PET Outlook Chase Willett Director Polyester & Polyester Raw Materials CMAI USA
Global PET Demand Americas Asia Europe, MDE & Africa 23 28 1998 21% 45% 34% Tot Dem : 5.6 Mil Tons 24% 39% 37% Tot Dem : 9.7 Mil Tons 26% 39% 35% Average Annual Growth 1998-23 11.5% 81 KMT 23-28 9.% 145 KMT Tot Dem : 14.9 Mil Tons
Polyester Bottle Resin Demand Growth 23-28 Asia less China 15% Americas 28% China 16% Europe/Middle East/Africa 41%
Thousand Metric Tons 6 Americas PET Demand 5 4 3 2 1 1998 1999 2 21 22 23 24 25 26 27 28 U.S. South America Mexico Canada
United States PET Demand Thousand Metric Tons 35 3 25 2 15 1 5 1998 1999 2 21 22 23 24 25 26 27 28 Food Alcohol CSD Dairy Water, Isotonics Pharmaceutical Cosmetics Other PET
Million Metric Tons 25 World PET Demand Percent Operating Rate 84 2 8 15 76 1 72 5 68 64 1998 1999 2 21 22 23 24 25 26 27 28 North America Europe Asia South America Middle East/Africa Operating Rate Total Capacity
Percent 1 PET Regional Operating Rate 95 9 85 8 75 7 65 6 55 5 1998 1999 2 21 22 23 24 25 26 27 28 World North America West Europe Northeast Asia
Asia PET Supply/Demand Million Tons 9 China Demand 8 Non-China Asia Demand 7 Capacity Operating rates 6 5 4 3 2 1 3.1 million tons of Surplus 5.5 million tons of Surplus Op. Rate, % 1 95 9 85 8 75 7 65 6 1998 1999 2 21 22 23 24 25 26 27 28 55
China PET Supply/Demand Thousand Tons 45 4 35 3 25 2 15 1 5 Domestic Demand Capacity Operating rates 1. million tons of Surplus Op. Rate, % 8 3. million tons of Surplus 75 7 65 6 55 5 45 4 1998 1999 2 21 22 23 24 25 26 27 28 35
The China Advantage Construction Cost per Annual Ton of Output After Tax Annual Cash Flow To Generate Reinvestment Per Ton of Output The West $44 - $55 $11 - $138 Asia $4 - $55 $72 - $99 China $27 - $35 $49 - $59 How can they do this?
The China Advantage Low cost domestic technology Nearly 1% local fabrication 1% domestic erection
Dollars per Ton U.S./Asia Price Comparison 14 12 1 8 6 4 2 1998 1999 2 21 22 23 24 25 26 27 28 U.S. Dlvd. Discounted Asia Production Cash Cost Asian Discount to U.S. Importation Costs
U.S. PET Import Status Thousand Tons - Monthly Thousand Tons - Cumulative 3 6 Asia 25 5 2 15 1 Canada Mexico 4 3 2 5 Cumulative Total Imports - May-3 Dollars per Ton Aug-3 Nov-3 Feb-4 3 1-15 U.S. - Asia Price Differential
2 1 - (1) U.S. PET Resin Net Trade Through March 24- Adjusted and Seasonalized -- Metric Tons 3 Net Exports (2) (3) Net Imports (4) 1996 1997 1998 1999 2 21 22 23 24 Canada Mexico Asia Europe South America Middle East & Africa
U.S. PET Resin Imports from Asia Through April 24 - Adjusted and Seasonalized -- Metric Tons 3 25 2 45 15 1 28 84 65 26 18 36 5 6 17 81 GSP - 1996 1997 1998 1999 2 21 22 23 24 Thailand Indonesia India Taiwan Korea South Malaysia Other ASP
North American Convertible Capacity Solid Stating Total Melt Convertible Kosa 835 134 55 Wellman 47 965 495 Nanya 45 835 43 DAK 3 54 24 Total Convertible Capacity 167
Raw Material Utilization Per Unit of PET.58 Paraxylene (PX).22 Ethylene O 2 + O 2 Ethylene Oxide (EO) + + H 2 O.86 Terephthalic Acid (PTA) + Ethylene Glycol (MEG or EG).36 Polyethylene Terephthalate (PET)
6 World Polyester Melt Demand Forecast Million Tons 5 4 3 2 1 1998 1999 2 21 22 23 24 25 26 27 28 Fiber Bottle Resin Other
Global Polyester Raw Material Position Thousand Tons 6 % Operating Rate 1 5 4 3 2 1-1 1998 1999 2 21 22 23 24 25 26 27 28 Polyester Melt Demand Growth PX Cap Growth in Poly Equiv. MEG Cap Growth in Poly Equiv. PX Operating Rate MEG Operating Rate 95 9 85 8 75 7 65
Thousand Tons 6 5 4 3 2 1 Global Polyester Growth Dollars per Ton Margin 6 5 4 3 2 1-1 -1 1998 1999 2 21 22 23 24 25 26 27 28 Polyester Melt Demand Growth MEG Growth in Polyester Equiv. MEG Margin PX Growth in Polyester Equiv. PX Margin
Who Runs Out First? Global Polyester Chain Utilizations @ Various Polycondensation Rates 25 9% 24 25 98% 93% 92% 97% 95% 15% 13% 93% 98% 98% 1% 99% 111% 13% 11% 15% Utilization Rates, % 15% 11% 1% 9% 24 MEG PX PTA MEG PX PTA MEG PX PTA 8% 75% Polyester 8% Polyester 85% Polyester Forecast Global Polycond OR for 24 & 25 ~75% Seasonal variation & volatility potential +/- 5%
Dollars per Ton 16 U.S. PET Economics 14 12 1 8 6 4 2 1998 1999 2 21 22 23 24 25 26 27 28 Paraxylene PTA MEG Conversion PET Price PET Margin
Dollars per Ton 2 U.S. PET Prices 15 1 5-5 Jan-3 May-3 Sep-3 Jan-4 May-4 Sep-4 Jan-5 May-5 Paraxylene PTA MEG Conversion PET Price PET Margin
Million Metric Tons 5. North America PET Demand Percent Operating Rate 94 4.5 4. 3.5 3. 2.5 2. 1.5 1..5 92 9 88 86 84 82 8 78 76. 74 1998 1999 2 21 22 23 24 25 26 27 28 U.S. Mexico Canada Operating Rate Total Capacity