Whither Demand? - Growth In Prospect

Whither Demand? - Growth In Prospect

Roger Lee

Tecnon OrbiChem Marketing Seminar at APIC 2015

Seoul, 7 May 2015

-2

-1

0

1

2

3

4

5

1995 2000 2005 2010 2015 2020

Actual

Forecast 2008

Current Forecast

% AAGR

APIC 2015

WORLD GDP GROWTH 1995-2020

Source: World Bank & Probe Economics

20.0

30.0

40.0

50.0

60.0

1995 2000 2005 2010 2015 2020

Actual

2008 Forecast

Current Forecast

APIC 2015

WORLD GDP GROWTH 1995-2020

(Billion Constant 2000 Dollars)

Source: World Bank & Probe Economics

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

1995 1997 1999 2001 2003 2005 2007

North America

South America

West Europe

East Europe

ME & Africa

S & SE Asia

Northeast Asia

China

Source: World Bank & Probe Economics

APIC 2015

WORLD GDP GROWTH BY REGION 1995-2007

(Billion Constant 2005 Dollars)

-2,000

0

2,000

4,000

6,000

2008 2009 2010 2011 2012 2013 2014

World

Source: World Bank & Probe Economics

APIC 2015

WORLD GDP GROWTH BY REGION 2008-2014

(Billion Constant 2005 Dollars)

North America

South America

West Europe

East Europe

ME & Africa

S & SE Asia

Northeast Asia

China

0

1

2

3

4

5

25000 30000 35000 40000 45000

Phthalic Anhydride

Orthoxylene

Acrylic Acid

Adipic Acid

Adiponitrile

Maleic Anhydride

Consumption (Million Tons)

APIC 2015

WORLD PETROCHEMICAL CONSUMPTION vs GDP1995-2007 & 2008-2014

GDP (Billion 2000 $)

Source: Tecnon OrbiChem

2008-2014

1995 -2007

0

10

20

30

40

50

25000 30000 35000 40000 45000

VCM

PTA

Paraxylene

MEG

Acetic Acid

Caprolactam

Consumption (Million Tons)

APIC 2015

WORLD PETROCHEMICAL CONSUMPTION vs GDP1995-2007 & 2008-2014

GDP (Billion 2000 $)

Source: Tecnon OrbiChem

2008-2014

1995 -2007

0.0

1.0

2.0

3.0

4.0

5.0

6.0

1996 2000 2004 2008 2012 2016 2020

2008 Forecast

North America

South America

West Europe

East Europe

ME & Africa

S & SE Asia

Northeast Asia

China

Source: Tecnon OrbiChem

APIC 2015

WORLD PHTHALIC ANHYDRIDE CONSUMPTION

Million Tons

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

1995 2000 2005 2010 2015 2020

2008 Forecast

North America

South America

West Europe

East Europe

ME & Africa

S & SE Asia

Northeast Asia

China

Source: Tecnon OrbiChem

APIC 2015

WORLD ADIPIC ACID CONSUMPTION

Million Tons

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

1995 2000 2005 2010 2015 2020

2008 Forecast

North America

South America

West Europe

East Europe

ME & Africa

S & SE Asia

Northeast Asia

China

Source: Tecnon OrbiChem

APIC 2015

WORLD ACRYLIC ACID CONSUMPTION

Million Tons

0.0

0.5

1.0

1.5

2.0

1995 2000 2005 2010 2015 2020

2008 Forecast

North America

South America

West Europe

East Europe

ME & Africa

S & SE Asia

Northeast Asia

China

Source: Tecnon OrbiChem

APIC 2015

WORLD MALEIC ANHYDRIDE CONSUMPTION

Million Tons

0.0

10.0

20.0

30.0

40.0

50.0

60.0

1995 2000 2005 2010 2015 2020

2008 Forecast

North America

South America

West Europe

East Europe

ME & Africa

S & SE Asia

Northeast Asia

China

Source: Tecnon OrbiChem

APIC 2015

WORLD VCM CONSUMPTION

Million Tons

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

1995 2000 2005 2010 2015 2020

2008 Forecast

North America

South America

West Europe

East Europe

ME & Africa

S & SE Asia

Northeast Asia

China

Source: Tecnon OrbiChem

APIC 2015

WORLD PARAXYLENE CONSUMPTION

Million Tons

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

1995 2000 2005 2010 2015 2020

2008 Forecast

North America

South America

West Europe

East Europe

ME & Africa

S & SE Asia

Northeast Asia

China

Source: Tecnon OrbiChem

APIC 2015

WORLD MONOETHYLENE GLYCOL CONSUMPTION

Million Tons

0.0

1.0

2.0

3.0

4.0

5.0

6.0

1995 2000 2005 2010 2015 2020

2008 Forecast

North America

South America

West Europe

East Europe

ME & Africa

S & SE Asia

Northeast Asia

China

Source: Tecnon OrbiChem

APIC 2015

WORLD CAPROLACTAM CONSUMPTION

Million Tons

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

1995 2000 2005 2010 2015 2020

2008 Forecast

North America

South America

West Europe

East Europe

ME & Africa

S & SE Asia

Northeast Asia

China

Source: Tecnon OrbiChem

APIC 2015

WORLD ACETIC ACID CONSUMPTION

Million Tons

APIC 2015

GDP vs CONSUMPTION GROWTH SHARE 1995-2007

Source: World Bank, Probe Economics & Tecnon OrbiChem

GD

P

Male

ic A

nhydrid

e

Adip

icA

cid

Capro

lacta

m

Phth

alic

Anhydrid

e

Acry

lic Acid

Ace

tic Acid

Para

xyle

ne

MEG

VCM

N & S America 35% 13% 19% -6% -1% 20% 6% 4% 3% 15%

Europe 29% 5% 30% 6% -10% 18% 12% 3% 5% 12%

ME & Africa 8% 10% 3% -2% 12% 4% 2% 3% 3% 1%

S & SE Asia 9% 5% 5% 5% 15% 8% 16% 26% 18% 13%

Northeast Asia 7% 5% 8% 32% 0% 14% 17% 23% 3% 5%

China 12% 62% 36% 65% 85% 36% 47% 41% 68% 54%

Asia 29% 71% 49% 102% 99% 58% 80% 90% 88% 72%

World 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

APIC 2015

GDP vs CONSUMPTION GROWTH SHARE 2008-2014

Source: World Bank, Probe Economics & Tecnon OrbiChem

GD

P

Male

ic A

nhydrid

e

Adip

icA

cid

Capro

lacta

m

Phth

alic

Anhydrid

e

Acry

lic Acid

Ace

tic Acid

Para

xyle

ne

MEG

VCM

N & S America 27% 10% -402% -12% -12% 9% 7% 4% 6% 12%

Europe 4% -1% -196% 18% -32% 1% -11% 7% 4% -8%

ME & Africa 11% 7% 15% 0% 13% 9% 9% 1% 8% 9%

S & SE Asia 19% 6% 66% 3% 29% 9% 18% 4% 13% 4%

Northeast Asia 6% -14% 72% -5% -38% 20% 2% -24% 1% 0%

China 32% 93% 545% 96% 141% 52% 74% 108% 68% 83%

Asia 57% 84% 683% 94% 132% 81% 94% 88% 83% 87%

World 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

APIC 2015

CONCLUSIONS

• GDP growth stalled for 3 years as a result of the 2008 financial crisis.

• World GDP growth is still at least 0.5% below that forecast in early 2008.

• Two thirds of global GDP growth since 2008 has been in the world outside the Americas and Europe, compared with one third beforehand.

• Following the 2007-2009 hiatus, many petrochemicals have resumed growth at or above previous GDP multipliers, but some have not.

• For the products considered here, over 80% of consumption growth since 2008 has been in Asia. For some products the proportion is much higher.

• Europe has suffered most, contributing only 4% to global GDP and recording losses in most categories of consumption growth since 2008.

• With China entering a ‘New Normal’ period of lower growth, Europe struggling to recover and crude oil price uncertainty putting a damper on investment, it is difficult to see a return to pre-crisis spending levels occurring any time soon.

Source: Tecnon OrbiChem

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