Hydrocarbon Resins. The Origin of the Species. Copyright 2016 Argus Media Ltd. All rights reserved.

Transcription

1 Hydrocarbon Resins The Origin of the Species

2 Argus Media: global, market-focused, independent World s largest independently held energy PRA 750 staff, 23 countries Publish > 8,000 daily commodity price assessments + energy market intelligence Argus DeWitt C5 Hydrocarbon Resin Report Established in 1980s The only global report of the kind Indexation examples US refined products (incl. VGO) Global crude oil Recent acquisitions DeWitt, JJ&A (Petrochemicals) FMB (Fertilizers) Metalprices.com, Metal Pages (Metals) Services Price reporting & indexation Conferences & Events Consulting

3 C5 and Hydrocarbon Resins Newsletter Provides essential information on supply and demand fundamentals, trade flows and industry news of global C5 monomers and polymers, as well as complementary and competitive products. Markets Covered Resin formers, isoprene monomer and polyisoprene, DCPD, piperylenes, tackifying resins, crude oil, natural gas, ethylene and polyethylene, EVA and polypropylene, butadiene and SBR Key Features Market and price analysis, including overview of the Asia Pacific, Europe and North American markets Market moving news US trade data for pertinent categories Value-Added Indispensable resource for marketers and consumers of C5 monomers, polymers, as well as downstream users of articles manufactured with C5 derivatives.

4 Why Hydrocarbon Resins?

5 The Rosin and HCR competitive space Inks Rosin Tapes Roadmarking Hydrocarbon Resins Labels Rosin/HCR Hybrids Hot Melt Adhesives Pulls on hydrocarbon and natural resins create price/supply dynamics Some applications very flexible, others much less Some markets have significantly higher affordability

6 Hydrocarbon Resins vs Rosin Resins Monomers Polymers/HCR Resins End-use Markets C5 Piperylenes (PIPs) C5 HCR Tapes & Labels Road marking Rosin Opportunity C9 Monomers C9 Aromatic HCR Packaging Inks Road marking Rosin Opportunity DCPD C9 Mixed C5 s Hydrogenated HCR Non-wovens Packaging Polymod Possible Rosin Opportunity

7 Upstream Petrochemical Drivers

8 Barrel of Oil 7% Naphtha Gas Oil 93% Motor Gasoline, Lubes and Heating Fuels 70% Ethylene Propylene Butadiene Commodities Plastics Rubber Products 80% Specialty Products Plastics, Rubber Products 30% (2.1%) Benzene Toluene Xylene C9 ARO, CC5 Intermediates Isoprene DCPD Piperylenes Styrene VAM Isocyanates Acrylates Polyols 20% (0.4%) Specialty Raw Materials C5, C9 and DCPD resins, BCP, EVA

9 It Is All Relative Tackifying Resins Isoprene and all hydrocarbon tackifying resins are roughly 1.3mn tons each, or roughly 100 times less than ethylene market.

10 Byproducts of the Ethylene Cracking Process Ethylene Gas Feed Liquid Feed Steam Cracking Process Propylene Benzene Butadiene Isoprene Drive Cracking Slate Byproducts of Ethylene Production utilizing Liquid Feeds Cyclopentadiene Critical to Resins, Inks, BCP s Aromatics

11 Feed Pathway Ethylene Cracker Crude C5 s DCPD Unsaturated Polyester Resin Hydrogenated Waterwhite Tackifers Ink Resins C9 Aromatic Resin Oil Can only get tackifier resin feeds from Naphtha and gas oil Piperylenes C5 Tackifier Resins Hydrogenated Tackifers; Ink Resins; C9 Resins Isoprene is the key driver for recovery of Crude C5 stream Isoprene SIS Polyisoprene Rubber Supply Chain is Dependent on Ethylene Feeds for Crude Streams (C9 ARO or CC5)

12 N. America Ethylene Cash Costs /lb Gas feeds are much more economically attractive for production of ethylene

13 Cracking Slate Trend Ethylene cracking slate continues to lighten up, leading to a shortage of heavier molecules in the US.

14 C5 Demand Drivers Natural Rubber (NR) 12 MT Isoprene Rubber (IR) <1 MT Isoprene (IPM) +1MT Coproducts of IPM Piperylenes (PIPs) DCPD (DCPD) NR and IR are generally said to be analogs, so IR demand is directly affected by NR market IPM also goes into making of SIS, but volume is small and low growth not a factor Crude C5 Feedstream

15 It Is All Relative Rubber Demand Synthetic rubber (SR) growth has a higher growth potential SR growth driven by performance attributes Isoprene rubber, a synthetic rubber, is a small proportion of entire SR demand, <1M tons out of ~14.5M tons in 2015

16 Isoprene Monomer Prices Isoprene monomer requires further costly processing to be converted to polyisoprene rubber. Cannot compete with natural rubber which is used as is.

17 Isoprene (and DCPD and PIPs) Capacity Overbuild kt/yr China overbuilds IPM/IR Capacity kt/yr Asia (mostly China) Korea Started up new 25 kta unit Q with another ready in Q kt/yr Braskem considers stopping IPM production in 2016 Taiwan Adds 60 kta IPM Capacity in 2015

18 C5 Global Supply Positive/Negative GROSS OVERSUPPLY against POOR DEMAND 1Q2016 2Q2015 3Q2015 4Q2016 Trade Flows Asia ROTW

19 London Houston Washington New York Portland Calgary Santiago Bogota Rio de Janeiro Singapore Beijing Tokyo Sydney Dubai Moscow Astana Kiev Porto Johannesburg Riga

20 THANK YOU! Vitaly Rogachevsky Vice President C5 Monomers and Polymers Phone: Office: Web: Houston Copyright notice All intellectual property rights in this presentation and the information herein are the exclusive property of Argus and and/or its licensors and may only be used under licence from Argus. Without limiting the foregoing, by reading this presentation you agree that you will not copy or reproduce any part of its contents (including, but not limited to, single prices or any other individual items of data) in any form or for any purpose whatsoever without the prior written consent of Argus. Trademark notice ARGUS, ARGUS MEDIA, the ARGUS logo, DEWITT, FMB, FUNDALYTICS, METAL-PAGES, JIM JORDAN & ASSOCIATES, JJ&A, ARGUS publication titles and ARGUS index names are trademarks of Argus Media Limited. Disclaimer All data and other information presented (the Data ) are provided on an as is basis. Argus makes no warranties, express or implied, as to the accuracy, adequacy, timeliness, or completeness of the Data or fitness for any particular purpose. Argus shall not be liable for any loss or damage arising from any party s reliance on the Data and disclaims any and all liability related to or arising out of use of the Data to the full extent permissible by law.