London, Houston, Washington, New York, Portland, Calgary, Santiago, Bogota, Rio de Janeiro, Singapore, Beijing, Tokyo, Sydney, Dubai, Moscow, Astana, Kiev, Porto and Johannesburg
illuminating the markets
DeWitt
Energy and commodity price benchmarking and market insights
Global Benzene and Toluene
Indian Petrochem 2014
Andy NicholsonV-P Aromatics EMEIArgus DeWitt Mumbai 30th Oct 2014
illuminating the markets
25 Years Toluene & Gasoline
Copyright © 2012 Argus Media Ltd. All rights reserved.
0
150
300
450
600
750
900
1,050
1,200
1,35019
90
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
$/T
Differential Toluene - Spot R'Dam Unleaded Gas (95R) CIF NWE
illuminating the markets
25 Years Benzene & Naphtha
Copyright © 2014 Argus Media Ltd. All rights reserved.
0
150
300
450
600
750
900
1050
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1350
150019
90
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
$/T
Differential
Naphtha cif NWE
Benzene Spot cif ARA
illuminating the markets
Regional Spot Toluene Prices Weekly Averages
Copyright © 2012 Argus Media Ltd. All rights reserved.
900
1,000
1,100
1,200
1,300
1,400
1,500
Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14
$/t
FOB Korea USGC NG FOB ARA
illuminating the markets
Regional Spot Benzene Prices weekly Averages
Copyright © 2012 Argus Media Ltd. All rights reserved.
800
900
1,000
1,100
1,200
1,300
1,400
1,500
1,600
Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14
$/T
CIF ARA FOB Korea FOB USGC
illuminating the markets
Global Aromatics Supply
Copyright © 2013 Argus Media Ltd. All rights reserved.
Gasoline Pool (Reformate)
87% Mixed Xylenes
77% Toluene PX (MSTDP, MPX)
7% MX (Disp)
94%
41% Benzene
16% BZ (Disp, MSTDP, HDA)57%
illuminating the markets
US Refining Capacity is growing and will increase further in 2015
Copyright © 2013 Argus Media Ltd. All rights reserved.
• Valero and others are adding distillation capacity to process more shale crudes
80
82
84
86
88
90
92
94
96
17100
17200
17300
17400
17500
17600
17700
17800
17900
J-13 F-13 A-13 M-13 J-13 S-13 O-13 D-13 J-14 M-14 M-14 J-14 A-14
Op
RateCapa
city
2013-2014 EIA Weekly U. S. Operable Crude Oil Distillation Capacity (‘000 blsper Day) and Operating Rate
Distillation Capacity Op Rate
illuminating the markets
US domestic gasoline demand to continue to fall
Copyright © 2012 Argus Media Ltd. All rights reserved.
• Slow Economic Growth; Does not include exports• Renewable Fuel Standard-Target is 36 B gallons of ETOH by 2023(not achievable)• CAFÉ Standard with targets of 35.5 MPG by 2016 and 54.5 MPG by 2025Source: EIA and DeWitt forecast
illuminating the markets
The US has sought to manage naphtha length by increasing exports of gasoline
Copyright © 2014 Argus Media Ltd. All rights reserved.
illuminating the markets
• Yields impacted by:◦ Quality of naphtha◦ Severity◦ Operating rate
• Three contributions to gross margin◦ Octane, or blend, value◦ Hydrogen and LPG, credit tied to natural gas, or fuel oil,
price◦ Aromatics, chemical value
Reformer Operations
Copyright © 2014 Argus Media Ltd. All rights reserved.
illuminating the markets
2012 – 2014 Monthly US Toluene Net Trade (t)
Copyright © 2014 Argus Media Ltd. All rights reserved.
-50000
-40000
-30000
-20000
-10000
0
10000
20000
30000
40000
50000
Jan-
12
Feb-
12
Mar
-12
Apr-
12
May
-12
Jun-
12
Jul-
12
Aug-
12
Sep-
12
Oct
-12
Nov
-12
Dec
-12
Jan-
13
Feb-
13
Mar
-13
Apr-
13
May
-13
Jun-
13
Jul-
13
Aug-
13
Sep-
13
Oct
-13
Nov
-13
Dec
-13
Jan-
14
Feb-
14
Mar
-14
Apr-
14
May
-14
Jun-
14
Jul-
14
N Am S Am Asia WE MEA EE Total Net Trade
illuminating the markets
WE Toluene Quarterly Net Trade by Region
Copyright © 2012 Argus Media Ltd. All rights reserved.
-70
-60
-50
-40
-30
-20
-10
0
10
20Q
3 20
09
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Expo
rts
'
000t
Im
port
s
Eurostat
USA
South America
North America
North Africa
MEAG
East Med
Africa
Central Europe
East Europe
South Asia
East Asia
illuminating the markets
India Toluene Imports
Copyright © 2012 Argus Media Ltd. All rights reserved.
0 50 100 150 200 250 300 350
2012
2013
2014 H1
'000t
Singapore Korea S. Thailand EU Others
illuminating the markets
• Supply sources and economic factors that have limited benzene production
• Global Benzene trade flows, with a closer look at the USA, China and India situations
• What is the outlook for the benzene market?
Benzene
Copyright © 2014 Argus Media Ltd. All rights reserved.
illuminating the markets
Numerous Impacts on Benzene Supply/Price
Copyright © 2013 Argus Media Ltd. All rights reserved.
Reformate
HDA
TDP PX Isom
Coal
Pygas
GasolineQuality /Feed Slate
Toluene BVBenzene Demand
Toluene BV
OlefinDemand/Feed
Slate
Coke/SteelDemand
PX Demand
illuminating the markets
Regional Benzene Production Sources 2013
Copyright © 2014 Argus Media Ltd. All rights reserved.
0
3000
6000
9000
12000
15000
USA W.Europe Asia excl China China MEA
kt
Coal
Toluenebased
Pygas
Reformer
illuminating the markets
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2000 2002 2004 2006 2008 2010 2012
KTPyGas Reformate Toluene Coal Imports• Demand was 9 million
tons in 2000• Decreased by nearly
1/3 by 2013.◦ Imports account for
more than 20% of demand
◦ Less extraction feed offset by decreased demand from derivative units
2000-2013 Total US Benzene Production with Imports
Copyright © 2014 Argus Media Ltd. All rights reserved.
illuminating the markets
W.Europe Benzene Production
Copyright © 2012 Argus Media Ltd. All rights reserved.
0
1000
2000
3000
4000
5000
6000
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8000
9000
2010 2011 2012 2013 2014 2015 2016 2017
'000t
Coal
HDA
TDP
MSTDP & MPX
Reformate
Pygas
illuminating the markets
EU15 Quarterly Net trade as Benzene Equivalent
Copyright © 2012 Argus Media Ltd. All rights reserved.
-50
0
50
100
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450Q
3 20
09
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014Ex
port
s '0
00t
I
mpo
rts
Source: Eurostat
Cyclohexane
Cumene/Phenol
Styrene/EB
Benzene
Aniline
illuminating the markets
• Reformate extraction limited by:◦ declining petroleum-based gasoline demand◦ More usage of “renewable” or “green” blend components◦ Shift in crude quality◦ More emphasis on middle distillate production
• Pygas extraction limited by:◦ Advantaged “light” feeds produce much less pygas
Changes limit benzene production in the US and Europe
Copyright © 2012 Argus Media Ltd. All rights reserved.
illuminating the markets
2012 – 2014 Monthly US Benzene Imports with Spot Price
Copyright © 2014 Argus Media Ltd. All rights reserved.
4.00
4.20
4.40
4.60
4.80
5.00
5.20
0
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40
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100
120
140
160
180USD/USG'000 t Korea Japan India W Europe FOB USGC
Benzene Imports by Country of Origin (in '000 t)
Jan - Jul2013 2014 Change Change in %
Korea 284 397 113 39.7%Japan 193 207 14 7.2%Brazil 112 73 -39 -35.0%India 95 80 -15 -15.8%Canada 132 119 -13 -9.8%Saudi Arabia
69 6 -63 -91.1%
Other 213 300 86 40.5%
Total 1098 1181 83 7.6%
illuminating the markets
• PX demand growth double that of benzene
• 16.5 mn t new paraxylenecapacity planned in 4 years
• 6mn t new benzene capacityplanned, mostly linked to PX
• PX cannot run at capacity in next five years
• Uncompetitive PX capacitywill be rationalized
• Feedstock a constraint for some PX capacity
Paraxylene and Benzene Capacity & Consumption
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15000
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35000
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2008 2009 2010 2011 2012 2013 2014 2015
World Paraxylene & Benzene Demand
PX Bz
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2012-2014 Benzene Trade In China (t)
Copyright © 2013 Argus Media Ltd. All rights reserved.
0
20000
40000
60000
80000
100000
120000
140000
Jan-
12
Feb-
12
Mar
-12
Apr
-12
May
-12
Jun-
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Jul-1
2
Aug
-12
Sep-
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Oct
-12
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-12
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-12
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Feb-
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Mar
-13
Apr
-13
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-13
Jun-
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Jul-1
3
Aug
-13
Sep-
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-13
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-13
Jan-
14
Feb-
14
Mar
-14
Apr
-14
May
-14
Jun-
14
Jul-1
4
Aug
-14
Imports (t) Exports (t)
illuminating the markets
India Benzene Exports
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0 100 200 300 400 500 600 700
2012
2013
2014 H1
'000t
Singapore Saudi Arabia USA EU Others
illuminating the markets
2014 World Benzene Trade
Copyright © 2014 Argus Media Ltd. All rights reserved.
1566106
150
593
1056750 328
48189
illuminating the markets
US Benzene Costs from Toluene Conversion and Import costs ex- Korea
Copyright © 2012 Argus Media Ltd. All rights reserved.
300
350
400
450
500
550
J'12 M M J S N J'13 M M J S N J'14 M M J S
¢/G
AL
Benz
ene
HDA TDP STDP FOB Korea +75 $/t freight
illuminating the markets
Benzene Pricing and Toluene based Costs - Korea
Copyright © 2012 Argus Media Ltd. All rights reserved.
0
200
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1,000
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Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14
$/t
STDP TDP HDA fob S.Korea
illuminating the markets
25 Years Benzene HDA Economics
Copyright © 2012 Argus Media Ltd. All rights reserved.
0
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$/t
HDA @ Toluene Market Value
Benzene Spot cif ARA
HDA @ Toluene BV
illuminating the markets
• US Imports of benzene and exports of styrene will increase.• Availability of aromatics’ feed-stocks in Europe is falling.• India, the Middle East and the US will supply incremental C6
molecules to meet European needs.• Korea and India will be the main sources of increased benzene
exports to the US and Europe, based on co-product paraxyleneproduction.
• Paraxylene demand constraints will limit Asian benzene length.• China’s benzene import needs appear to be stabilising.• Toluene is long in Asia and Europe, tight in the US.• Disproportionation economics underpin US benzene pricing. • Hydrodealkylation economics may underpin European pricing.
Summary/Forward View
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