Mideast Asia Polyethylene Polypropylene Outlook (Oct '09)
1. A roller-coaster ride Middle East, Asia polymer markets Prema Viswanathan Deputy Managing Editor-Asia ICIS pricing October 2009
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3. PE 3.65m PE 1.55m PE 1.27m PE 750kt PE 1.035 PE 7.16m PE 1.91m PE 2.13m Global PE capacity - 73m tonnes Note: Japan’s, Taiwan’s & Singapore’s PE data includes EVA. PE 10.8m PE 3.9m
4. PE 1.95m PE 0.68m PE 0.5m PE 0.7m PE 11.59m Global PE demand – 67m tonnes (2008) PE 2.39m PE 1.08m PE 0.8m PE 1.3m PE 3.1m Note: Japan’s, Taiwan’s & Singapore’s PE data includes EVA. PE 3.4m
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6. PP 3.7m PP 2.11m PP 0.37m PP 0.65m PP 0.49kt PP 7.54m PP 1.26m PP 2.03m Global PP capacity 48m t/y (2008) Note: Thailand’s and Singapore PE data includes EVA. PP 5.3m PP 3.1m Sources: Industry, ICIS pricing
7. PP 1.35m PP 0.51m PP 0.2m PP 0.8m PP 10.29m Global PP demand 45m t/y (2008) PP 1.8m PP 0.94m Note: Thailand’s and Singapore PE data includes EVA. *Industry estimated. PP 0.5m PP 1.8m PP 2.8m Sources: Industry, ICIS pricing
11. Mid-East start-ups in 2008-09 - PP PP capacity increase by 3.45m tonnes in 2008-09 Source: ICIS pricing *addition Q4 2008 400 Natpet, Yanbu Q1 2009 500* Saudi European Petrochemical (Ibn Zahr) End-Aug 2009 400 Yansab, Yanbu Q1 2009 250* Saudi Polyolefins, Al Jubail Q2 2008 450 Advanced Polypropylene, Al Jubail Q2 2008 300 Jam Petrochemical, Assaluyeh Q1 2009 700 Petro Rabigh, Rabigh Expected start-up PP plant capacity (‘000 tonnes) Company H2 2009 450 Al Waha Petrochemical, Al Jubail
12. Mid-East start-ups in 2008-09 - PE 6.25m tonnes of additional PE capacity in 2008-09 *addition Source: ICIS pricing End-Sept 2009 (LLDPE) 450 Qatofin, Messaieed, Qatar End-Sept 2009 (HDPE) 350 Q-Chem, Messaieed, Qatar June 2009 (HDPE/LLDPE) +250* Equate, Shuaiba, Kuwait July 2009 (HDPE) 300 Mehr, Assaluyeh, Iran Q1 2009 (LDPE) 300 Laleh, Bandar Imam Q1 2009 (HDPE, LLDPE) 900 Petro Rabigh, Rabigh Q4 2008 (HDPE, LDPE)800 Saudi Ethylene & Polyethylene Co, Al Jubail Q4 2008 (LDPE, MDPE/HDPE) 600 Arya Sasol, Assalueyh Q2 2008 (HDPE, HDPE//LLDPE) 600 Jam Petrochemical, Assaluyeh Q4 2009 (LLDPE, HDPE) 800 Sharq, Al Jubail Sept 2009 (LLDPE, HDPE) 900 Yansab, Yanbu Expected start-up PE plant capacity (‘000 tonnes) Company
13. Mid-East PE, PP exports up 54% in H1 ‘09 Source: International Trader Publications PP exports up 82%, imports down 42% due to new start-ups
14. PP copolymer imports into Mid-East up 5% Source: International Trader Publications Mid-East PP exports to Asia up almost 150%
15. Mid-East HDPE exports up 68% in H1 ‘09 Source: International Trader Publications HDPE exports to Asia up 87%, to W Europe 56%, L America 156%
16. Mid-East LLDPE exports up 7% in H1 ‘09 Source: International Trader Publications LLDPE exports to Asia up 63%, to W Europe down 34%
17. Mid-East LDPE exports up 60% in H1 ‘09 Source: International Trader Publications LDPE exports to W Europe up 252%, to Asia up 52%, imports down 12%
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21. Unit: Kt/y Impact of new Asia capacity Source: ICIS pricing Japan Started up Sep 2009 300 - Japan PP Map Ta Phut, Thailand Early 2010 - LLDPE 350 Siam PE Map Ta Phut, Thailand 2010 400 HDPE 300 Siam Cement Map Ta Phut, Thailand Mid Nov 2009 (Early 2010) - HDPE 250 BPE Map Ta Phut, Thailand Nov 2009(2010) Feb-Mar 2010 Oct 2009 (2010) - HDPE up by 50 to 300 LDPE 300 LLDPE 400 PTT Chemical Map Ta Phut, Thailand Sep 2009 300 - HMC Jurong Island, Singapore Early 2011 450 650 x 2 ExxonMobil Location Start-up PP PE Company
22. Source: ICIS Impact of new capacity Oct 2009 230-250 HDPE 300 Liaoning, China Liaoning Huajin Chemical Expected start-up PP kt/yr PE (Kt/y) Location Company Q4 2009/early 2010 450 HDPE 300 LLDPE 300 Tianjin, China Tianjin Petchem Sep 2009 400 HDPE 400 LLDPE 400 Fujian, China FREP Sep 2009 550 HDPE/LLDPE 900 Xinjiang, China Dushanzi Petrochemical
26. China’s changing import demand 67,252 76,232 67,274 Singapore China’s top 10 HDPE import origins (Jan-July 2009) Source: China customs 42,491 43,648 70,898 UAE 38,235 60,243 74,344 Malaysia 58,146 51,770 120,683 Japan 84,013 132,779 154,259 Thailand 94,004 112,476 182,325 Taiwan 9,481 11,863 199,598 Iran 128,142 178,519 219,176 US 117,383 138,185 239,107 Saudi Arabia 344,359 388,469 554,339 South Korea 2007 2008 2009 Origin HDPE imports more than doubled in Jan-July 2009 to 2.3m tonnes. 70% domestic 23% re-export Jan-July 2008 45% domestic 37% re-export
27. China’s changing import demand Source: China customs China’s top 10 LLDPE import origins (Jan-July) 1,572 7,266 28,582 31,123 4,243 36,115 2,341 47,991 37,216 110,330 122,680 166,993 106,282 158,214 2008 2,317 21,666 UK 23 11,177 Indonesia 24,365 27,620 UAE 32,998 33,243 Thailand 5,539 38,924 Iran 44,705 42,487 Kuwait 48,238 49,991 Brazil 43,895 60,556 Taiwan 46,277 90,067 Japan 94,098 118,093 Canada 129,182 137,144 US 164,522 156,717 Singapore 123,550 189,883 South Korea 255,238 243,577 Saudi Arabia 2007 2009 Origin LLDPE imports rose 43% in Jan-July 2009 to 1.29m tonnes. 66% domestic 26% re-export Jan-July 2008 40% domestic 40% re-export
28. China’s changing import demand 1,831 3,542 11,075 Belgium China’s top 10 LDPE import origins (Jan-July) 228 7,631 16,975 17,410 29,051 35,067 0 43,611 35,591 50,305 53,422 85,667 37,713 2008 396 12,727 Brazil Source: China customs 5,510 12,834 Holland 22,012 16,943 Taiwan 28,847 28,553 Saudi Arabia 18,559 33,222 Germany 42,103 34,023 Singapore 16 55,581 Iran 66,899 56,234 US 51,426 74,339 Japan 43,430 87,414 Qatar 61,794 98,862 South Korea 98,205 107,614 Malaysia 11,154 127,189 Russia 2007 2009 Origin LDPE imports rose 87% in Jan-July 2009 to 818,930 tonnes. 65% domestic 23% re-export Jan-July 2008 34% domestic 48% re-export
29. China’s changing import demand 43,607 38,813 35,493 Malaysia China’s top 10 PP homopolymer import origins (Jan-July 2009) Source: China customs 16,601 25,649 39,598 South Africa 99,805 92,183 72,454 Thailand 25,314 3,120 91,922 Brazil 171,904 177,900 112,299 Singapore 153,075 118,004 160,866 Japan 85,988 89,099 250,733 Saudi Arabia 208,871 54,216 280,676 US 360,630 320,343 348,327 Taiwan 475,178 556,323 677,676 South Korea 2007 2008 2009 Origin PP imports rose 50% in Jan-July 2009 to 2.4m tonnes. 50% domestic 42% re-export Jan-July 2008 19% domestic 68% re-export
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32. India start-ups in 2008-10 – PE, PP PP capacity to go up by 1.6m t/y, PE by 615kt/y in 2008-10 Source: ICIS pricing *addition Jan 2008 (HDPE) 100 Gail India, Pata, UP, India Q1 2010 (PP)650 (PE)350 Indian Oil Corp, Panipat, India Q4 2009 (PP)+160* (PE) +150* Haldia Petrochemicals, Haldia, West Bengal, India Early May 2009 End-June 2009 (PP)450 (PP)450 Reliance, Jamnagar, Gujarat, India Expected start-up Plant capacity (‘000 tonnes) Company
36. Pakistan demand to rise by 8-9% Sources: Industry, ICIS pricing But high energy costs, power shortage, inflation, liquidity curbs subdue growth
37. South Asia’s potential growth markets Sources: Industry, ICIS pricing Markets with low per capita consumption, strong export sector
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39. Turkey PE, PP imports slide in ‘09 PE imports fall by 11%, PP by 7% in Jan-July, only LLDPE up by 8.5%
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41. PE rises after fall in end-’08, Sep ‘09 Source: ICIS pricing Prices rise on tight supply, strong demand, rising crude, high freight High prices, allocation cuts drive buyers to maintain low stocks
42. PP up after plunge, but for how long? Source: ICIS pricing Economic crisis, credit woes, volatile crude, prices intensify buyer anxiety, but rising crude, naphtha, propylene could keep prices stable
43. Asia’s pricing dynamics post- Middle East expansion - polyolefins PP and PE hit 10-year peaks of $1,995/tonne and $1,825/tonne in the 4 July week of 2008. PE hits a 10-year bottom at $440/tonne in 14 August week of 1998, and PP at $395/tonne in 15 January week of 1999.
44. Asia/Mid-East cracker shutdowns in 2009 Source: ICIS pricing 1Sep-15 Oct 700 Formosa, Taiwan 14 Nov-15 Dec 230 CPC, Taiwan 15 Oct-30 Dec 520 Haldia Petchem, India 25 June-5 Aug 617 Mitsubishi Chem, Ishihara 25 Jul-14 Aug 1,000 Arya Sasol, Iran 8 Jul-20 Aug 453 Mitsubishi Chem, Kashima No2 unit down 1-30 May 700 Petrokemya, Al Jubail, S Arabia 2 Feb-23 Mar 600 Chandra Asri, Indonesia 1-20 June 900 Shanghai Secco, China 3 May-17 June 900 ExxonMobil, Singapore 13 May-6 Jul 450 Mitsubishi Chem, Mizushima 7 May-3 Jul 375 Mitsub Chem, Kashima, Japan Schedule Capacity (‘000 tonnes) Company
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46. Thank you PE, PP markets in 2009-10 Rocky ride ahead [email_address] +65 67804346
Editor's Notes
World HDPE demand 2009 – 32m t/y, 2010 – 35m t/y Growth 4.5%/y Capacity 38m t/y Demand for HDPE in India is relatively small at 1.1 million tonnes. HDPE demand in India is forecast to grow at 6.7% per year to 2030 on the back of strong demand growth into film & sheet and pipe & extrusion applications.
2010 Borouge – 540PE, 800kt PP Egypt-400kt PP Iran-300kt PE
PP exports from US in Jan-july only 2% down from 2008 PP global demand estimated to grow at 1% in 09, after 3-4% shrinkage in 08
Packaging, F&B, irrigation, synthetic carpets, automotive parts to drive demand growth in ’08, up from 6-7% in ‘07 Saudi Arabia, UAE to show maximum growth due to large no of converters (650, 300). Strong govt support for downstream Iran demand good, but economic sanctions could impede growth B Last year was a difficult one for the processing community because of the threat of UN sanctions and restrictions imposed by international banks on opening LCs with Iranian customers. Inventories ran low and operating rates were cut. Prices also increased squeezing margins. The Central Bank of Iran issued a directive that all imports should be transacted in euros and not in US dollars and this restricted buying options. Eventually the government came to their rescue and stipulated that NPC should first cater to domestic customers before exports. Despite this directive, NPC and its counterparts managed to export significant volumes to China. They also made forays into Turkey and Pakistan – new markets for Iranian suppliers. Despite the shortages, demand for polymers is expected to be robust in 2007. With a population of 70m, more than 60% of it under the age of 30, Iran’s consumer base is set to expand exponentially in the coming years. The total production of polymers in 2006 was 2.5m tonnes while consumption was 2m tonnes. In the case of PP, fibre grade accounts for 31% of consumption as the country has a booming synthetic fibre industry. PP demand is projected to grow by 4-5% this year, the same rate as last year. PVC demand is projected to grow faster at 10%. Production disruptions, diversion to lucrative markets to keep supply tight in Mid-East in Q1 ‘08 Delay in start-up of new projects in Saudi Arabia, Iran Q2 ’08 should see supply ease and sentiment soften with new capacities up – NatPet, APPC, SEPC, SPC (+250k), Sharq Yansab, Jam, Arya Sasol
Consumption of polyethylene (PE) in the Middle East is 3 M tonnes and should grow to 6.3 M tonnes by 2015. Production capacity should exceed 10 M tonnes by 2010. As regards polypropylene (PP), production capacity in the Gulf states should reach 5.34 M tonnes compared to 1 M tonnes in 2000. In the Emirates there are 500 plastics processing firms with 16,000 employees
Iran capacity: PE-Marun: 300 Arya Sasol: 600 Arak:160# Jam 600 Amir Kabir 300 Mehr: 300 Laleh: 300 BIPC:160 Tabriz: 100 ----------------------- PP: Amir Kabir: 160 Jam 300 Arak 75 Marun: 300 Navid Zar Chimi: 160
India’s demand for PE grew by only 7% in and PP 3-4% in 2008-09, down from 13-14% in 2007-08 - Finished goods exports sector downbeat in ‘08 Local demand very sluggish New PP supply boosting exports. PE, PP exports down sharply in 07-08 PE imports up 50% and PP up 23% in 2007-08 on strong demand But sentiment bearish in H2 2008, Reliance cuts PP production
India April-August PP exports, imports surge 06 October 2009 06:54 [Source: ICIS news] By Prema Viswanathan SINGAPORE (ICIS news)--India’s shipments of polypropylene (PP) surged 50% year on year to 210,000 tonnes in the April-to-August period this year, due mainly to the start-up of Reliance Industries ' new export-oriented plant, industry sources said on Tuesday. The country's imports of the material also tripled to 215,000 tonnes over the same period because of strong domestic demand, they added. “ PP consumption shot up 30% year on year in April-August 2009 to 925,000 tonnes, but this was offset somewhat by additional supply from Reliance’s 900,000 tonne/year PP plant,” said a trader. Strong PP volumes were imported in April and May before the new Reliance plant achieved stable production, said one source. Supply disruptions due to outages also spurred imports, he said. The two 450,000 tonne/year lines at Reliance’s new PP plant at Jamnagar in the Gujarat state came on stream in May and June this year . The new plant is located in an special economic zone (SEZ), which offers tax incentives for exports. Reliance’s older 1m tonne/year plant in Jamnagar caters to the domestic market, after shedding its export-oriented unit (EOU) status earlier this year. Exports of high density polyethylene ( HDPE ) and linear low density PE ( LLDPE ), however, fell 75% in April-August to a mere 13,000 tonnes due to strong domestic demand, a source close to a producer said. India’s HDPE consumption also increased 15% to 540,000 tonnes in the five months ending August 2009, while LLDPE consumption surged 21% to 400,000 tonnes, he added. “ Demand for HDPE and LLDPE from the packaging sector has been very robust in the past few months, while domestic supply has been snug, causing exports to reduce sharply,” said a second trader. Strong domestic demand caused HDPE imports to surge by around 70% to 460,000 tonnes over the same five-month period, he said. For more on PP and PE visit ICIS chemical intelligence Please visit the complete ICIS plants and projects database To discuss issues facing the chemical industry go to ICIS connect By: Prema Viswanathan +65 6780 4359
Africa- PP supply – 780kt, demand 1.5 m t PE supply – 910kt, demand 1.8m t Capacity short of demand by 1.6m t/yr Percapita consumption of PP only 2kg compared with 6kg in ME and 24 kg in WE Eleme – 300 PE, 100PP Sasol-320pe, 680 PP Rasco, Libya-160PE Polimed, Algeria-130 PE Uganda, Tanzania, Kenya – 30micron bag in 2007 South Africa – ban on thin bags in 2003
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