US Olefins, Polyethylene (PE) & Polypropylene (PP) at a glance 2013

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Getting ready for APLA - see whats affecting US Ethylene and how this might affect the gobal commodity markets.

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US Olefins, Polyethylene (PE) & Polypropylene (PP) at a glance 2013

  1. 1. US olefins, PE & PP at a glance Bernardo E. Fallas, Editor – Americas Petrochemicals 2013 © 2013 Platts, McGraw Hill Financial. All rights reserved.
  2. 2. US Ethylene: Stable in July, up in Aug. Source: Platts 2
  3. 3. What is all means. Click here to watch. 3
  4. 4. US Propylene: Aug. CPs rise $110/mt Source: Platts 4
  5. 5. LDPE: Tight globally, up in Asia, US Source: Platts 5
  6. 6. Polypropylene: Stronger on feedstock Source: Platts 6
  7. 7. Propane Lt Naphtha Butane Ethane May-13 Apr-13 Feb-13 Mar-13 Jan-13 Dec-12 Nov-12 Oct-12 Sep-12 Aug-12 Jul-12 Jun-12 May-12 Apr-12 Mar-12 Feb-12 Jan-12 Dec-11 Nov-11 Oct-11 Sep-11 Aug-11 Jul-11 Jun-11 May-11 Apr-11 Feb-11 Mar-11 Jan-11 Cents/lb US ethylene margins 60.00 50.00 40.00 30.00 20.00 10.00 0.00 -10.00 -20.00 -30.00 7
  8. 8. Platts New Report & Analysis 8
  9. 9. US cracker margins 2013 Source: Platts 9
  10. 10. Ethylene: Producers still “all-in” IF built, proposed greenfield projects in the US could add as much as 8.55-9.15 million mt/yr of ethylene capacity by 2017 Company Location ,000 mt/yr ETA ExxonMobil Chemical Texas 1,500 2016 Formosa Plastics CUSA Texas 800 2016 Chevron Phillips Chemical Texas 1,500 2017 Dow Chemical Texas 1,500 2017 Sasol Louisiana 1,500 2017 Occidental/Mexichem Texas 550 2017 Shell Chemical Pennsylvania Aither Chemical/RMG Appalachian Resins 1,000-1,500 2017 W. Virginia 200-300 2017 W. Virginia 250 2017 Source: Company announcements, Platts 10
  11. 11. Brownfield projects: The Ones to Watch Company Location +,000 mt/yr ETA BASF-Total Texas 60 2012 Dow Chemical (restart) Louisiana 400 2012 Westlake Chemical Louisiana 110 2013 Williams Louisiana 230 2013 Ineos Texas 120 2013 Westlake Chemical Kentucky 80 2014 BASF-Total Texas 100 2014 Westlake Chemical Louisiana 110 2015 LyondellBasell Texas (3) 830 2014-16 Dow Chemical TX/LA (2) 400 2014-16 Source: Company announcements, Platts 11
  12. 12. Ethylene Boom: USGC is the focus 1 2 3 4 5 6 7 8 9 10 11 Production capacity (mm Mt/Yr) BASF-Total Port Arthur, TX 0.06 Dow Chemical Hahnville, LA 0.4 Westlake Chemical Lake Charles, LA 0.11 Williams Geismar, LA 0.23 Ineos Alvin, TX 0.12 Westlake Chemical Calvert City, KY 0.08 BASF-Total Port Arthur, TX 0.1 Dow Chemical Plaquemine, LA 0.2 Dow Chemical Freeport, TX 0.2 LyondellBasell Channelview, TX 0.11 LyondellBasell La Porte, TX 0.36 12 LyondellBasell CorpusChristi, TX 0.36 2015 13 Westlake Chemical Lake Charles, LA 0.11 2015 14 Aither Chemical Charlestn, W. VA. TBD 2016 15 Point Comfort, TX 0.8 2016 Baytown, TX 1.5 2016 17 18 Formosa Plastics ExxonMobil Chemical Chevron Phillips Dow Chemical Baytown, TX Freeport, TX 1.5 1.5 2017 2017 19 Oxy/Mexichem Ingleside, TX 0.55 2017 Reference Owner/Operator 16 20 21 Total Shell Chemical Sasol Location Monaca, PA Lake Charles, LA 1 1 10.29 Majority of world-scale projects are at least 3-5 years away In-service 2012 2012 2013 2013 2013 2014 2014 2014-16 2014-16 2014-15 2014-15 2017 2017 20 14 6 1/7 16 4 8 21 3 2 17 15 18 910 13 Greenfield Brownfield 12 11 5 19 Source: ProPublica 12
  13. 13. Propane: Lifeline for US Propylene Tightening supplies breed volatility. Relief could be on the way, but next 3-4 years are likely to test downstream markets Company Location ,000 mt/yr ETA Freeport, TX 750 2015 Enterprise Products (PDH) Mt. Belvieu, TX 750 2015 C3 Petrochemicals (PDH) Alvin, TX 1,200 2015 Point Comfort, TX 600 2016 Alberta, Canada 500 2016 Dow Chemical (PDH) * TBD/USG TBD 2018 Enterprise Products (PDH) * TBD/USG TBD TBD Houston, TX Expansion --- Texas Expansion --- Dow Chemical (PDH) Formosa Plastics CUSA (PDH) Williams (PDH) PetroLogistics (PDH) LyondellBasell (metathesis) Source: Company announcements, Platts 13
  14. 14. Data: Platts LPGaswire CFR Japan 45-60 days FOB NWE Seagoing Saudi CP Mar-13 Jan-13 Nov-12 Sep-12 Jul-12 May-12 Mar-12 Jan-12 Nov-11 Sep-11 Jul-11 May-11 Mar-11 Jan-11 Nov-10 Sep-10 Jul-10 May-10 Mar-10 Jan-10 Nov-09 Sep-09 Jul-09 $/MT US Propane: Values Diverge $1,400 $1,200 $1,000 $800 $600 $400 $200 Gulf Coast 14
  15. 15. What About Polypropylene? Company Location ,000 mt/yr ETA N/A N/A N/A N/A • Zero projects announced • At least for the short-term, the business appears unattractive, and companies including Dow Chemical and Sunoco have exited it all together • Last year, Chevron Phillips and Sumika ended a JV in Pasadena,TX, taking 320,000 mt/year out of the market • “Polypropylene is going the way of polystyrene” – PP seller 15
  16. 16. Butane: On-Purpose Butadiene Company Location ,000 mt/yr ETA TPC Group (BDH) Houston, TX 295 (isobutylene) 2014 TPC Group (OXO-D) Houston, TX 272 (butadiene) 2016 • Restart of dehydrogenation assets to provide isobutylene feedstock for MTBE, PIB, HP isobutylene and diisobutylene • Engineering design optimization for TPC OXO-D unit due Q3 2013 • Engineering also underway for PIB expansion 16
  17. 17. Natural Gas: The Methanol Comeback Cheap natural gas brings production back to US Gulf Coast Company Location ,000 mt/yr ETA OCI Beaumont, TX 750 2012 Methanex (debottleneck) Alberta, Canada 90 Q3 2013 LyondellBasell Channelview, TX 780 Q4 2013 Methanex I (relocation) Geismar, LA 1,000 2014 G2X Energy Pampa, TX 65 2014 OCI (debottleneck) Beaumont, TX 125 Q4 2014 Celanese Clear Lake, TX 1,300 Q2 2015 Methanex II (relocation) Geismar, LA 1,000 2016 South Louisiana Methanol St. James, LA 1,800 Q1 2016 Lake Charles CE/BP Lake Charles, LA 1,000 H2 2016 Source: Company announcements, Platts 17
  18. 18. U.S. Ethane Balance Including Williston Basin Ethane Production 2,000 Mb/d 1,500 1,000 500 0 Gas Plant Supply Refinery Supply Exports to Canada Rejected Volumes Petchem Demand 18
  19. 19. Ethylene: Major Expansions Globally 70,000 2017 - Ethylene Balances 60,000 50,000 40,000 Demand 30,000 Supply 20,000 10,000 0 Asia Europe Middle East North AmericaSouth America Africa
  20. 20. Thank you Please stay in touch in the markets: bernardo.fallas@platts.com (713) 655-2214

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