Maleic Anhydride Chain - World Market Overview

Chemicals Committee Meeting at APIC 2015

Seoul, 8 May 2015

(Anna) Zhao Na
APIC 2015
AGENDA

Feedstock Butane & Benzene Price Trends vs. Crude Oil

Butane and Benzene Based Production Economics

Overview of World Supply & Demand Conditions

UPR and Other Applications

Conclusions

Source: Tecnon OrbiChem

APIC 2015
WTI & BRENT CRUDE OIL PRICES 2005-2016
(US EIA Short Term Forecast)
$/bbl
140

120 Brent

100
WTI

80

60

40

20

0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Source: US EIA
APIC 2015
US N-BUTANES & CRUDE OIL PRICES
$/ton
1,200

US n-Butanes
1,000

800 Brent Crude

600
WTI Crude

400

200

0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: Tecnon OrbiChem

APIC 2015
US N-BUTANES vs WTI CRUDE OIL PRICES
N-Butanes ($/ton)
1,100

1,000

900

800

700

600

500

400

300
30 40 50 60 70 80 90 100 110 120 130 140

WTI ($/bbl)
Source: Tecnon OrbiChem
APIC 2015
WE MIXED BUTANES, BENZENE
& BRENT CRUDE OIL PRICES
$/ton
1,600

1,400 WE Benzene

1,200
WE Mixed
Butanes
1,000

800 Brent Crude

600

400

200
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: Tecnon OrbiChem

APIC 2015
CHINA BENZENE, ASIA BUTANE
& BRENT CRUDE OIL PRICES
$/ton

1,800

1,600 Petroleum Benzene

1,400
Coal Benzene
1,200

1,000
Asia Butane
800

600 Brent Crude

400

200

0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: Tecnon OrbiChem

APIC 2015
UNITED STATES MALEIC ANHYDRIDE MARGIN
OVER 1.10 x BUTANE
$/ton
2,000

US Maleic
Anhydride
1,500 1.10 x US
Butane
Margin over
1.10 x Butane
1,000

500

0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: Tecnon OrbiChem

APIC 2015
CHINA MALEIC ANHYDRIDE MARGIN
OVER 1.15 x BENZENE
$/ton
2,000

China
1,700 Maleic
Anhydride
1,400
1.15 x China
Coal Benzene
1,100

Margin over
800 1.15 x China Coal
Benzene
500

200

-100
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: Tecnon OrbiChem

APIC 2015
CHINA MALEIC ANHYDRIDE MARGIN
OVER 1.14 x BUTANE
$/ton

2,000

China
Maleic
1,600 Anhydride

1.14 x Asia
1,200 Butane

Margin over
1.14 x Butane
800

400

0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: Tecnon OrbiChem

APIC 2015
WORLD MALEIC ANHYDRIDE
SUPPLY & DEMAND BY REGION
1,000 Metric Tons

3,000
World Capacity

2,500 North America

Production | Consumption Northeast Asia
2,000
S & SE Asia

1,500 ME & Africa

East Europe
1,000
West Europe

500 South America

China
0

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Source: Tecnon OrbiChem

APIC 2015
WORLD MALEIC ANHYDRIDE CAPACITY BY REGION
1,000 Metric Tons

North America

3,000 Northeast Asia

S & SE Asia

ME & Africa
2,000
East Europe

West Europe

1,000 South America

China

0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Source: Tecnon OrbiChem

APIC 2015
NORTH AMERICA MALEIC ANHYDRIDE
SUPPLY & DEMAND
1,000 Metric Tons

500
Capacity

400 Consumption

Production
300

200

100

0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Source: Tecnon OrbiChem

APIC 2015
WEST EUROPE MALEIC ANHYDRIDE
SUPPLY & DEMAND
1,000 Metric Tons
400
Capacity

Consumption
300

Production

200

100

0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Source: Tecnon OrbiChem

APIC 2015
CHINA MALEIC ANHYDRIDE SUPPLY & DEMAND

1,000 Metric Tons

2,000 Capacity

Consumption

1,500
Production

1,000

500

0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Source: Tecnon OrbiChem

APIC 2015
CHINA BUTANE BASED MALEIC ANHYDRIDE
CAPACITY GROWTH & NEW PLANTS

7% 43% Producer Capacity Start-Up

(ktpa) Date
Zhuhai Unicizers (UPC) 30 Apr 2013
93% 57%
Zibo Qixiang Tengda 100 Nov 2013
2010 2016
Ningbo Jiangning 80 End 2013
Feedstock Butane Benzene
Puyang Shengyuan 50 Aug 2014
1,000 Metric Tons
Shandong Huifeng 50 Dec 2014
2,000
Dongying Qifa 30 Mar 2014
1,500 Dongyin Kede 30 Aug 2014
Shandong Yongshunda 30 Nov 2014
1,000
Yizheng Chemical Fibre 100 Mid 2015
500
Shandong Chenxi 50 H2 2015
0 Jiangsu Yabang 60 H1 2016
2010 2012 2014 2016 2018 2020
Panjin Union (UPC) 80 End 2015

Source: Tecnon OrbiChem

APIC 2015
TOP 10 MALEIC ANHYDRIDE PRODUCERS 2015
Company Location Capacity % of
(ktpa) Total
Huntsman Corporation United States 154 5.5
Jiangsu Yabang Group China 150 5.4
Bohai Chemicals China 140 5.0
Sasol/Huntsman Germany 105 3.8
Polynt Italy 101 3.6
Shanxi Tayiuan Qiaoyou Chemicals China 100 3.6
Zibo Qixiang Tengda Chemical Co. China 100 3.6
Ningbo Jiangning Chemical China 80 2.9
Shandong Hongxin Chemical Industry Co. China 76 2.7
Lanxess United States 73 2.6
Total Capacity of Top 10 1,079 38.5
Total Capacity World 2,800

Source: Tecnon OrbiChem

APIC 2015
WORLD MALEIC ANHYDRIDE NET TRADE
2010 - 2014
1,000 Metric Tons

100

80 2010

60 2011

ME & Africa
2012

S & SE Asia
40
S America

W Europe 2013
20
2014
0
N America

E Europe

NE Asia

China
-20

-40

-60

-80

Source: Tecnon OrbiChem

APIC 2015
WORLD PURE MALEIC ANHYDRIDE APPLICATION
BY REGION 2010 & 2014
1,000 Metric Tons
800

UPR

600 BDO

Others
400

200

0
2010
2014

2010
2014

2010
2014

2010
2014

2010
2014

2010
2014

2010
2014

2010
2014
North South West East ME & S & SE NE China
America America Europe Europe Africa Asia Asia

Source: Tecnon OrbiChem

APIC 2015
UPR MARKET
UPR squeezed by feedstocks with very volatile pricing
o Styrene is the biggest component (at more than 35%) of UPR and more
volatile than maleic
Demand should be stimulated by lower prices and
a pick-up in downstream applications including:
o Pipe (construction), Marine
o Wind Energy, Automotive
UPR still faces challenges:
o In Europe & US due to environmental concerns over styrene in
particular.
o In Asia from oversupply - Chinese UPR capacity ran at 50% in 2014 but
demand growth slows down further
Bio-based UPR is a long way off but opportunities exist in styrene-free UPR
and other initiatives.

Source: Tecnon OrbiChem

APIC 2015
EUROPEAN ORTHOPHTHALIC RESIN
COST OF RAW MATERIAL 2004-2015
/ton
1,500

1,200

900

600

300

0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Product Location Definition Factor

Composite West Europe
Styrene West Europe Contract Barges ARA FOB 0.34
Monopropylene Glycol West Europe Industrial Grade Contract DDP 0.27
Phthalic Anhydride West Europe Domestic Molten DDP 0.25
Maleic Anhydride West Europe Molten Contract Price DDP 0.14

Source: Tecnon OrbiChem

APIC 2015
UPR MARKET SEGMENTATION

Tanks & Infrastructure

Pipes 39%
18% Building
21%

Electrical Industrial
8% 10% Marine
3%
Marine
Others 9% Others
8%
11%
Gelcoats
Transport Architecture Transport
7%
14% & 5%
Artificial
Structure
Marble
32%
15%

Europe China

Source: Cefic European UP/VE Resin Association; Chinese Society for Composite Materials
APIC 2015
CONCLUSIONS

The impact of low benzene prices on the global maleic market will be felt in
terms of demand improvement ,while butane is likely to maintain its cost
advantage over benzene as a maleic feedstock in the long run.
The global maleic market has been showing modest improvement in the past
few years in US and Europe, strong growth in the Middle East and Southeast
Asia and slowing growth in China
High transportation costs, for heating etc. mean that maleic remains a largely
regional market. However, new trading opportunities have emerged amid
lengthening supply in China and Northeast Asia and steady demand in
Middle East and Southeast Asia.
Butane based maleic has continued to grow in China due to its cost
advantage over benzene and easier availability of feedstock butane - both of
which could lead to increasing maleic exports from China.
UPR has maintained its dominant share of maleic consumption, but growth
has slowed in China.

Source: Tecnon OrbiChem

 ..your source of expert
chemical industry knowledge