Key points•NA and WE expecting growth during 2017 l
34 Confidential
(replacement)•CE, EE & Russia with solid performance on PVTires
•PVTires solid growth in ME
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Trends
Trends –T i re Sector
35 Confidential
Trends
Trends –Auto Indust r y
Key Points•SRI 2016 global
Key points• LV Assembly expecting CAGR 3%
36 Confidential
operating rate 70%•Overinvestment in China
•Tire elastomers have been great contributors
•Higher Capital spending of top 10 OEM’s on R&D and M&A.
• Forces transforming mobility
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Trends
Trends –Auto Indust r y
37 Confidential
Source: PwC Autofacts 1Q 2017
Trends
Trends –Auto Indust r y
38 Confidential
Source: Capital IQ
4/17/2017
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Trends
Trends –Auto Indust r y
39 Confidential
Source: Deloitte University Press
Trends
I ISRP- Webinars
IISRP Webinars: Recent Developments & Applications in Elastomers &
Synthetic Rubber
You are invited to register for IISRP's
"RECENT DEVELOPMENTS AND
APPLICATIONS IN ELASTOMERS AND
SYNTHETIC RUBBER" webinar
40 Confidential
Source: iisrp.com
Presented by: Dr. Walter Ramirez
Chief Innovation Officer, Founder of Innventik
Please join us on Wednesday May 10,2017 at
09:00 CST
In this Webinar, you will gain insight on:
Relevant technology activity, major drivers
and trends
Sustainability: Renewable monomers and
biobased solutions
Dr. Walter Ramirez
is Chief Innovation
Officer and Founder
of Innventik
4/17/2017
21
Closing
Conc lus ions
Global SR Consumption Forecast 2017-2021 (kt)
5 000
10,000
15,000
41 Confidential
0
5,000
2011
2012
2013
2014
2015
2016
2017f
2018f
2019f
2020f
2021f
Source: IISRP SR Consumption Forecast
*Includes BR, EPDM, ESBR, NBR, SBS & SSBR
Closing
Conc lus ions
• Challenging margins
• Fierce competition
42 Confidential
4/17/2017
22
Closing
Questionswww.iisrp.com
roxanna@iisrp .com
3535 Briarpark Suite250Houston, TX 77042
+1 713 783 1703
43 Confidential