European propylene and polypropylene (EPCA 2012 presentation)

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Read the European propylene and polypropylene presentation given at EPCA 2012. This presentation talks about a rollercoaster ride for the industry; the issues and challenges ; opportunities and what shale gas means to the European propylene industry.

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European propylene and polypropylene (EPCA 2012 presentation)

  1. 1. European Propylene and PolypropyleneMonicca EgoyEditor, Europe Propylene & Polypropylene
  2. 2. Agenda • 2012 price trends: A rollercoaster ride for the industry • Issues and challenges • Opportunities • What shale gas means to the European propylene industry? 2
  3. 3. NWE propylene and naphtha prices Source: Platts On The Net
  4. 4. European propylene and polypropylene prices Source: Platts On The Net
  5. 5. European propylene production 2005-2011 Source : APPE
  6. 6. NWE propylene quarterly production 2007-2012 Source: APPE
  7. 7. European polypropylene contract, spot prices Source: Platts On The Net
  8. 8. Inherent features of European propylene market:The incredible balancing act• Credible revival of downstream demand yet to materialize• Tight control of working capital• Cautious inventory management• Utilization rates adjusted based on downstream demand• Self-sufficiency, self-preservation mode at all times• Industry remains vigilant
  9. 9. Global propylene demand 2010-2016 2016 2015 2014 2013 2012 2011 2010 0 20,000 40,000 60,000 80,000 100,000 120,000 US Western Europe, includng Turkey Total Asia TOTAL DEMAND Source: Japan METI
  10. 10. Global polypropylene demand 2010-20162016201520142013201220112010 0 10000 20000 30000 40000 50000 60000 70000 US Western Europe, includng Turkey Total Asia TOTAL PP Demand Source: Japan METI
  11. 11. Global propylene production 2010-20162016201520142013201220112010 0 20,000 40,000 60,000 80,000 100,000 120,000 US Western Europe, includng Turkey Total Asia TOTAL PRODUCTION Source: Japan METI
  12. 12. European polypropylene production/demand2010-2016 10,500 10,000 9,500 9,000 8,500 8,000 7,500 2010 2011 2012 2013 2014 2015 2016 production Demand Source: Japan METI
  13. 13. Opportunities: What Europe will capitalize on • Europe’s diversified cracker portfolio to benefit in times of global C3 shortages, as new US investments favour C2 production • Europe to capitalize on robustness in C3 production chains • Nimble infrastructure in Europe to aid arbitrage opportunities • Strength of feedstock/downstream integration to aid efficiency • Close proximity to customers to continue strengthening integration on a larger scale
  14. 14. Summary •Volatile feedstock to remain a key feature, margins weak •End-user markets fragile •Production rates adjusted based on demand •Long term outlook positive •Shale gas brings opportunities for European propylene industry 14

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