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Transcript of Global Fibres Overview - OrbiChem 2014/apic2014_yang_qin.pdf · Global Fibres Overview (Michelle)...
Global Fibres Overview
(Michelle) Yang Qin
Synthetic Fibres Raw Materials Committee Meeting at APIC 2014
Pattaya, 16 May 2014
• Historical and Forecast Man Made Fibre Production
• Cotton Market Trends
• Impact of Polyester Over-Capacity
• Expected Fibre Market Trends
• Conclusions
Source: Tecnon OrbiChem
APIC 2014
AGENDA
Source: Tecnon OrbiChem
R2 = 0.974
R2 = 0.977
15
25
35
45
55
65
75
5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000
Demand (Million Tons)
GDP (Billion 2000 $)
APIC 2014
WORLD FIBRE DEMAND vs GDP
0
20
40
60
80
100
120
140
160
1980 1985 1990 1995 2000 2005 2010 2015 2020 2025
Million Metric Tons
Source: Tecnon OrbiChem
Polyester Fibre
Polyamide Fibre
Acrylic Fibre
PolypropyleneFibre
Cellulosic Fibres
Cotton
Wool
APIC 2014
WORLD FIBRE PRODUCTION 1980-2025
• World fibre production has excellent correlation with GDP which we use as basis for projections to 2025
• Total fibre production expected to grow 3.7% per annum to 2025
• Global 2013 fibre production estimated at 85.5 million tons
• Global 2013 synthetic fibre production estimated at 55.8 million tons (i.e. excluding cotton, cellulosics and wool)
• Global synthetic fibre volume growth is 98%+ of future total fibreproduction increases
• Polyester (filament and staple) makes up 95%+ of future global synthetic fibre production growth
APIC 2014
WORLD FIBRE PRODUCTION TRENDS
Source: Tecnon OrbiChem
0
8
16
24
32
40
48
56
64
1980 1985 1990 1995 2000 2005 2010 2015 2020 2025
Million Metric Tons
North America
South America
West Europe
East Europe
ME & Africa
S & SE Asia
Northeast Asia
China
Source: Tecnon OrbiChem
APIC 2014
WORLD POLYESTER FILAMENT PRODUCTION
• Polyester filament growth nearly three times the average of all fibres during the last five years (7.9% vs. 3.1%)
• Global 2013 filament production just under 29 million tons (7% growth over 2012)
• Major production increases forecast for China, India and the US
• Production increase in US due to share gains in carpet industry by polyester BCF
• Production decreased in essentially all other developed countries
• Future production growth (through 2025) expected to moderate to 6% per annum (still almost twice all other fibre growth)
Source: Tecnon OrbiChem
APIC 2014
WORLD POLYESTER FILAMENT PRODUCTION TRENDS
0
4
8
12
16
20
24
28
32
36
40
1980 1985 1990 1995 2000 2005 2010 2015 2020 2025
Million Metric Tons
North America
South America
West Europe
East Europe
ME & Africa
S & SE Asia
Northeast Asia
China
Source: Tecnon OrbiChem
APIC 2014
WORLD POLYESTER STAPLE PRODUCTION
• Global polyester staple production growth during last five years 6.4%
• Production increases in 2012/13 for polyester staple production slowed significantly after above trend growth in 2010/11 due to cotton substitution
• As with polyester filament, China dominates with 65% of global production
• Future production growth 4-5% through 2025 with China and India dominating
• Limited cotton production growth through 2025 will be primary driver for polyester staple
Source: Tecnon OrbiChem
APIC 2014
WORLD POLYESTER STAPLE PRODUCTION TRENDS
0.0
1.0
2.0
3.0
4.0
5.0
1980 1985 1990 1995 2000 2005 2010 2015 2020 2025
Million Metric Tons
North America
South America
West Europe
East Europe
ME & Africa
S & SE Asia
Northeast Asia
China
Source: Tecnon OrbiChem
APIC 2014WORLD POLYAMIDE FILAMENT PRODUCTION
• Although production growth for polyamide fibre from 2007 to 2012 was flat, sharply higher volumes (~10%) were experienced in 2013, due to textile and industrial growth in China and improved carpet and automotive markets in the US
• Recent increases in polyamide production are expected to moderate to 1-2% per annum growth through 2025, despite 5% growth expected in China
• Future growth limited by additional polyester substitution expected in carpet and some industrial applications including side air-curtains
Source: Tecnon OrbiChem
APIC 2014
WORLD POLYAMIDE FILAMENT PRODUCTION TRENDS
0.0
0.5
1.0
1.5
2.0
2.5
3.0
1980 1985 1990 1995 2000 2005 2010 2015 2020 2025
Million Metric Tons
North America
South America
West Europe
East Europe
ME & Africa
S & SE Asia
Northeast Asia
China
Source: Tecnon OrbiChem
APIC 2014WORLD ACRYLIC FIBRE PRODUCTION
Source: Tecnon OrbiChem
• Global acrylic fibre production has fallen 30% since its high point in 2004
• Production in 2013 (slightly under 2 million tons) was flat compared with 2012
• Acrylic fibre costs continue to suffer from propylene availability and high acrylonitrile conversion costs
• Despite a sharp fall in production over the past 10 years, more modest declines of 1-2% are forecast due to weak supplies of wool and cotton and continuing technical advantages for acrylic fibre in certain markets
APIC 2014
WORLD ACRYLIC FIBRE PRODUCTION TRENDS
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
1980 1985 1990 1995 2000 2005 2010 2015 2020 2025
Million Metric Tons
North America
South America
West Europe
East Europe
ME & Africa
S & SE Asia
Northeast Asia
China
Source: Tecnon OrbiChem
APIC 2014
WORLD POLYPROPYLENE FIBRE PRODUCTION
Source: Tecnon OrbiChem
• Global polypropylene fibre production has fallen 1% per annum in the last five years due to volatile propylene costs which has facilitated polyester substitution in some markets
• More stable propylene costs as a result of increased propane dehydrogenation and growing nonwovens’ markets are expected to reverse recent trends and result in a1-2% growth in fibre production growth during forecast period
APIC 2014WORLD POLYPROPYLENE FIBRE PRODUCTION TRENDS
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
1980 1985 1990 1995 2000 2005 2010 2015 2020 2025
Million Metric Tons
North America
South America
West Europe
East Europe
ME & Africa
S & SE Asia
Northeast Asia
China
Source: Tecnon OrbiChem
APIC 2014
WORLD CELLULOSIC FIBRE PRODUCTION
Source: Tecnon OrbiChem
• Global production of cellulosic fibre has grown 5.8% per annum during the previous five years, driven primarily by China
• 2013 production increased to 4 million ton (5.5% above 2012)
• Projected growth of 5% per annum is expected for the forecast period, due to strong production growth in China and Southeast Asia as cellulosic fibre substitutes for cotton and new market opportunities, particularly in nonwovens, are developed
APIC 2014
WORLD CELLULOSIC FIBRE PRODUCTION TRENDS
Million Metric Tons
10
12
14
16
18
20
22
24
26
28
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
Source: ICAC
Historical
Forecast
APIC 2014
WORLD COTTON PRODUCTION
Dollars per Ton
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Polyester Staple1.4 den China
Cotton OutlookAsia ‘A’ Index
Source: Tecnon OrbiChem & Cotton Outlook
APIC 2014
COTTON vs POLYESTER STAPLE PRICES
• Cotton production has limited upside due to competition for landand water resources and limited potential for yield improvement
• Cotton production in 2012/13 season was 26 million tons and is expected to remain in the 25-27 million ton range for forecast period
• Cotton price volatility pushed retailers and brand houses to polyester substitution in the past 2-3 years
• Limited production growth and higher costs are expected to put upwards on pressure cotton prices in the longer term
• China’s state policy of stockpiling cotton has changed and is being replaced by direct subsidiaries to farmers
• Management of Chinese state reserves of cotton will play a significant role in prices over the next year or two
APIC 2014
COTTON TRENDS
Source: Tecnon OrbiChem
APIC 2014NEW CHINESE POLYESTER FIBRE CAPACITY 2011-2014
Producer Capacity(1,000 ktpa)
Start-Up2014
Product
Zhejiang Guxiandao 500 Mar PIY
Tongkun 400 Q2 PFY
Zhejiang Xinfengming 400 Q2 PFY
Jiangsu Shenghong 250 Q2 PFY
Sanfangxiang 200 Q2 PFY
Zhejiang Hongjian 200 H2 PFY
Fujian Jinxing 200 H2 PFY
Jiangsu Zhangjiagang Xinxin 180 H2 PFY
Zhejiang Huaxin 400 H2 PFY
Jiangsu Haixin 500 H2 PFY
Hebei Baoyi 200 Q4 PFY
Fujian Changle Shanli 200 Q3 PSF
Fujian Jinxing 200 Q3 PSF
Nameplate Capacity Total 3,830
Source: Tecnon OrbiChem
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
2011 2012 2013 2014
Effective Capacity Increment, Million Metric Tons
0
5
10
15
20
25
30
35
40
45
50
2012 2013 2014 2015 2016
60
62
64
66
68
70
72
74
76
78
Million Metric Tons
Source: Tecnon OrbiChem
APIC 2014
WORLD POLYESTER OVERCAPACITY (Virgin Only)
Production
Capacity
Capacity Utilisation
Polyester Filament
Production
Capacity
Capacity Utilisation
Polyester Staple
Utilisation %
0
5
10
15
20
25
30
35
40
45
50
2012 2013 2014 2015 2016
62
64
66
68
70
72
74
76
78
80
Million Metric Tons
Source: Tecnon OrbiChem
APIC 2014
CHINESE POLYESTER OVERCAPACITY (Virgin Only)
Production
Capacity
Capacity Utilisation
Polyester Filament
Production
Capacity
Capacity Utilisation
Polyester Staple
Utilisation %
APIC 2014THE IMPACT OF POLYESTER OVERCAPACITY
• Polyester overcapacity (fibre and intermediates) for the next five years indicates limited opportunity for margin improvement in the polyester chain, regardless of end-use demand
• Decreasing margins with limited upside will continue to improve polyester’s competitive position compared to other fibres
• Despite slower overall fibre growth, continuing gains in market share for polyester translate to steady or only modestly slower growth for polyester fibre during the forecast period
Source: Tecnon OrbiChem
APIC 2014EXPECTED FIBRE MARKET TRENDS
Market Trending To… Share Reduction
Carpets Polyester Filament Polyamide and Polypropylene Filament
Nonwovens Cellulosic and Polypropylene Staple
Cotton
Apparel Polyester and Cellulosic Filament and Staple
Cotton
Air Bags (Side Curtains)
Polyester Filament Polyamide Filament
Tailored Clothing Polyester Wool
Source: Tecnon OrbiChem
APIC 2014CONCLUSIONS
• Overall fibre production growth slows in forecast period
• Limited cotton growth has dramatic impact on synthetic fibre markets
• Polyester domination in fibre markets accelerates as overcapacity limits margin expansion throughout the chain
• Despite growing cost advantages, polyester is technically limited in some markets allowing more modest growth in polyamide, polypropylene and cellulosic fibre, coupled with modest declines in acrylic and cotton production
Source: Tecnon OrbiChem
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