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Asian Petrochemical Feedstocks To study the market demand and supply scenario (current and next twenty years) for the following petrochemical feedstocks.

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Presentation on theme: "Asian Petrochemical Feedstocks To study the market demand and supply scenario (current and next twenty years) for the following petrochemical feedstocks."— Presentation transcript:


2 Asian Petrochemical Feedstocks

3 To study the market demand and supply scenario (current and next twenty years) for the following petrochemical feedstocks and solvents in Indian, Asia Pacific and Asian Region –Ethylene –Propylene (both chemical and polymer grade) –Benzene, Toluene and Xylene –Isobutylene –Butene-2 –LAB feedstock –Hexane –Naphthalene –Coke Scope of the Study

4 Methodology Primary and Secondary Survey Past Trend Analysis to build a demand forecasting model

5 Presentation Outline Industry Overview –Ethylene, Propylene, BTX, Butylenes, LAB Feedstock, Hexane, Naphthalene, Coke Demand Determinants Asian Demand Projections –Ethylene, Propylene, BTX, Butylenes, LAB Feedstock, Hexane, Naphthalene, Coke Indian Demand Projections –Ethylene, Propylene, BTX, Butylenes, LAB Feedstock, Hexane, Naphthalene, Coke

6 Overview

7 Ethylene: where used?

8 Ethylene: Consumption Pattern

9 Feedstock Usage Japan: Naphtha Based Korea: Naphtha Based Taiwan: Naphtha Based ASEAN: Gas/Naphtha Based China: Naphtha/Gas oil Based India: Gas/Naphtha Based Middle East: Mainly Gas Based Middle East highly competitive on account of cheap gas. Other countries gas cost is relatively high. Naphtha based crackers have profitability pressures whenever crude prices harden

10 Asian Ethylene Consumption

11 Ethylene Capacity Buildup in Asia

12 Large Unfulfilled Demand in China Elsewhere in Asia, surplus in derivative capacity, and exports are mainly to China

13 Petrochemicals

14 Petrochemical Cyclicality

15 Middle East Cost Competitiveness

16 India Ethylene Key Issues Slowdown in domestic demand post commissioning of crackers Earlier there were Supply constraints, supply constrained demand got satisfied In India, high level of recycling, So demand is even more price linked Plastic processing industry uncompetitive and facing competitive pressures both in exports market and domestic. States of western India consume bulk of ethylene largely because of significant processing capacity in that location After commissioning of HPL and GAIL crackers, the capacity for plastic processing has increased in the northern and eastern India.

17 Indian Ethylene Demand

18 Indian Demand Capacity Trends

19 Statewise Ethylene Demand Based on location of plastic processing and textile industry and estimated consumption of ethylene in those industries.

20 Regionwise Demand and Share in GDP Imbalance on account of large capacity of plastic processing and textile in Western India. Significant amount of finished plastic and textile products exported to other regions.

21 Propylene: How Produced? Co produced with ethylene in a steam cracker. Negligible for ethane based cracker, higher for propane and for naphtha based cracker, nearly 50% of ethylene production Co produced with gasoline. Yield in a typical FCC unit 2-4%, In two high olefinic modes, propylene yield can be 10% (as in Reliance) and 20% (deep catalytic cracking as in one of Thailand units and some plants in China) Propane Dehydrogenation. Highly Capital intensive, Can be a good source with cheap propane which can be available from countries with high quantites of wet natural gas Metathesis. Low Capital Intensity. Uses ethylene and butylene-2 as raw material. Can be effective if ethylene prices are low. Methanol to olefins: Moderately capital intensive. Requires cheaply available methanol

22 Propylene: How Consumed?

23 Asian Propylene Demand Supply

24 Key Asian Propylene Producers

25 Asian Propylene Production

26 Asian Chemical Grade Enduse Consumption

27 Polymer Grade

28 China Polymer Grade

29 China Chemical Grade

30 Ethylene to Propylene Prices Fast demand growth for polypropylene More importantly, little co product production in Middle East gas based crackers So, profitability for naphtha based crackers higher in propylene

31 Propylene Production

32 Indian Demand

33 Chemical Grade Demand Supply

34 Chemical Grade Derivative Demand

35 Regionwise Propylene Demand

36 Benzene: Where Used?

37 Paraxylene: Where used? PX used to produce both PTA and DMT PX demand derived from polyester Polyester used in textiles as fibres; in plastics (PET bottles), films (various uses) and other products. Largest use is in fibres, PET bottles hold significant demand in the developed country PX more important than Benzene in Asia primarily because of large textile industry in Asia

38 Other BTX Orthoxylene primarily used in production of pthalic anhydride Toluene used in tolylene di isocyanate, solvents and various chemicals

39 Asian BTX Capacity

40 Paraxylene

41 Benzene

42 BTX Prices


44 Indian Benzene Supply/Consumption While some production is being exported, there are significant derivative imports

45 Indian Benzene Derivative Demand

46 Paraxylene

47 Statewise BTX Demand

48 C4 Utilisation

49 IsoButylenes: Where used?

50 Isobutene: Technology Driven End Products Technology for butyl rubber available with few and not easily shared High Purity Polyisobutylene technology also difficult MMA technology from isobutylene also difficult + risk of new technology getting developed

51 Large Production of Isobutene compared to non-fuel use As against a net chemical demand of less than 1 million tonne, Asian isobutylene capacity was estimated to be higher than 5 million tonnes in A significant portion of the isobutylene production in Asia is converted to Methyl Tertiary Butyl Ether (a high octane gasoline blending component). Further, it can directly be blended with either gasoline or LPG.

52 Butyl Rubber-Largest Chemical Use Used in tubes and tubeless tyres Butyl rubber  estimated demand for isobutylene is close to 0.33 mn tonne in Asian region. Only two capacities in Asia. One owned by Japan Butyl rubber and second by Sinopec Beijing Yanhua. A bulk of this demand is actually met by imports from Canada and Russia. With rising production of tubes and tubeless tyres in the region, the demand for butyl rubber has increased significantly.

53 Asian Butyl Rubber Consumption

54 Indian Isobutylene Demand Supply Bulk of production for fuel blending purposes Entire butyl rubber and high purity polyisobutylene imported. Co polyisobutylene/chemicals produced in India.

55 Butene- 2 Where used? No significant chemical use of pure butene -2 n butenes (butene 1 + butene 2) are used to produce sec butyl alcohol used to produce methyl ethyl ketone

56 Asian Methyl Ethyl Ketone Cnsumption Metathesis units yet to start on commercial scale in Asia

57 Asian n Paraffin Consumption

58 N Paraffin Consumption Trends

59 N Paraffins: Where used? The predominant use of n paraffins is in manufacture of linear alkyl benzene. More than 85% of n paraffins worldwide are used for production of linear alkyl benzene. The other uses of n paraffins include production of –High grade alcohol, –chlorinated paraffin, –nitro-alkanes and amines, –Sulphoxidation or sulphochlorination for surfactant or plasticiser manufacture, –Raw material for microbiological oxidation or fermentation process and –direct use as a solvent in many applications.

60 N paraffin Prices The prices of n paraffin are dependent on the prices of kerosene, which, in turn, are dependent on the prices of crude oil. With the return stream of n paraffin extraction plant (about 80% of original stream) being thus valued at much lower value, the prices of n paraffin would be equal to differential between two kerosene streams applied to n paraffin plus the cost of volume of n paraffins plus other costs and are thus, significantly higher than the prices of kerosene (differentials are around US$ per MT). Over the last ten years, there has been an increase in merchant sales of n- paraffins to new LAB plants in the developing world. At the same time, supplies of traditional feedstocks that are rich in n-paraffin have declined. The production of normal paraffins is influenced by the availability of n-paraffin-rich kerosene at the n-paraffin producing facilities. This has been in relatively short supply, compared to previous years, contributing to the tight market situation and high prices of n paraffins. New Fischer-Tropsch units designed to meet the growing demand for low-sulfur fuels are expected to provide new supplies of coproduct paraffins, possibly in large quantities, bringing much respite for standalone producer.

61 Hexane Key Issues 90% of demand arises from edible oil sector wherein its low cost and high level of usefulness lead to its domination Out of total solvent demand, edible oil extraction is about 2% of the demand in a mature market. Health concerns over Hexane on account of its established linkage with inducing neuropathy if consumed in significant quantities. On a health hazard spectrum of n-Hexane registers 1.3. Most exposure cases reported at worksites and related to inhalation

62 Solvent Extraction

63 Indian Hexane Consumption

64 Why is consumption declining? Oilseeds availability in India is uncertain and inadequate Therefore, Crude edible oil getting increasingly imported in India to meet growing demand Edible oil extractors have been inefficient in using hexane as solvent and with improving efficiency levels, their per unit hexane consumption has been declining On an average, extractors in the US& EU consume less than 20% of Indian per unit hexane consumption in edible oil sector

65 Statewise Demand

66 Asian Hexane Demand Supply Asian production of hexane assuming a 5% of gasoline as hexane production would be close to 7.5 million tonne Required extraction for edible oil sector is only around 0.6 million tonnes. Extraction capacities in India, China, Malaysia, Indonesia

67 Naphthalene Can be produced from Met- coke/Refineries Used in manufacture of PAN; Construction; Textiles Asian region – Potential Supply position is over 5 times the demand. Major deterrent for capacity addition. Naphthalene content in crude around 0.5 to 2% so a 10 million tonne refinery would have 100,000 tonne production

68 Naphthalene

69 Asian Naphthalene production from coal

70 Statewise Naphthalene Demand (0.35 million tonnes)

71 Coke Two major grades – Calcined and non-calcined Calcined coke commands price premium Power Generation, Cement, Aluminium – major industries Strong volatility in product demand Japan – Leading consumer India, China – Surplus situation

72 Asian Petcoke Capacity

73 Demand Determinants

74 Ethylene Projections: Demand Determinants

75 Propylene (chemical grade) Projections: Demand Determinants

76 Propylene (polymer grade) Projections: Demand Determinants

77 BTX Projections: Demand Determinants

78 Iso Butylene: Demand Determinants

79 Cis / Trans Butene 2: Demand Determinants

80 LAB Feedstock: Demand Determinants

81 Hexane: Demand Determinants Hexane consumption linked to growth in edible oil extraction through solvent extraction processes With import of edible oil, this may not be linked to GDP growth Also, efficiency of solvent extraction process in India and other Asian countries is on the rise on account of inefficient facilities.

82 Naphthalene: Demand Determinants

83 Coke: Demand Determinants

84 Polymer Industry linked to GDP Growth

85 Per Capita Income Vs Polymer Consumption

86 Plastic Processing Industry Exports

87 SSI Reservation limits Indian Downstream Plastic Processing Sector

88 Textile Industry linked to GDP Growth Industry Overview

89 Agreement on Textile & Clothing Agreement on Textile and Clothing has given way to application of WTO framework on international textile trade For the first time in last four decades, free textile trade to take place Increase in export market for developing countries as also increase in competition Although China, can expand its share at the cost of others single handedly, however, developed world unlikely to have single supplier. In addition, China joined WTO late and so developed countries have an option of imposing restrictions of Chinese growth

90 Asia Becoming a Manufacturing Base to Supply to World

91 PPP Per Capita GDP 1993

92 PPP Per capita GDP 2003

93 Rising Economic Development in China, Increasing Development in China in comparison to other Countries

94 China Export Led Growth

95 High Exports in Labour Intensive Industries

96 Feedstock Situation Middle East has large gas reserves Oil demand set to rise on account of increasing development Oil trade likely to increase as more demand increases in India and China wherein crude production not increasing sufficiently. FSU/Middle East to be the main suppliers to meet increase in demand Middle East needs to increase oil capacity in case it plans to meet this demand. In past, whenever, Middle East capacity utilisation has been high, prices have gone high. However, even availability of reserves in Middle East is an issue. Saudi Arabia not able to increase production. Reserves not updated. Oil prices and consequently naphtha prices to remain high.

97 Further Increase in Middle East Capacity

98 China Vs India Petrochem

99 Asian Demand Projections

100 Asian Ethylene


102 Asian Propylene (chemical grade)

103 Asian Chemical Grade Propylene

104 Asian Propylene (polymer grade)

105 Asian Benzene


107 Asian Paraxylene


109 Asian BTX

110 Asian Isobutylene


112 Asian Iso Butylene from MMA

113 Asian N Butene Demand from MEK

114 Asian Butene -2 Demand from Metathesis

115 Asian LAB Feedstock

116 Asian Hexane

117 Asian Naphthalene

118 Asian Coke

119 India: Demand Projections

120 India: Ethylene

121 India: Propylene Chemical Grade

122 India: Propylene

123 India: Benzene

124 India: Paraxylene

125 India: BTX

126 Indian Isobutylene

127 India: n Butene

128 India: Hexane

129 India: N paraffins

130 India Naphthalene

131 India: Coke

132 Statewise GDP Growth

133 Statewise Demand 2023 Statewise Demand based on GDP growth

134 India: Critical Issues When would SSI dereservation take place? How India competes in international textile post WTO accession?

135 Summary/Conclusions

136 Summary/Conclusions

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