GLOBAL POLYESTER OVERVIEW

Transcription

1 Information Analytics Expertise GLOBAL POLYESTER OVERVIEW Mumbai, India Aug. 214 SUPPLY EXPLOSION IN CHINA Wei Ding, Director (Aromatics & Fibers ) Wei.Ding@ihs.com 214 IHS / ALL RIGHTS RESERVED

2 Agenda Demand Overview Supply Explosion Feedstock -- The Tale of PTA 214 IHS 2

3 Polyester Demand Outpaces GDP Polyester, Million Metric Tons Polyester Growth = 2.6 X GDP Growth 38, 42, 46, 5, 54, 58, 62, 66, GDP (Billion 25 $) 214 IHS 3

4 Regional Disparity In Derivatives Distribution PET TEXTILE FIBER INDUSTRIAL USE FILM OTHERS 214 IHS

5 Polyester Captures the Bulk of Fiber Demand Growth Fibers, Million Metric Tons GDP Growth (%) 8, 6, 4, 2, -2, , Growth of Cotton Growth of Polyester Growth of Other Fibers GDP Growth IHS 5

6 PET Still Has a Great Potential 1 Per Capita Demand, KG World Average = 2.6 KG 2 Per Capita GDP, USD CHI ISC SEA KOR NAM SAM WEP CEP FSU AFR MDE JAP 214 IHS 6

7 Fibers Are Leading the Way 8 All In Melt Equivalent, Million Metric Tons 6 AAGR: 4.4% 4 AAGR: 5.% 2 AAGR: 6.1% Polyester Fiber PET Resin Others 214 IHS

8 Asia Dominates Demand Growth Million Metric Tons Americas Europe Africa & Middle East Asia (Exclude China) China 214 IHS 8

9 Demand Engines in China Have Been Slowing 32 YOY Growth, % SOFT DRINK FABRIC GDP 214 IHS 9

10 Agenda Demand Overview Supply Explosion Feedstock -- The Tale of PTA 214 IHS 1

11 Overbuild is Intensifying Million Metric Tons Polyester Poly Condensation Operating Rate (%) 1 Forecast Demand Growth Hypo Capacity Growth 216 China 218 Asia (Exclude China) Africa & Middle East CIS & Baltic States Europe Americas Operating Rates % 214 IHS 11

12 PSF Always Affected by Substitutes 25 Million Metric Tons Operating Operating Rate (%) Rate World Capacity World Demand World Op Rate IHS 12

13 Filament Investment Rush 6 Million Metric Tons Operating Operating Rate, Rate % World Capacity World Demand World Op Rate IHS 13

14 PET a Hard Time is Underway 4 Million Metric Tons Operating Rate (%) Operating Rate World Capacity World Demand World Op Rate IHS 14

15 PET Investments More Than The Market Can Handle Polyester Bottle Resin Million Metric Tons Operating Rate (%) Demand Growth Americas Europe Africa & Middle East China Asia (exclude China) Operating Rate Effective Operating Rate IHS

16 Radical Changes to Regional Export Landscape 4. Million Metric Tons CHI KOS TAI 214 IHS 16

17 Overbuilds Depress Profitability 3 Domestic, CNY Export, USD Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 PET EXPORT PET POY PSF 214 IHS 17

18 Will Investor Fervor Cool Off? Positive Signs: Chemical Fiber Investment In China Major producers have almost Billion CNY YOY Growth Rate completed an aggressive expansion wave. NDRC s guideline has changed, no longer encouraging new 6 2. capacities in East China (1.) Complexity: Local governments. Projects may move inland. Investment YOY Growth Rate Consumers desire to integrate upstream. 214 IHS 18

19 Agenda Demand Overview Supply Explosion Feedstock -- The Tale of PTA 214 IHS 19

20 Demand Capacity World PTA Capacity Versus Demand Million Metric Tons Operating Rate, % China Asia-China EMEA Americas Operating Rate 214 IHS 2

21 Global PTA Capacity Growth Million Metric Tons Operating Rate (%) PQS 64 KTA Lotte UK DAK US M&G 1.2 MMT Global Demand Growth China India Subcontinent NEA net China SEA Europe Middle East & Africa N. America S. America Operating Rate IHS 21

22 Diminishing PTA Trade NEA 1 NAM -1 SAM MEA Europe ISC China 2 1 SEA 21/213/218 NET IMPORT/EXPORT MILLION METRIC TONS 214 IHS 214 IHS, Inc. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.

23 Asia PTA Spreads 3 Dollars Per Metric Ton Operating Rate, % $125 Per Ton Spread PTA Spread Over PX PTA Global Operating Rate IHS 23

24 Can the PTA Industry Realistically Rationalize? Capacity (MMT): Demand (MMT): Number of Plants: Average Plant Size (KMT): Excess Capacity Rationalize Demand To Achieve 85% Industry Utilization Capacity to Rationalize (MMT): 9 2 Plants to Rationalize (#): Plant Size (KMT): <= 38 <= IHS 24

25 Can the PTA Industry Realistically Rationalize? Capacity (MMT): Demand (MMT): Number of Plants: Average Plant Size (KMT): Excess Capacity Rationalize Demand To Achieve 85% Industry Utilization Capacity to Rationalize (MMT): 9 2 Plants to Rationalize (#): Plant Size (KMT): <= 38 <= IHS 25

26 Pricing Campaign -- Salvation or a Temporary Relief 12 Thousand Metric Tons CNY Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Capacity Lost PTA(contract)-PX 214 IHS 26

27 Conclusion PTA: A tough cycle remains on track until after expansions slow down. Proactive throughput management is much better than forced shutdowns. Polyester: The market will continue to be chronically oversupplied. Trade barriers are likely to further increase. Relative disadvantage in feedstock pricing negotiations may not substantively change. 214 IHS 27