The current supply and demand of Chlor-Alkali industry in Korea

Transcription

1 The 13 th East Asia Chlor-Alkali Meeting The current supply and demand of Chlor-Alkali industry in Korea November 10 th 2016 LG Chemical

2 Table of Contents I. Overview of Chlor-Alkali Industry in Korea II. Caustic Soda in Korea III. Chlorine & Chlorine Derivatives in Korea IV. Outlook of Korean CA Industry

3 Overview of Chlor-Alkali Industry in Korea. Ⅰ Caustic Soda Capacity(2011~2017) Remark [Unit: K DMT/Year] Increase Schedule HCC Ulsan Plant 200 close down 2 Yeosu 130 Expansion 1 End of April LG Expansion 2017 June LFC SFC to LFC since Feb PKI OCI KOC Total 1,551 1,901 2,051 2,051 2,051 2,051 2,041 - (Source: Korea Chlor-Alkali Industry Association/ As of 2016) HCC announced to sell their C/A plant in Ulsan to Unid(KOH producer) on 26 th Feb HCC s Ulsan C/A plant will be transformed it into a KOH production line at a time when Unid needs factory relocation Thus, the total capacity of HCC s C/A plant will be 830k DMT/year in 2017

4 Overview of Chlor-Alkali Industry in Korea. Ⅰ Chlorine Capacity(2011~2017) Increase Schedule HCC End of April LG expansion 2017 June LFC PKI OCI KOC Unid Ulsan 181 close down 2 Yeosu 118 expansion Remark [Unit: K Tone/Year] Total 1,505 1,823 1,960 1,960 1,960 1,960 1,950 - (Source: Korea Chlor-Alkali Industry Association/ As of 2016)

5 Caustic Soda Balance in Korea. Ⅱ 1. Caustic Soda Balance in Korea [Unit: K DMT/Year] (E) 2017(E) Production 1,890 1,940 1,940 1,920 1,960 Import Export Domestic 1,393 1,426 1,344 1,433 1,456 (Source: Korea Chlor-Alkali Industry Association/ As of 2016) 1) Weak consumption in the main industries and the export volume had huge increased in ) Production is decreased due to HCC s S/D in Ulsan in Oct ) Export is decreased due to captive usage increase in Caustic Soda Export from ROK (kdmt/y) 2016 Jan~Jun Australia NZ US Canada Thailand Vietnam Singapore Malaysia Indonesia India Philippines Papua New Guinea Others Total (Source: Export Custom Statistics as of June 2016 Korea) 1) Main export country is Australia as a long term contract 2) After applied ADD to Korean origin, there are no export from Korea to India since ADD: USD % import duty except Hanwha(Tricon) 3) Exporting to Malaysia is slightly increase this year - import duty 20%(2015)->5%(2016)

6 Caustic Soda Balance in Korea. Ⅱ 3. Caustic Soda Application in Korea (Unit: K DMT/Y) (E) 2017 (E) Organic & Petrochemical Inoriganic chemicals Chemical Fiber Water Treatment Ceramic Industry Electronic Industry Paper & Pulp Soap & Detergent Food Others Total 1,362 1,405 1,434 1,500 1,523 (Source: Korea Chlor-Alkali Industry Association/ As of 2016) Based in 2015, Korean domestic caustic soda demand is around 1.4 million DMT Not expect any significant changes from 2015 to 2017 but the chemical fiber will be decreased continuously The main industries for caustic soda consumption are organic & petrochemical(42.2%) and inorganic chemicals(21.9%)

7 1. Chlorine Application in Korea Chlorine & Chlorine Derivatives in Korea. Ⅲ (Unit: K MT/Y) (E) 2017 (E) EDC TDI & MDI ECH Inorganic Chemical Organic Chemical Others Total 1,859 1,889 1,926 1,910 1,944 (Source: Korea Chlor-Alkali Industry Association/ As of 2016) Based in 2015, Korean domestic Chlorine application demand is around 1.9 million MT Not expect any significant changes from 2015 to 2017 but EDC and Inorganic(synthetic hydrochloric acid) will be directly affected by after transforming of Ulsan plant between HCC and Unid The demand of ECH has been decreased throughout this year because Korean heavy industry is in a serious recession

8 Chlorine & Chlorine Derivatives in Korea. Ⅲ 2. Chlorine Application in Korea, % 3.0% 12.9% 12.4% 28.3% 40.3% EDC TDI & MDI ECH Inorganic Chemical Organic Chemical Others 1) Based in 2015, the major demand for chlorine in Korea are Vinyl chain(edc), followed by TDI & MDI and ECH 2) If the current level of higher C2 price will be maintained, the imported EDC will be increased. 3) The future of ECH, its production is uncertain at best, it looks like the current circumstance of the shipbuilding industry will continue to stagnate in Korea

9 Outlook of Korean CA Industry. Ⅳ Current Situation 1. [Domestic Market] The Oversupply of caustic soda will be partially solved after S/D of HCC plant in Ulsan in Oct 2016 but there are still the deepening caustic soda competition among major 5 producers. The market demand are not expected to rise in [Overseas Market] Shale gas revolution contributes to the ECU cost reduction for the US C/A producers, and continues to have competitiveness compared to Asian C/A producers. 3. [Others] Seasonal impact on production cost during summer and winter due to power cost Current subject of discussion on RCEP should be potential threat - Import volume of Liquid caustic soda should be increased without any import duty once the current discussion is completed

10 Thank you