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Maleic Anhydride Chain - World Market Overview

(Anna) Zhao Na

Chemicals Committee Meeting at APIC 2015

Seoul, 8 May 2015

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• Feedstock Butane & Benzene Price Trends vs. Crude Oil

• Butane and Benzene – Based Production Economics

• Overview of World Supply & Demand Conditions

• UPR and Other Applications

• Conclusions

Source: Tecnon OrbiChem

APIC 2015

AGENDA

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0

20

40

60

80

100

120

140

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

$/bbl

Source: US EIA

APIC 2015

WTI & BRENT CRUDE OIL PRICES 2005-2016(US EIA Short Term Forecast)

WTI

Brent

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0

200

400

600

800

1,000

1,200

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

$/ton

APIC 2015

US N-BUTANES & CRUDE OIL PRICES

US n-Butanes

Brent Crude

WTI Crude


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300

400

500

600

700

800

900

1,000

1,100

30 40 50 60 70 80 90 100 110 120 130 140

N-Butanes ($/ton)

APIC 2015

US N-BUTANES vs WTI CRUDE OIL PRICES


WTI ($/bbl)

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APIC 2015

UNITED STATES MALEIC ANHYDRIDE MARGINOVER 1.10 x BUTANE

0

500

1,000

1,500

2,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Margin over1.10 x Butane

US MaleicAnhydride

1.10 x USButane


$/ton

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APIC 2015

CHINA MALEIC ANHYDRIDE MARGINOVER 1.15 x BENZENE

-100

200

500

800

1,100

1,400

1,700

2,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

$/ton


Margin over1.15 x China CoalBenzene

ChinaMaleicAnhydride

1.15 x ChinaCoal Benzene

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APIC 2015

CHINA MALEIC ANHYDRIDE MARGINOVER 1.14 x BUTANE

0

400

800

1,200

1,600

2,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

$/ton

Margin over1.14 x Butane

ChinaMaleicAnhydride

1.14 x AsiaButane


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0

500

1,000

1,500

2,000

2,500

3,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

North America

South America

West Europe

East Europe

ME & Africa

S & SE Asia

Northeast Asia

China

World Capacity

1,000 Metric Tons


Production | Consumption

APIC 2015

WORLD MALEIC ANHYDRIDESUPPLY & DEMAND BY REGION

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0

1,000

2,000

3,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

1,000 Metric Tons


North America

South America

West Europe

East Europe

ME & Africa

S & SE Asia

Northeast Asia

China

APIC 2015

WORLD MALEIC ANHYDRIDE CAPACITY BY REGION

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0

100

200

300

400

500

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

1,000 Metric Tons


Production

Consumption

Capacity

APIC 2015

NORTH AMERICA MALEIC ANHYDRIDESUPPLY & DEMAND

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0

100

200

300

400

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

1,000 Metric Tons


Production

Consumption

Capacity

APIC 2015

WEST EUROPE MALEIC ANHYDRIDESUPPLY & DEMAND

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0

500

1,000

1,500

2,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

1,000 Metric Tons


Production

Consumption

Capacity

APIC 2015CHINA MALEIC ANHYDRIDE SUPPLY & DEMAND

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0

500

1,000

1,500

2,000

2010 2012 2014 2016 2018 2020

BenzeneButaneFeedstock


APIC 2015

CHINA BUTANE BASED MALEIC ANHYDRIDECAPACITY GROWTH & NEW PLANTS

1,000 Metric Tons

93%

7%

57%

43%

2010 2016

Producer Capacity (ktpa)

Start-Up Date

Zhuhai Unicizers (UPC) 30 Apr 2013

Zibo Qixiang Tengda 100 Nov 2013

Ningbo Jiangning 80 End 2013

Puyang Shengyuan 50 Aug 2014

Shandong Huifeng 50 Dec 2014

Dongying Qifa 30 Mar 2014

Dongyin Kede 30 Aug 2014

Shandong Yongshunda 30 Nov 2014

Yizheng Chemical Fibre 100 Mid 2015

Shandong Chenxi 50 H2 2015

Jiangsu Yabang 60 H1 2016

Panjin Union (UPC) 80 End 2015

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APIC 2015TOP 10 MALEIC ANHYDRIDE PRODUCERS 2015

Company Location Capacity (ktpa)

% of Total

Huntsman Corporation United States 154 5.5

Jiangsu Yabang Group China 150 5.4Bohai Chemicals China 140 5.0Sasol/Huntsman Germany 105 3.8Polynt Italy 101 3.6Shanxi Tayiuan Qiaoyou Chemicals China 100 3.6

Zibo Qixiang Tengda Chemical Co. China 100 3.6

Ningbo Jiangning Chemical China 80 2.9

Shandong Hongxin Chemical Industry Co. China 76 2.7Lanxess United States 73 2.6Total Capacity of Top 10 1,079 38.5Total Capacity World 2,800


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-80

-60

-40

-20

0

20

40

60

80

100

1,000 Metric Tons


S &

S E A s i a

E E ur o p

e

W

E ur o p e

NAm er i c a

S A

m er i c a

ME &

Af r i c a

NE A s i a

C h i n a

2011

2010

2012

2014

2013

APIC 2015

WORLD MALEIC ANHYDRIDE NET TRADE2010 - 2014

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0

200

400

600

800

2 0 1 0

2 0 1 4

2 0 1 0

2 0 1 4

2 0 1 0

2 0 1 4

2 0 1 0

2 0 1 4

2 0 1 0

2 0 1 4

2 0 1 0

2 0 1 4

2 0 1 0

2 0 1 4

2 0 1 0

2 0 1 4

Others

BDO

UPR


North America

South America

WestEurope

EastEurope

ME & Africa

S & SE Asia

NE Asia

China

APIC 2015

WORLD PURE MALEIC ANHYDRIDE APPLICATIONBY REGION 2010 & 20141,000 Metric Tons

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• UPR squeezed by feedstocks with very volatile pricing

o Styrene is the biggest component (at more than 35%) of UPR and morevolatile than maleic

• Demand should be stimulated by lower prices anda pick-up in downstream applications including:

o Pipe (construction), Marine

o Wind Energy, Automotive

• UPR still faces challenges:o In Europe & US due to environmental concerns – over styrene in

particular.

o In Asia from oversupply - Chinese UPR capacity ran at 50% in 2014 butdemand growth slows down further

• Bio-based UPR is a long way off but opportunities exist in styrene-free UPRand other initiatives.


APIC 2015

UPR MARKET

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APIC 2015

EUROPEAN ORTHOPHTHALIC RESINCOST OF RAW MATERIAL 2004-2015

0

300

600

900

1,200

1,500

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

€/ton


Product Location Definition Factor

Monopropylene Glycol West Europe Industrial Grade Contract DDP 0.27Phthalic Anhydride West Europe Domestic Molten DDP 0.25

Composite West EuropeStyrene West Europe Contract Barges ARA FOB 0.34

Maleic Anhydride West Europe Molten Contract Price DDP 0.14

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Tanks &Pipes18% Building

21%

Marine9%

Transport14%Artificial

Marble

15%

Gelcoats7%

Others

8%

Electrical8%

APIC 2015

UPR MARKET SEGMENTATION

Source: Cefic European UP/VE Resin Association; Chinese Society for Composite Materials

Infrastructure39%

Marine3%

Others11%

Transport5%

Architecture&

Structure32%

Industrial10%

Europe China

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• The impact of low benzene prices on the global maleic market will be felt interms of demand improvement ,while butane is likely to maintain its costadvantage over benzene as a maleic feedstock in the long run.

• The global maleic market has been showing modest improvement in the pastfew years in US and Europe, strong growth in the Middle East and SoutheastAsia and slowing growth in China

• High transportation costs, for heating etc. mean that maleic remains a largely

regional market. However, new trading opportunities have emerged amidlengthening supply in China and Northeast Asia and steady demand inMiddle East and Southeast Asia.

• Butane based maleic has continued to grow in China due to its cost

advantage over benzene and easier availability of feedstock butane - both ofwhich could lead to increasing maleic exports from China.

• UPR has maintained its dominant share of maleic consumption, but growthhas slowed in China.

APIC 2015

CONCLUSIONS


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