polyamide intermediates – world market overview

(Emma) Liu Xiang

Synthetic Fibres Raw Materials Committee Meeting at APIC 2015

Seoul, 8 May 2015

Polyamide Intermediates – World Market Overview

2,500

3,000

3,500

4,000

4,500

5,000

5,500

6,000

6,500

7,000

7,500

1984 1988 1992 1996 2000 2004 2008 2012 2016 2020

Source: Tecnon OrbiChem

Forecast Growth 2.9%

pa

Growth 3.4% Growth 3.0%

Growth 2.7% pa

Capability to produce

Annual CaprolactamConsumption

1,000 Metric Tons

If no new plants

2018-2020

APIC 2015

WORLD CAPROLACTAM CAPABILITY versus DEMAND

-200

0

200

400

600

800

1,000

1,200BA

SF

DSM Ube

Hon

eyw

ell

CPD

C

Capro

Cor

p

Lanx

ess

Sum

itom

o

Dom

o

C.I.

S

Pola

nd

India

Oth

ers

Sino

pec

Boh

ui

Shand

ong H

ongye

Zhe

jiang

Juh

ua

Shand

ong L

uxi

Hub

ei S

ann

ing

Fujia

n Ti

anc

hen

Heb

ei X

uyang

Shanx

i La

nhua

Fujia

n Li

heng

Shanx

i Yang

mei

Hengyi


Baling

Fujian

China

China

China

2011

Closures2013-2015

Additions 2012

Additions 2014

Additions 2015-2016

Additions 2013

Additions 2017

Shijiazhuang

APIC 2015

CAPROLACTAM CAPACITY 2011 – 2017

1,000 Metric Tons per Year

0

500

1,000

1,500

2,000

2,500

3,0002

014

20

20

20

14

20

20

20

14

20

20

20

14

20

20

20

14

20

20

20

14

20

20

20

14

20

20

20

14

20

20


1,000 Metric Tons

Textile Filament

High Ten Yarn

BCF & Staple

PA6 EngineeringResin

North America

South America

West Europe

East Europe

ME &Africa

S & SE Asia

NEAsia

China

APIC 2015

WORLD POLYAMIDE 6 DEMAND BY REGION

-750

-650

-550

-450

-350

-250

-150

-50

50

150

250

350

450

1,000 Metric Tons

S &

SE A

sia

E E

uro

pe

W E

uro

pe

N A

merica

S A

merica

ME &

Africa

Taiw

an &

S K

ore

a

Chin

a

Japan

2004

2014

2005

2004

2006

2007

2008

2009

2010

2011

2012

2013

2014 est


APIC 2015

WORLD CAPROLACTAM REGIONAL NET TRADE 2004-2014

-750

-650

-550

-450

-350

-250

-150

-50

50

150

250

350

450

1,000 Metric Tons

S &

SE A

sia

E E

uro

pe

W E

uro

pe

N A

merica

S A

merica

ME &

Africa

Taiw

an &

S K

ore

a

Chin

a

Japan

2004

2014

2005

2004

2006

2007

2008

2009

2010

2011

2012

2013

2014 est


APIC 2015

WORLD CAPROLACTAM REGIONAL NET TRADE Post 2014 Trends

Forecast Trend to 2020

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150

APIC 2015

ASIAN CAPROLACTAM IMPORT CONTRACT PRICE vs BRENT CRUDE OIL

Source: Tecnon OrbiChem Brent Crude Oil $/bbl

Asian Caprolactam Import Contract $/ton

1999-2008

2009

2010

2011

2012

2013

2014


0

500

1,000

1,500

2,000

2,500

3,000

3,500

0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150

Brent Crude Oil $/bbl

Asian 0.865 PTA + 0.35 MEG $/ton

1999-2008

2010

2009

2011

2012

2013

2014

APIC 2015

ASIAN 0.865PTA PRICE + 0.35MEG PRICEvs BRENT CRUDE OIL

0

500

1,000

1,500

2,000

2,500

3,000

3,500

0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150

2015?

APIC 2015

ASIAN 0.865PTA + 0.35MEG PRICE TREND & CAPROLACTAM PRICE TREND vs BRENT CRUDE OIL


Caprolactam

PTA + MEG

$/ton

0

500

1,000

1,500

2,000

2,500

3,000

3,500

0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150

APIC 2015

AVERAGE PET RESIN AND PA6 POLYMER COSTSvs BRENT CRUDE OIL


PA6

PET

2015?$/ton

Asia Cotton Price (May-Dec 2014)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150

$/ton Caprolactam


APIC 2015

DEPENDENCE OF CAPROLACTAM PRODUCTION COST ON CRUDE OIL PRICE

Cyclohexane

Packing, loading shipping

Fixed costs of supplying plants

Cats & Chemicals Fixed costs of

caprolactam plant

Cost of Production in Asia

Crude Oil Price $/bbl

Delivery

Energy dependant costs

Energy related costs (steam, ammonia, etc.)

12

34

5 6

7

89

1011

1212

34

5

7

6

8 910

1112

1 2

3 4

510

9

8

6 7

11

1251

2 3

4

6

7 8

9

10

11

12

2009

2010

2011

2012

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150

$/ton Caprolactam


APIC 2015

DEPENDENCE OF CAPROLACTAM PRODUCTION COST CRUDE OIL PRICE

Cyclohexane

Packing, loading shipping

Fixed costs of supplying plants

Cats & Chemicals Fixed costs of

caprolactam plant

Cost of Production in Asia

Crude Oil Price $/bbl

Delivery

Energy dependant costs

Energy related costs (steam, ammonia, etc.)

12

3

456

7 89

2013

2014

1211

10

World Capacity World Tightness

Utilisation Rate Markets Index

96.0% Very Tight 1.4

93.7% Tight 1.2

90.0% Balanced 1

84.0% Loose 0.8

75.0% Over-supplied 0.6

(Sloppy)


APIC 2015

TIGHTNESS INDEX

For a given year:

World Tightness Index = log10

Capability

Capability - Consumption

Capability = Annual Nameplate Capacity less Capacity off line*

* Due to unscheduled stoppages, not scheduled maintenance turnarounds


APIC 2015

TIGHTNESS INDEX

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

1.1

1.2

1.3

1.4

1.5

1.6

60 70 80 90 100 110 120 130 140

Tightness Index

Brent Crude Oil Price $/bbl

VERYTIGHT

TIGHT

BALANCED

OVER-SUPPLIED(SLOPPY)

LOOSE

H2 2009

H1 2010

H2 2010

H1 2011

H2 2011

H1 2012

H2 2012

2013

2014


APIC 2015

CAPROLACTAM PRICE HISTORY - ASIA

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

1.1

1.2

1.3

1.4

1.5

1.6

40 50 60 70 80 90 100 110 120 130 140

Tightness Index

Brent Crude Oil Price $/bbl

VERY TIGHT

TIGHT

BALANCED

OVER SUPPLIED(SLOPPY)

LOOSE


November 2014

APIC 2015

CAPROLACTAM PRICE SCENARIOS – ASIA NOV 2014

Butadiene

Adiponitrile HMDA

Acrylonitrile

HCN by-product

HCN Andrussov

Electro Hydro Dimerisation

H2

Hydrocyanation

Alternatives

+

Adipic acid

AH Salt

PA66 Source: Tecnon OrbiChem

APIC 2015

THE PA66 SUPPLY CHAIN

Invista Orange13.4%

Ascend 15.8%

Rhodia 13.2%

Asahi 2.2%

Invista Victoria21.1%

Invista France13.2%

Invista China15.8%

Runxing5.3%

77%

23%

Invista Orange17.0%

Ascend 20.1%

Rhodia 16.7%

Asahi 2.7%


InvistaFrance16.7%

77%

24%

Invista Orange17.0%

Ascend 20.1%

Rhodia 16.7%

Asahi 2.7%


InvistaFrance16.7%

60%

23%

17%

1,240/1,495 ktpa

Technology

2014

1,495 ktpa

20192009

Hydrocyanation Acrylonitrile EHD

1,895 ktpa


APIC 2015

GLOBAL ADIPONITRILE CAPACITY

800

900

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

1,800

1,900

2,000

1995 2000 2005 2010 2015 2020

1,000 Metric Tons

No new plants2015-2018

Annual Adiponitrile

Consumption

ForecastGrowth 3.7%

Capability to produce= 95% capacity

BASF closes 116 ktpaat Wilton, UK

Growth 3.1%Invista’s 254 ktpa unit at

Orange, USA out of action


APIC 2015

WORLD ADIPONITRILE CAPABILITY vs DEMAND

APIC 2015

WORLD ADIPIC ACID CAPABILITY vs DEMAND

1,500

2,000

2,500

3,000

3,500

4,000

4,500

1995 1999 2003 2007 2011 2015 2019

Adipic Acid Consumption

ForecastGrowth 2.7%

Capability to Produce

Invista closes 450 ktpaat Wilton & Maitland, rebuilds Orange

Growth 4.0%

1,000 Metric Tons


0

500

1,000

1,500

2,000

2,500

3,000

3,500

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

1,000 Metric Tons

Textile Fibre

Bulked Carpet

High Ten Yarn

Staple

PA66 Resin

1.7%

2.4%

3.9%

Growth 2012 - 2020

1.9%


APIC 2015

WORLD POLYAMIDE 66 CONSUMPTION BY END-USE

1,000 Metric Tons

2006-2014 Growth 8%

ForecastGrowth 9%


APIC 2015

CHINA POLYAMIDE 66 SUPPLY & DEMAND

0

100

200

300

400

500

600

700

800

2006 2008 2010 2012 2014 2016

PA66 Capacity

PA66 Net Import

PA66Production

High Tenacity Filament

28%

Airbag5%

Staple4%

Cable Tie8%

Engineering Plastics52%

Textile Filament

3%

End-Use Demand

Shenma43%

Guorui2%

Huafon6%

Huayang2% Invista

16%

Ascend5%

Rhodia4%

DuPont8%

Asahi/Toray

4%Radici1%

Nilit4%

Others4%

Supply by Producer

Consumption 562,000 Tons Supply 580,000 Tons

Source: Tecnon OrbiChem & China Customs

APIC 2015

CHINA POLYAMIDE 66 DEMAND & SUPPLY 2014

APIC 2015

CONCLUSIONS

• Most of the world growth for caprolactam will take place in China, due to:

� Dominance in world production of PA6 textile filament

� Displacement of imports of caprolactam and PA6 polymer

• Massive caprolactam capacity additions in China have createdovercapacity and have reduced cash margins to zero or negative. The expansion enthusiasm slow down this year due to poor margins.

• Some plants have been forced to close in high energy cost regions, more may follow

• The fall in crude oil prices will improve the competitivity of polyamide versus polyester


• Steady growth on the global polyamide 66 demand, but stronger growth is expected to occur in China.

• With Shandong Runxing new ADN plant and Invista’s new HMDA plant to come on stream in China, Increased availability of raw material would help the development of polyamide 66 industry in China.

• New polyamide 66 polyamide capacity has been announced by Huafon Group (40 ktpa mid-2015), Invista (100 ktpa, early 2016), Henan Shenma (40ktpa, 2016).

• Besides existing polyamide 66 polymer players, some adipic acid producers also showed interest of investing polyamide 66 polymer plant to absorb over-supplied adipic acid capacity.


APIC 2015

CONCLUSIONS

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polyamide intermediates – world market overview

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