Light Olefins Market Review. Bill Hyde, Senior Director Olefins and Elastomers Foro Pemex Petroquimica June 7, 2012

Transcription

1 Light Olefins Market Review Bill Hyde, Senior Director Olefins and Elastomers Foro Pemex Petroquimica June 7, 212

2 N. America Energy Market Shift Felt Around The Petrochemical World $US per Million Btu Gas as % of Crude 2 12% % 14 8% % 8 6 4% 4 2% 2 % Crude (WTI) Natural Gas Gas as % of Crude 2

3 N. America Energy Market Shift Felt Around The Petrochemical World $US per Million Btu Gas as % of Crude 2 12% % 14 8% % 8 6 4% 4 2% 2 % Crude (WTI) Natural Gas Gas as % of Crude 3

4 U.S. & West Europe Integrated Polyethylene Cash Margins Cents Per Pound, Polyethylene 25 Dollars Per Metric Ton US Ethane to PE Chain Margin W.Europe Naphtha to PE Chain Margin

5 U.S. & West Europe Integrated Polyethylene Cash Margins Cents Per Pound, Polyethylene 25 Dollars Per Metric Ton US Ethane to PE Chain Margin W.Europe Naphtha to PE Chain Margin

6 Agenda Ethylene Demand Capacity Trade Propylene Asia Europe/Middle East North America Conclusions

7 211 Global Ethylene Demand = 127 MM tons Driven By Polyethylene Markets In Asia/Pacific Asia/Pacific 45% Americas 25% Africa/Middle East 7% Europe 23% Equivalent Ethylene Demand By Major Region

8 211 Global Ethylene Demand = 127 MM tons Driven By Polyethylene Markets In Asia/Pacific Asia/Pacific 45% Americas 25% Ethylbenzene 7% EDC 11% Ethylene Oxide 14% All Others 8% Africa/Middle East 7% Europe 23% Total PE 6% Equivalent Ethylene Demand By Major Region Ethylene Demand By End-use Market

9 Cumulative Ethylene Demand Growth Driven By Developing Regions Million Metric Tons, Ethylene % of Annual World Growth Developed Regions 82% 65% 53% 4% 3% Developed Regions Developing Regions World

10 Global Ethylene Capacity = 147 MM tons 211 Production = 127 MM tons; 86% Utilization Asia/Pacific 33% Americas 27% Africa/Middle East 2% Europe 2% Ethylene Nameplate Capacity By Major Region

11 Global Ethylene Capacity = 147 MM tons 211 Production = 127 MM tons; 86% Utilization Asia/Pacific 33% Americas 27% Ethane 34% Propane 8% Butane 4% Others 2% Africa/Middle East 2% Europe 2% Gas Oil 3% Naphtha 49% Ethylene Nameplate Capacity By Major Region Ethylene Production By Feedstock

12 Regional Ethylene Capacity Trends 2 Million Metric tons by 22 Regional Capacity Million Metric Tons World Capacity Million Metric Tons World NAM MDE WEP Asia Other

13 Regional Ethylene Capacity Trends 2 Million Metric tons by 22 Regional Capacity Million Metric Tons World Capacity Million Metric Tons World NAM MDE WEP Asia Other

14 Regional Ethylene Capacity Trends 2 Million Metric tons by 22 Regional Capacity Million Metric Tons World Capacity Million Metric Tons World NAM MDE WEP Asia Other

15 World Ethylene Net Equivalent Trade Million Metric Tons, Ethylene Net Exports Net Imports N. America West Europe Middle East Asia (ex-china) Others China 15

16 World Ethylene Net Equivalent Trade Million Metric Tons, Ethylene Net Exports Net Imports N. America West Europe Middle East Asia (ex-china) Others China 16

17 World Ethylene Net Equivalent Trade Million Metric Tons, Ethylene Net Exports Net Imports N. America West Europe Middle East Asia (ex-china) Others China 17

18 Around the Propylene World

19 211 Global PG/CG Propylene Market Refinery 3% Supply On- Purpose 13% Acrylonitrile 7% Demand Propylene Oxide 8% Oxo- Alcohol 8% Other 1% Steam Cracker 57% Polypropylene 67% 79 Million Metric Tons

20 Global On-Purpose Propylene Production Million Metric Tons Percent, % Propane Dehydro Metathesis Olefin Cracking Methanol-to-Olefins HS FCC Others % Total Production

21 Asia

22 Chinese Propylene Capacity Additions Propylene Capacity, Million Metric Tons Forecast Steam Cracker Refinery Produced Metathesis PDH MTO and MTP

23 Nontraditional Chinese Olefins Supply Sources 15 Coal-to-Olefin: 3.5 million metric tons ethylene and 4.8 million metric tons propylene 6 Propane dehydrogenation: 3.5 million metric tons propylene 3 Methanol-to-Olefin: 9 thousand metric tons ethylene and propylene 1 Butene dehydrogenation: 3 thousand metric tons butadiene

24 Europe and the Middle East

25 West Europe Propylene Supply/Demand Profile 211 Production by Feedstock Stm. Crackers 72% Acrylic Oxo Alc. Acid 7% 5% Acrylonitrile 6% Cumene 6% Demand by End-Use Propylene Oxide 13% Others 4% Others 4% FCC/Splitters 24% PP 59%

26 Middle East Propylene Supply/Demand Profile 211 Production by Feedstock Demand by End-Use Stm. Crackers 5% FCC/Spl. 6% Acrylonit. 1% Oxo Alc. 3% Propylene Oxide 2% Others 1% Others 44% PP 93%

27 Middle East Propylene Capacity Capacity, Million Metric Tons Steam Cracker FCC Propane Dehydrogenation Metathesis HS FCC

28 West Europe Propylene Net Equivalent Trade Thousand Metric Tons 25 Exports Imports Propylene Acrylonitrile Polypropylene Others Net Trade

29 North America

30 North America Propylene/C4 Olefin Volumes Decline Index 1. = NAM Olefin Production From Steam Crackers in NAM Ethylene Production NAM Propylene Production NAM Butadiene Production

31 Dealing Out North America Propylene 211 Estimates Refinery FCC/Coker Steam Crackers Alky 65% LPG/Fuel 15% Splitters 51% Polygas 2% Oligomers 25% Fuels 33% Direct 16% PO 12% Others 5% IPA 22% Cumene 53% Acrylic Acid 6% ACN 1% Cumene 1% PDH 48% PP 57% Oxo Alc. 9% On-Purpose.7 Metathesis 52% Million Metric Tons

32 World Cash Cost Comparison U.S. Dollars Per Metric Ton U.S. Fuel Price U.S. PDH U.S. Light Naphtha Northeast Asia PDH May 212 U.S. RG Spot Price West Europe Naphtha U.S. Splitter Northeast Asia Naphtha U.S. Cents Per Pound 82 U.S. Metathesis U.S. Alky Value

33 North America Propylene Net Equivalent Trade Thousand Metric Tons 4 Net Exports Propylene Acrylonitrile Polypropylene Others Net Trade 33

34 Conclusions Low cost feedstock is driving significant changes in the light olefins markets. North America has returned to a cost advantaged position due to low cost ethane supply. Naphtha will be the incremental ethylene supply and set the price. Base economics will be set by high cost production and result in attractive margins to low cost producers.

35 Conclusions Coproduct propylene supply will not be sufficient to meet demand growth. Significant investment in on purpose propylene capacity will take place in North America and the Middle East to take advantage of attractive feedstock economics. China will add a tremendous amount of on purpose propylene in an attempt to keep up with domestic demand growth.

36