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Engineering Thermoplastics & Intermediates

Keiji Wakatsuki

Chemicals Committee Meeting at APIC 2014

Pattaya, 16 May 2014

APIC 2014ENGINEERING THERMOPLASTIC MARKETS & END-USES

Source: Tecnon OrbiChem

PA 6, PA 66

Polyacetal

ABS/SAN

PBT

Polycarbonate Automotive, optical media, consumer goods

Automotive, consumer goods, electrical

Automotive, electronics, consumer goods

Automotive, electronics, fibre-optic cable

Computers, electronics, home appliances

0

500

1,000

1,500

2,000

2,500

3,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

1,000 Metric Tons


APIC 2014

WORLD POLYAMIDE 6 & 66 ENGINEERING RESIN CAPACITY & DEMAND

PA6Capacity

PA66Capacity

PA6Demand

PA66 Demand

1,500

2,000

2,500

3,000

3,500

4,000

4,500Ja

n-09

Apr

-09

Jul-0

9O

ct-0

9Ja

n-10

Apr

-10

Jul-1

0O

ct-1

0Ja

n-11

Apr

-11

Jul-1

1O

ct-1

1Ja

n-12

Apr

-12

Jul-1

2O

ct-1

2Ja

n-13

Apr

-13

Jul-1

3O

ct-1

3Ja

n-14

Dollars per Ton

US DomesticContract

EU DomesticContract

ChinaImport (cfr)


APIC 2014

POLYAMIDE 6 ENGINEERING RESIN PRICES

-100

0

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Dollars per Ton

West EuropeDDP

AsiaCFR


APIC 2014

PA 6 RESIN MARGINS over 1.02 x CAPROLACTAM

0

2,000

4,000

6,000

8,000

2010 2011 2012 2013 2014 2017 2020

Market Over-Supply

1,000 Metric Tons

N America

S America

W Europe

E Europe

S&SE Asia

NE Asia

China


APIC 2014

CAPROLACTAM CAPACITY GROWTH


APIC 2014

WORLD POLYCARBONATE RESINCAPACITY & DEMAND1,000 Metric Tons

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

ROWCapacity

ChinaCapacity

Demand

2,000

2,500

3,000

3,500

4,000

4,500Ja

n-09

Apr

-09

Jul-0

9O

ct-0

9Ja

n-10

Apr

-10

Jul-1

0O

ct-1

0Ja

n-11

Apr

-11

Jul-1

1O

ct-1

1Ja

n-12

Apr

-12

Jul-1

2O

ct-1

2Ja

n-13

Apr

-13

Jul-1

3O

ct-1

3Ja

n-14

Dollars per Ton

US DomesticContract

EU DomesticContract

China Domestic


APIC 2014

POLYCARBONATE RESIN PRICES

APIC 2014

POLYCARBONATE RAW MATERIAL DEVELOPMENTS

• US Gulf Coast

� Benzene – Record high spot prices; contract above $5/gal

� Propylene – Tighter market supplies keeping prices elevated

• Northwest Europe

� Benzene – Average Q1 2014 contract more than €1000/ton

� Propylene – Contract prices hold firm at €1100/ton in Q1

• China/Asia

� Benzene – Spot, contract prices in $1200-1300/ton range

� Propylene – Prices close to $1300-1400/ton in Q1 2014


-300

-200

-100

0

100

200

300

400

500

600

700

800

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Margin = [Bisphenol A - (0.88 x Phenol + 0.29 x Acetone)]

Dollars per Ton

United States

West Europe


APIC 2014

BISPHENOL A MARGINS over PRECURSORS


APIC 2014

WORLD POLYACETAL PRODUCTION CAPACITY

15%

16%

9%

1%

16%7%

9%

5%

19%

3%

0%

Total = 1.08 Million Metric Tons

2010

9%

11%

5%

1%

10%

4%

11%

6%

33%

7%

3%


2015United States

Germany

Netherlands

Poland

Japan

Taiwan

South Korea

Thailand

China

Malaysia

Saudi Arabia

1,000

1,500

2,000

2,500

3,000

3,500

4,000Ja

n-09

Apr

-09

Jul-0

9O

ct-0

9Ja

n-10

Apr

-10

Jul-1

0O

ct-1

0Ja

n-11

Apr

-11

Jul-1

1O

ct-1

1Ja

n-12

Apr

-12

Jul-1

2O

ct-1

2Ja

n-13

Apr

-13

Jul-1

3O

ct-1

3Ja

n-14

Dollars per Ton

US DomesticContract

EU DomesticContract

China Domestic


APIC 2014

POLYACETAL COPOLYMER RESIN PRICES

0

100

200

300

400

500

600

700

800

900

1,000

Jan-

09A

pr-0

9Ju

l-09

Oct

-09

Jan-

10A

pr-1

0Ju

l-10

Oct

-10

Jan-

11A

pr-1

1Ju

l-11

Oct

-11

Jan-

12A

pr-1

2Ju

l-12

Oct

-12

Jan-

13A

pr-1

3Ju

l-13

Oct

-13

Jan-

14A

pr-1

4

Dollars per Ton


APIC 2014

METHANOL CONTRACT PRICESvs BRENT and HENRY HUB

Asia

N. America

W. Europe

Brent

Henry Hub

2010 2011 2012 2013 2014 2017 20200

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

1,000 Metric Tons

W&E Europe

N America

ME/Africa

S&SE Asia

NE Asia

China


APIC 2014

WORLD PBT RESIN CAPACITY GROWTH

2014 Capacity: 1.8 Million Tons

APIC 2014

POLYBUTYLENE TEREPHTHALATE

• Global PBT market ‘regionalised’ in terms of virgin resin as compounded material makes up large percentage of import/export volumes.

• PBT resin in US market mostly sold as compounded material. Monthly pricing prevalent for compounded volumes.

• European market contract prices relatively flat in 2013-2014. Spot material from Asia makes little impact.

• China domestic and import business typically concluded on spot volumes due to over-supply.

• China import prices trended lower during 2013


Electrical33%

IT12%

Other16%

Automotive39%

2013 960,000 Metric Tons

APIC 2014

WORLD PBT DEMAND BY END-USE


22%

19%

3%

1%24%

31%

<1%


SAN 2014

1%

1%

35%

36%

9%

9%8% 1%


ABS 2014N America

S America

W Europe

E Europe

ME & A

S & SE Asia

NE Asia

China


APIC 2014

WORLD ABS/SAN PRODUCTION CAPACITY

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Jan-0

9Apr

-09

Jul-0

9O

ct-09

Jan-1

0Apr

-10

Jul-1

0O

ct-10

Jan-1

1Apr

-11

Jul-1

1O

ct-11

Jan-1

2Apr

-12

Jul-1

2O

ct-12

Jan-1

3Apr

-13

Jul-1

3O

ct-13

Jan-1

4

Dollars per Ton

Acrylonitrile

Butadiene

Styrene


APIC 2014

ASIAN ABS RAW MATERIAL PRICES

APIC 2014

‘GREEN’ ENGINEERING THERMOPLASTICS

Slowly But Surely

• Polyamide 11 – Produced from castor oil by Arkema.

• Polyamide 12 – Evonik operating pilot plant producing bio-lauric acid from palm kernel oil.

• Bio-PBT – Lanxess, Toray using Genomatica's bio-based 1,4 butanediol as feedstock.

• ‘DURABIO’ – Isosorbide-based plastic manufactured by Mitsubishi Chemical Corp. Touted as alternative to polycarbonate.

• Widespread use in Engineering Thermoplastics still some years away.


APIC 2014

SUMMARY/CONCLUSIONS

• Engineering Thermoplastic polymer growth outlook positive as substitution for metal in automobiles, for example, needed to meet fuel efficiency targets.

• Costs for hydrocarbon based raw materials still sensitive to energy market volatility.

• Over-capacity in some key raw material markets limiting margin growth for the short-term in ETP markets.

• Concerns about growth rates in China weighing down market sentiment.

• Development of ‘green’ ETP products continuing.


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