24-25 Jun, 2010 - Shanghai, CHINA
Sofitel Shanghai Jin Jiang Oriental Pudong
Sofitel Shanghai Jin Jiang Oriental Pudong
6th Asia Aromatics & Derivatives Conference was organised by CMT in Shanghai, China during 24-25 June 2010. The conference was attended by major petroleum and petrochemical players from a wide range of geographical areas, mainly from the Middle East and Asia. The presentation done by well-known aromatics producers, consultants, traders and financial institutions, covered various prospect of aromatics business including economy outlook, technology innovation, aromatics market reviews. Benzene, styrene, phenol, para-xylene, PTA, PET and polyester markets were discussed thoroughly during the event.
Nexant presented benzene and para-xylene market dynamics and outlook. Global aromatics business seems to be under severe pressure from recent plunge in demand in tandem with new capacity build ups in the Middle East and Asia. Aromatics margins and profitability are, therefore likely to be depressed over the next few years before recovering as demand catches up with supply. The impact on feedstocks and new imbalanced of aromatics capacity will alter the global trade flow greatly.
PTTAR, the largest aromatics producer in Thailand, emphasized the importance of strong back-integration of aromatics units with refinery operation and condensate splitter. The integration provides benefits in term of facility sharing, hydrocarbon exchange, and feedstock and operation flexibility. It is also alleviated the exposure of aromatics units to the cyclicality of petrochemical business as refining business is less cyclical.
SINOPEC, the largest petrochemical producer in China, elaborated the recent development in Chinese aromatics market including benzene, styrene, phenol, caprolactam, para-xylene and PTA. The supply/demand projection shows a rapid growth in both demand and new capacity in China. The impact of new capacities could result in an oversupply situation for benzene, phenol and PTA, while the imports will still be required for para-xylene, styrene and caprolactam.
ANZ Bank provided recent development and an outlook of China's economic growth as well as an impact on major event such as the increasing flexibility of the RMB exchange rate. It is stressed that there is room for further growth of Chinese economy driven by urbanisation and government stimulus package, while dramatically increasing foreign direct investment in other countries has been witnessed. Nevertheless, there are risks to consider including strong inflation rates, skyrocketing property prices and trade barriers.
An insightful market information in Vietnam was presented by Vietnam's oil major, PetroVietnam. Although aromatics demand is relatively small and fragmented due to lack of aromatics and aromatics derivatives investment, the growth is projected to be unprecedented in the next few years. Several new refinery will provide feedstock and supporting facilities for aromatics production. Among several announcement on aromatics investment, the 2nd (Nghi Son) and 3rd (Long Son) refineries will include aromatics production facilities from reformer and steam crackers, respectively. Benzene derivatives demand currently styrenics polymer and LAB, while xylenes derivatives demand will see a major boost in PET fibre. In addition, petrochemical investment is supported by tax incentives by Vietnamese government
Borzouyeh Petrochemical from Iran elaborated the aromatics business in Iran, including capacity and feedstocks employed. The current four aromatics facilities are fully-integrated and located at nearby site, enhancing production economics. Potential investment in aromatics capacity was also discussed.
Kuwait Institute for Scientific Research stressed the important in development of aromatics industry in each GCC countries. Key challenges for the Middle East includes the control of feedstocks by government as well as lack of skilled labour and technology. LAB and PTA market was also reviewed, showing continuing growth in the forecast period.
METAPROCESS is currently conducting a feasibility study for Natural Gas to PET project. The process has an untraditional route to convert methanol to BTX. The project captured the current flared gas from associated gas by-product of oil production, providing significant cost advantage. The process was developed and proven in New Zealand's "gas to gasoline" technology.
A detailed review of para-xylene and PTA business was done by Reliance. Polyester fibre will continue to the fibre of choice due to its cost and property, and will drive aromatics market in the future. The growth of PTA will be driven by China and India, supporting a recovery from a low point in 2008. With new capacity expansion, China will become more self-sufficient in both para-xylene and PTA. Margins distribution along the value chain will be determined by several factors such as refinery margins, gasoline demand, entry-barrier among PX, PTA and polyester.
Global Service International, a global PET and polyester fibre trade, gave a picture of PET bottle grade market dynamics. The PET industry has undergone a major restructuring as it saw major players such as Eastman and Wellman exited the business, while several players faced financial difficulty. Compared with China, although PET demand in the Middle East is relatively small, there are potentials for new investment in PET facilities, supporting by the available of low cost MEG, low tariff and freight cost to major markets in the United States and Western Europe. PET capacity surplus will creep up during the next few years, concentrated in the Middle East and Asia. China will continue to have high surplus driven by robust domestic market, while exports opportunity is limited by trade barrier.
Market review of styrene, starting from cracker economics to the competition of styrenics polymer with polyolefins and other polymers was presented by Platts. A trend towards light feedstock for steam crackers in United States, Western Europe and Asia Pacific has limited C4 and aromatics production, while new benzene capacity additions globally are adding pressure on benzene margins including benzene spread over toluene and naphtha. Styrene market is adversely affected by new capacity in Iran and China, while future demand will be supported mainly by strong ABS into white goods and urbanisation in developing countries such as China and India.
Knowgenix gave a global and Asian picture of cumene, phenol and acetone, plus a detailed information on individual countries in major Asian countries. The presentation emphasized the importance of Asian market in the global context as China and other fast-growing countries will lead global phenol/acetone growth. This is also expected to support by an increase in benzene and propylene availability in the near future. The impact of new Chinese capacity will alter the trade flow pattern adding pressure on major exporters into China.
