With the plunge in crude and naphtha prices proving to be more prolonged than anticipated, fiercer competition for market share can be expected in the first half of 2016. In light of market volatility and the sense of uncertainty, Platts has produced a special report that looks at aromatics and blendstock markets. This reports will help you to understand the key issues that will shape Asia's petrochemical industry this year.

1. ASIA OUTLOOK 2016
AROMATICS AND
BLENDSTOCKS
PLATTS SPECIAL REPORT
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A lack of new PX capacity in Asia, combined with
the startup of downstream PTA plants in China, is
expected to result in tight PX supply
Toluene looks set to gain from a post-Lunar New
Year pickup anticipated in China’s construction
industry due to returning demand for solvents used
in paints
Benzene is set for oversupply due to poor
downstream derivative demand
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ASIA OUTLOOK 2016

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The reports contains insight into:
AROMATICS
• Asian PX demand, margins expected stable to firm in H1 2016
• Asian benzene struggles under supply pressure, unstable downstream demand
• Asian SM supply to tighten in 2016 but demand, US imports remain uncertain
• Asian isomer-MX supply/demand scene to change with capacity boost in H2 2016
• Caprolactam demand likely to remain weak in 2016 amid supply glut
• Phenol gains likely to be capped by bearish fundamentals in 2016
BLENDSTOCKS
• MTBE to stay bearish in 2016 as more China capacity comes online
• Asian toluene demand expected to be steady in 2016
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ASIA OUTLOOK 2016

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ASIA OUTLOOK 2016

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Foreword
Asia’s market participants are mostly optimistic about the outlook for the aromatics sector in the first half of 2016, with Platts finding that
most expect to see stability and improvement. A lack of new paraxylene production capacity in Asia, combined with the startup of
downstream purified terephthalic acid plants in China, is expected to result in tight PX supply. On top of that, several participants expect a
reverse arbitrage window for PX to again open from Asia to the US, a repeat of what occurred in August-September 2015. Toluene, which
finds its way into PX and benzene production, looks set to gain from a post-Lunar New Year pickup anticipated in China’s construction
industry due to returning demand for solvents used in paints. For styrene monomer, tight supply resulting from planned turnarounds over
February-May and additional demand from new acrylonitrile-butadiene-styrene plants are expected to provide support. However, some
market sources expect SM production margins to be squeezed by relatively high ethylene feedstock costs on the back of tight ethylene
supply. Benzene may not fare as well due to oversupply and poor downstream derivative demand, with the glut in Asia expected to worsen
due to additional capacity coming on stream in India, Saudi Arabia and South Korea. Nevertheless, benzene exports to the US are expected
to lend support by continuing to absorb some of Asia’s glut. On the other hand, one of benzene’s major derivatives, phenol, faces thin
production margins, which has led to plants either shutting down or cutting operating rates. Another derivative, caprolactam, will face
oversupply as new plants come online in China, putting pressure on existing producers. Adding uncertainty to the direction of the
aromatics markets in H1 2016 will be global economic trends, with many market sources cautiously watching both China and whether
crude prices rebound or sink further. That, and more, can be found in this first-half outlook for 2016 from Platts.
ASIA OUTLOOK 2016

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ASIA OUTLOOK 2016
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Report for free now