US Aromatics Overview on US Aromatics Feedstocks Adhesives and Sealants Council, Zachary Moore Markets Reporter www.icis.com 1
US Benzene Overview Production Imports/Exports Consumption Summary US Toluene & Mixed Xylenes Overview of Toluene & Mixed Xylenes www.icis.com 2
US Benzene www.icis.com 3
The Benzene Value Chain shows a host of products used in our daily lives. The main driver of US benzene is ethylbenzene for styrene production. Downstream products include tires, footwear and sealants from SBR and insulation and cups from PS The second largest outlet is cumene for phenol production Downstream products include coatings from epoxy resins and computer components from polycarbonate The cyclohexane chain produces carpets and clothing from nylons www.icis.com 4
The Benzene Value Chain shows a host of products used in our daily lives. The main driver of US benzene is ethylbenzene for styrene production. Downstream products include tires, footwear and sealants from SBR and insulation and cups from PS The second largest outlet is cumene for phenol production Downstream products include coatings from epoxy resins and computer components from polycarbonate The cyclohexane chain produces carpets and clothing from nylons The Benzene Value Chain shows a host of products used in our daily lives. The main driver of US benzene is ethylbenzene for styrene production. Downstream products include tires, footwear and sealants from SBR and insulation and cups from PS The second largest outlet is cumene for phenol production Downstream products include coatings from epoxy resins and computer components from polycarbonate The cyclohexane chain produces carpets and clothing from nylons www.icis.com 5
US Benzene vs upstream Update on crude oil outlook/pricing Benzene more volatile than crude Toluenebenzene spread impacts benzene production economics 3.00 2.50 2.00 1.50 1.00 0.50 0.00 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Benzene WTI (Friday close) Toluene Source: ICIS Pricing www.icis.com 6
US Benzene Overview Production Imports/Exports Consumption Summary www.icis.com 7
US Benzene Production Majority of US benzene supply in 2014 was produced in reformers Ethylene unit coproduct was another significant source of US benzene On-purpose benzene production through toluene was the next largest source Refinery Cracker Other On-purpose Source: ICIS Consulting www.icis.com 8
Benzene-Toluene Price Spread On-purpose benzene production depends on the price spread between benzene and toluene The spread has narrowed in the last year 2.70 2.50 2.30 2.10 1.90 1.70 1.50 Oct Nov Dec Recent price spike encourages on-purpose benzene Jan Feb Mar Apr May Jun Jul Aug Sep Benzene Toluene Source: ICIS Pricing www.icis.com 9
Millions of tonnes US Benzene Consumption vs Production Ethane cracking generates less benzene as coproduct Imports serve a vital role in the US benzene market Source: ICIS Consulting 9 6 3 0 73% 78% 84% 83% 85% 2014 2013 2012 2011 Total consumption Total production 140% 120% 100% 80% 60% 40% 20% 0% www.icis.com 10
US Benzene Overview Production Imports/Exports Consumption Summary www.icis.com 11
US Benzene Imports The US receives the majority of its benzene imports from South Korea All others 41% South Korea 22% Saudi Arabia 11% Brazil 8% Venezuela 18% Source: US ITC www.icis.com 12
Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Millions of litres US Benzene Imports - The US receives the majority of its benzene imports from South Korea Overall, imports in early were down from early 2014 Volumes from South Korea made up a larger percentage of total US imports in early 500 250 0 South Korea Venzuela Saudi Arabia Brazil All other sources Source: US ITC www.icis.com 13
US Benzene vs South Korea benzene spot prices 2.70 The spread between US and South Korea benzene prices has narrowed as petrochemical prices have declined, resulting in narrower and less frequent arbitrage windows in 2.50 2.30 2.10 1.90 1.70 1.50 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep US South Korea Source: ICIS Pricing www.icis.com 14
US Benzene Overview Production Imports/Exports Consumption Summary www.icis.com 15
US Benzene Consumption Ethylbenzene is mostly used to make styrene Cumene is nearly all consumed in phenol/acetone production Cyclohexane is primarily used in the nylon chain Ethylbenzene (Styrene) Nitrobenzenes Alkylbenzene Cyclohexane Source: ICIS Consulting Cumene (Phenol) www.icis.com 16
Downstream: North American Styrene Exports Source: ITC www.icis.com 17
Styrene and Ethylbenzene exports Source: ITC www.icis.com 18
US Benzene vs US Styrene Styrenebenzene spread narrowing as more SM plants resume production 60.00 50.00 40.00 30.00 20.00 10.00 0.00 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Benzene Styrene Source: ICIS Pricing www.icis.com 19
Styrene and Cumene Production Source: AFPM survey www.icis.com 20
US Benzene Overview Production Imports/Exports Consumption Summary www.icis.com 21
US Spot Benzene vs Contract Main impacts on benzene pricing: Imports/exports Styrene demand Crude oil prices Asia and Europe prices 2.75 2.50 2.25 2.00 1.75 1.50 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Spot Contract Source: ICIS Pricing www.icis.com 22
000s tonnes US Benzene Supply & Demand Annual growth of real consumption is forecast to average 1.2% through 2017, and 0.7% 2017-2025 Production is expected to increase by 4.5% by 2025 Source: ICIS Consulting 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2000 2005 2010 2011 2012 2013 2014 2017 2020 2025 Production Consumption Utilization 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% www.icis.com 23
US Benzene Overview Production Imports/Exports Consumption Summary US Toluene & Mixed Xylenes Overview of Toluene & Mixed Xylenes www.icis.com 24
US Toluene & Mixed Xylenes www.icis.com 25
US Toluene & Mixed Xylenes vs WTI 2.50 Toluene and MX spread vs WTI remain wide 2.00 1.50 MX and toluene prices have remained firm so far in Q4 on tight supply 1.00 0.50 0.00 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep WTI (Friday close) Toluene MX Source: ICIS Pricing www.icis.com 26
US Toluene & MX Consumption vs Production The US is a net importer of toluene For MX, the US is a net exporter Consumption 2,128 Production 1,896 Consumption 3,449 Production 3,385 Toluene 000s of tonnes MX Consumption Production Source: ICIS Consulting www.icis.com 27
US Toluene & MX trade balance 400 Net toluene imports rose in Net MX exports softer in 200 0-200 2014 2014-400 -600 Toluene 000s of tones MX Source: ICIS Consulting www.icis.com 28
US Gasoline production Strong gasoline production prevented a summer price spike in 10500 10000 9500 9000 8500 8000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2014 Source: EIA www.icis.com 29
US Toluene & MX consumption The largest chemical outlet in for toluene was benzene and for MX was PX TOLUENE CONSUMPTION Benzene/PX MX CONSUMPTION Paraxylene Misclaneous Phenol Orthoxylene Nitrotoluenes Solvent TDI Solvents Miscellaneous Source: ICIS Consulting www.icis.com 30
US Toluene vs downstream 2.90 Economics for benzene production have been unattractive most of 2.70 2.50 2.30 2.10 Economics for PX production have been unattractive for much of 1.90 1.70 1.50 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Benzene Toluene PX Source: ICIS Pricing www.icis.com 31
US MX vs downstream An explosion at an Asian aromatics facility shortened PX supply and widened the PX-MX spread in April and May 2.90 2.70 2.50 2.30 2.10 1.90 1.70 1.50 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep MX PX Source: ICIS Pricing www.icis.com 32
000s tonnes US Toluene Supply & Demand Annual growth of real consumption is forecast to average 1.3% through 2017 and 1.1% 2017-2025 Production is expected to increase by 11% by 2025 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 2000 2005 2010 2011 2012 2013 2014 2017 2020 2025 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Production Consumption Utilization Source: ICIS Consulting www.icis.com 33
000s tonnes US MX Supply & Demand Annual growth of real consumption is forecast to average 8.5% through 2017 and 3.1% 2017-2025 Production is expected to increase by 30% by 2025 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2000 2005 2010 2011 2012 2013 2014 2017 2020 2025 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Production Consumption Utilization Source: ICIS Consulting www.icis.com 34
Questions & Answers Contact Zachary Moore Markets Reporter, Americas Zachary.Moore@icis.com www.icis.com 35
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