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    CMAI - Paul Blanchard - Nylon ABS Review 5.12

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    - Nylon & ABS markets were overviewed, with discussions of key feedstock markets like benzene, adiponitrile, and butadiene that are impacting prices due to tight supply. - For nylon 6, tightening supply/demand is pushing prices up as Asian demand grows and new investments provide only limited new supply. Nylon 6,6 faces constraints from limited adiponitrile supply. - ABS prices were supported by high raw material costs but some relief is coming as new Asian capacity absorbs demand and allows increased low-cost imports to the US and Europe.

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    CMAI - Paul Blanchard - Nylon ABS Review 5.12

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    tiwarivivek2
    380 views42 pages
    - Nylon & ABS markets were overviewed, with discussions of key feedstock markets like benzene, adiponitrile, and butadiene that are impacting prices due to tight supply. - For nylon 6, tightening supply/demand is pushing prices up as Asian demand grows and new investments provide only limited new supply. Nylon 6,6 faces constraints from limited adiponitrile supply. - ABS prices were supported by high raw material costs but some relief is coming as new Asian capacity absorbs demand and allows increased low-cost imports to the US and Europe.

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    - Nylon & ABS markets were overviewed, with discussions of key feedstock markets like benzene, adiponitrile, and butadiene that are impacting prices due to tight supply. - For nylon 6, tightening supply/demand is pushing prices up as Asian demand grows and new investments provide only limited new supply. Nylon 6,6 faces constraints from limited adiponitrile supply. - ABS prices were supported by high raw material costs but some relief is coming as new Asian capacity absorbs demand and allows increased low-cost imports to the US and Europe.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    380 views42 pages

    CMAI - Paul Blanchard - Nylon ABS Review 5.12

    Uploaded by

    tiwarivivek2
    - Nylon & ABS markets were overviewed, with discussions of key feedstock markets like benzene, adiponitrile, and butadiene that are impacting prices due to tight supply. - For nylon 6, tightening supply/demand is pushing prices up as Asian demand grows and new investments provide only limited new supply. Nylon 6,6 faces constraints from limited adiponitrile supply. - ABS prices were supported by high raw material costs but some relief is coming as new Asian capacity absorbs demand and allows increased low-cost imports to the US and Europe.

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    Download as PDF, TXT or read online from Scribd
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    of 42

    Nylon & ABS Market Overview

    Paul Blanchard
    Director Engineering Resins North America

    has acquired

    Motor Vehicle Metal & Resins Conference Troy, MI May 12, 2011
    Shanghai Houston New York London Dsseldorf Dubai

    Singapore

    CMAI - A Global Organization Of Over 180 Full -Time Associates

    New York HOUSTON

    Dusseldorf LONDON Dubai Shanghai Bangkok (2011) SINGAPORE

    IHS Who We Are


    We are 5,500 people, in 30 countries, speaking 50 languages all working each day to:
    Serve businesses and all levels of governments worldwide Ranging from 80% of Global Fortune 500 to small businesses Customers in 180 countries Provide comprehensive content, software and expert analysis and forecasts Customers around the world use our products and services to make faster and more confident decisions. Advancing Decisions that Advance the World

    CMAI is the premier provider of consulting services to the petrochemical and related downstream industries.

    Market Advisory Services


    Continuous industry analysis on a multi-client basis multi Access to leading industry experts Daily, weekly, monthly and annual industry reports

    Business Advisory Services


    Single-client, tailored analyses Single Assist clients with strategic and commercial decisions Support major capital investments and transactions Customized market and competitive analyses Assist clients with legal issues

    Planning Advisory Services


    Enhanced cost analysis and price forecasting Capacity, trade and S/D analysis and forecast Competitive cost studies Training Economy/scenario forecasting Company analysis

    Nylon Chain Overview


    Nylon 6 and 6,6
    Feedstock impact Supply / demand effects Price and margin outlook

    In the beginning
    Nylons first application was in fibers Fibers continue to be nylons largest market

    2010 Global Nylon Demand


    Staple Fiber 2% BCF 9% Engineering Resin (ETP) 41% Textile Filament Yarn 33%
    ETP PA 6 1.4 M Tons PA 6,6 1.0 M Tons

    Total Fiber PA 6 2.8 M Tons PA 6,6 0.6 M Tons

    Industrial Filament Yarn 15%

    2010 Demand = 5.8 Million Metric Tons

    Global Nylon Resin Trade


    Million Metric Tons 1.0 Net Exports 0.8 0.6 0.4 0.2 0.0 -0.2 -0.4 -0.6 -0.8 Net Imports -1.0 2005 2006 N. America CIS & Baltics NE Asia

    2007

    2008 W. Europe Middle East

    2009

    2010

    S. America Africa SE Asia

    C. Europe Indian Subc.

    Global Nylon ETP Demand


    Industrial/ Industrial/ Machinery 13% Consumer 10% Wire and Cable 1% Other 6% Automotive and Truck 35%

    Film and Coating 16% Appliances 8%

    Electrical and Electronic 11%

    2010 Demand = 2.4 Million Metric Tons

    Nylon 6

    Nylon 6 Chain Overview


    Benzene Cyclohexane Caprolactam Nylon 6

    Benzene Cumene Propylene BASF, DSM, UBE, CPDC, Baling PC, Mitsubishi Phenol Cyclohexanone

    Nylon 6 Producers:

    Honeywell

    Cents Per Pound 100 80 60 40 20 0 -20 -40 JanJan-09 Jul-09 Jul-

    Caprolactam Economics North America


    Forecast

    Jan-10 JanJul-10 JulJan-11 JanJul-11 JulJan-12 JanCyclohexane Contribution Hydrogen Contribution Ammonia Contribution Ammonium Sulfate Credit Sulfuric Acid Contribution Net of Ammonia,Sulfur and Ammonium Sulfate Caprolactam Total Cash Cost

    Jul-12 Jul-

    North America Nylon 6 Resin Cash Cost and ETP Market Price Cents Per Pound
    180 160 140 120 100 80 60 40 20 0 -20 JanJan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 JulJanJulJanJulJanJulJanJulNylon 6 Cash Cost Nylon 6 Pre-tax Margin PreN6 Market Price
    ~

    Forecast

    World
    Nylon 6 Resin Supply & Demand
    Million Metric Tons 6.0 5.0 4.0 3.0 2.0 1.0 0.0 Operating Rate 100% Forecast 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Fiber Demand Global Caprolactam Operating Rate

    Engineering Plastic Demand Operating Rate,%

    Nylon 6 ETP Prices Converging


    Dollars Per Metric Ton 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 JanJan-08 Aug-08 Mar-09 Oct-09 May-10 Dec-10 Jul-11 Feb-12 Sep-12 AugMarOctMayDecJulFebSepNAM Market Price WEP Market Price NEA Market Price Forecast

    Nylon 6 Summary
    Nylon 6 growth in Asia ETP and fiber tightening supply/demand balance for resin and caprolactam
    Planned investments will provide supply assurance but prices will move upward

    Additives impact compounds

    Nylon 6,6

    Nylon 6,6 Chain Overview


    Benzene Cyclohexane Adipic Acid Nylon 6,6 Crude C4 Butadiene Adiponitrile HMDA

    Propylene Acrylonitrile Ammonia Invista, Rhodia DuPont, Shenma Ascend Asahi

    Nylon 6,6 Producers:

    Adiponitrile Limits
    Butachimie 32%

    Invista 45% Ascend 18% Asahi Kasei 5% ADN Capacity = 1.6 Million Metric Tons

    Butadiene Shortage Continues to Get Worse BD vs Ethylene Percent


    6.0 5.5 5.0 4.5 4.0 3.5 3.0 10 Q2 Q3 Q4 11 Q2 Q3 Q4 12 Q2 Q3 Q4

    Global Demand for Nylon 6,6 Resin


    Million Metric Tons 3 2 2 1 1 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Nylon 6,6 ETP Demand Nylon 6,6 Fiber Demand Capacity Operating Rate Operating Rate, Percent 100 90 80 70 60 50 40 30 20 10 0

    North America Nylon 6,6 Resin Cash Cost And Market Price
    Cents Per Pound 200 180 160 140 120 100 80 60 40 20 0 JanJan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 JulJanJulJanJulJanJulJanJulNylon 6,6 Cash Cost Nylon 6,6 Margin N66 Market Price
    ~

    (Non-Integrated Producer) Forecast

    Regional Nylon 6,6 Engineering Resin Market Prices


    Dollars Per Metric Ton 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 JanJan-08 Aug-08 Mar-09 Oct-09 May-10 Dec-10 Jul-11 Feb-12 Sep-12 AugMarOctMayDecJulFebSepNAM Market Price WEP Market Price NEA Market Price Forecast

    Nylon 6,6 Summary


    Nylon 6,6 upstream intermediates face constrained supply of adiponitrile that supports price levels
    New capacity in 2014 will be just in time

    Additives impact compounds

    ABS

    World ABS Demand


    Transportation 12% Building & Const. 6% Electronics/ Electrical 25%

    Other (Medical, Toys, Rec.) 12% Alloys 4% Appliance 41%

    2010 ABS Demand - 7.3 Million Metric Tons

    ABS Chain
    Benzene Ethyl Benzene Ethylene Butadiene / PBR ABS Resin

    Styrene

    Crude C4 Propylene

    Acrylonitrile

    Global Benzene Prices Very High


    Cents Per Gallon 500 450 400 350 300 250 200 150 100 50 0 JanJan-07 Jan-08 JanDelta Jan-09 JanJan-10 JanJan-11 JanJan-12 JanNaphtha cif Dollars Per Metric Ton 1,600 1,400 1,200 1,000 800 600 400 200 0 Benzene Spot

    Global Styrene Improving From Low Rates Million Metric Tons Operating Rate
    40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 0.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Demand Total Capacity Operating Rate Forecast 100% 95% 90% 85% 80% 75% 70% 65% 60%

    Butadiene Shortage Continues to Get Worse Percent


    6.0 Forecast 5.5 5.0 4.5 4.0 3.5 3.0 10 Q2 Q3 Q4 11 Q2 Q3 Q4 12 Q2 Q3 Q4

    Butadiene Price Forecast


    S. Korea, West Europe, and the United States
    Dollars Per Metric Ton 3858 3307 2756 2205 1653 1102 551 0 08 May Sep 09 May Sep 10 May Sep 11 May Sep 12 May Sep Spot Korea, FOB Contract WEP, CIF Contract USA, FOB Cents Per Pound 175 Forecast 150 125 100 75 50 25 0

    Regional Acrylonitrile Price Differences Dollars Per Metric Ton


    3,000 2,500 2,000 1,500 1,000 500 0 JanJan-08

    Oct-08 Oct-

    Jul-09 Jul-

    Apr-10 Apr-

    Jan-11 Jan-

    Oct-11 Oct-

    Jul-12 Jul-

    North America Acrylonitrile Price

    Northeast Asia Acrylonitrile Price

    ABS Demand Split By Region


    Southeast Asia 6% Europe 10% Africa/ Africa/ Middle East 3% Northeast Asia 68% North America 9% South America 1% CIS & Baltics 1% Indian Subc. 2%

    2010 Global Demand - 7.3 Million Metric Tons

    World ABS Producers


    Southeast Asia 7% North America 8% Europe/CIS 10% Africa/ Africa/ Middle East/ East/ Indian Subcontinent 3%
    SHARE OWNER Chi Mei LG Group Formosa Group BASF SE Ineos Samsung Group Toray SABIC Dow Grand Pacific CNPC JSR Kumho Group SINOPEC % OF TOTAL 17.2% 17.2% 12.2% 8.0% 7.8% 6.8% 5.0% 4.9% 4.5% 3.7% 3.6% 3.4% 2.6% 2.4% 2.3% 15.4%

    Northeast Asia 72%

    2010 Global ABS Capacity = 8.6 Million Metric Tons

    28 Others

    World ABS Trade Forecast


    Million Metric Tons 1.0 0.8 0.6 0.4 0.2 0.0 -0.2 -0.4 -0.6 -0.8 -1.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 North America CIS & Baltics NE Asia South America Africa/Middle East SE Asia Europe Indian Subc. Net Imports Net Exports Forecast

    Huge ABS Capacity Additions In 2013 Thousand Metric Tons


    1,200 1,000 800 600 400 200 0 2010 Northeast Asia West Europe 2011 2012 2013 2014 Middle East 2015 CIS & Baltic States Southeast Asia

    ABS Operating Rates Stable


    Million Metric Tons 12.0 10.0 8.0 6.0 4.0 2.0 0.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Domestic Demand Total Capacity Operating Rate Operating Rate 100% 90% 80% 70% 60% 50% 40%

    Some Relief For ABS Prices


    Cents Per Pound 160 140 120 100 80 60 40 20 0 JanJan-09 Jul-09 JulJan-10 JanStyrene Contribution Butadiene GP ABS Market Price Jul-10 JulJan-11 JanJul-11 JulAcrylonitrile Contribution Conversion Costs (Var. + Fixed) PrePre-tax margin
    ~

    Dollars Per Metric Ton 3500 Forecast 3000 2500 2000 1500 1000 500 0

    United States ABS Prices & Imports From Asia


    Cents Per Pound 180 160 140 120 100 80 60 40 20 0 Imports, Thousand Tons 10 9 8 7 6 5 4 3 2 1

    -20 0 Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- JanJan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Imports Market Price Landed Spot Price Delta (Market Minus Spot)

    Regional ABS Prices


    Dollars Per Metric Ton 4,000 Forecast 3,500 3,000 2,500 2,000 1,500 1,000 500 JanJan-08

    Oct-08 Oct-

    Jul-09 Jul-

    Apr-10 Apr-

    Jan-11 Jan-

    Oct-11 Oct-

    Jul-12 JulAsia Spot

    NAM Price Contract

    WEP Price Contract

    ABS Summary
    ABS market pressure from rising raw material costs is easing in North America New Asian capacity being quickly absorbed but arbitrage window between Asia and US now open Expect increased ABS imports from Asia to limit further price increases

    Thank You

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