IHSM Dooley EngineeringPolymers March22

Engineering Polymers
23 March 2018
Hilton Americas | Houston, TX, US
Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

Nylon 6 – rising capacity
Capacity outpaces demand
10 100%
8 80%
Million Metric Tons
Operating Rate
6 60%
4 40%
2 20%
0 0%
12 13 14 15 16 17 18 19 20 21 22
Demand Total Capacity Operating Rate
Source: World Analysis - Nylon Engineering Resins © 2018 IHS Markit

Asia leads additions
10
8
Million Metric Tons
0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Americas Europe Asia
Source: IHS Markit © 2018 IHS Markit

Capacity additions in advance of demand
1,200
Thousand Metric Tons
900
600
300
-300
12 13 14 15 16 17 18 19 20 21 22
North America South America Europe
CIS & Baltic States Middle East Indian Subcontinent
China Rest of Asia Demand Growth

100
200
300
400
500
600
700
Source: IHS Markit

BASF
Li Peng

Liheng Changle
Fujian Zhongjin NM
Nylon 6 – producers
Many regional operators
Zig Sheng
Lanxess
KuibyshevAzot
AdvanSix
Fujian Jinjiang Tech.
Xinhui Meida DSM
Ube
DSM
Hengyi
Wuxi Chang'an Polymer
Grupa Azoty
JSC Grodno Khim.
Jiangsu Hongsheng
Radici
Asia
Hyosung Corp.
Yueyang Baling
DOMO Chemicals
Europe
Jiangsu Haiyang CF
Shaw
CNCEC
Americas
Nantong Wenfeng
© 2018 IHS Markit
Caprolactam feedstock capacity
Asia dominates
10
8
Million Metric Tons
0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Nylon 6 strategic implications
Single regional production by

most producers
Asia dominates Nylon 6,

Caprolactam capacity

Nylon 66 – capacity
High operating rates
3 100%
Million Metric Tons
Operating Rate
2 80%
1 60%
0 40%
12 13 14 15 16 17 18 19 20 21 22

US and China lead 2018 Capacity
1,000
800
600
400
200

Additions in advance of demand
300
200
100
-100
12 13 14 15 16 17 18 19 20 21 22
North America South America West Europe CIS & Baltic States
Middle East China Rest of Asia Demand Growth

200
400
600
Source: IHS Markit

Ascend
Invista

BASF
DowDuPont
Four dominant operators
Nylon 66 – producers
Shenma
Radici
Asahi Kasei
Jiangsu Shenma
Huafon
Nilit
Polyamide HP
Fujian Shenma
Saudi Polymers
Toray
Guorui Chemical
Grand Pacific
Hangzhou Dikai
Rhodia
APAC
Yingkou Yinglong
Jiangsu Huayang
EMEA
Saba Tire Cord
XENTRYS
Liaoyang Dongda
Americas
Haian Nylon Plant

© 2018 IHS Markit
Feedstock capacities
Bottleneck at adiponitrile
16
Thousands of Tons
12
0
Acrylonitrile Butadiene Adiponitrile HMDA Adipic Acid
Capacity Consuption at Full N66 Prodn

Adiponitrile – capacity
Adiponitrile
Debottlenecking investments underwayCapacity
2.0
Million Metric Tons
1.5
1.0
0.5
0.0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Asahi Kasei Chem. Ascend Butachimie Invista

Nylon 66 strategic implications
Narrowly balanced feedstocks
Disrupted production early 2018
High tariffs on Nylon 66 into China
Capacity additions:
Ascend 2018
Butachemie 2Q19
Invista Victoria 4Q20
Polycarbonate – rising capacity
Capacity outpaces demand
8 100%
Million Metric Tons
6 80%
Operating Rate
4 60%
2 40%
0 20%
12 13 14 15 16 17 18 19 20 21 22
Source: World Analysis - Polycarbonate © 2018 IHS Markit

Asia leads additions
8
6
Million Metric Tons
0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Americas EMEA APAC

Additions in advance of demand
800
600
400
200
-200
12 13 14 15 16 17 18 19 20 21 22
North America South America Middle East CIS & Baltic States
China Rest of Asia Demand Growth
Source: World Analysis - Polycarbonate © 2018 IHS Markit

Polycarbonate strategic implications
Capacity additions in China
Exports to China declining
Lower operating rates worldwide
Pricing pressure

ABS – full production
16 100%
Million Metric Tons
12
Operating Rate
80%
60%
4
0 40%
12 13 14 15 16 17 18 19 20 21 22
Source: World Analysis - ABS

ABS – capacity
Asia dominates capacity
14
12
Million Metric Tons
10
0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Americas EMEA APAC


ABS – demand ABS – end use industries
China dominates demand Industrial users locate in Asia
Southeast Appliance Other

Asia 40% 11%
7%
The
Americas Building &
Northeast
9% Construction
Asia
6%
68%
Europe
9%
Transportation
13%
Rest of the
World Electronics/Electrical
7% 30%
Source: IHS Markit © 2018 IHS Markit Source: IHS Markit © 2018 IHS Markit

ABS – capacity lagging demand
Demand absorbed capacity
800
600
400
200
-200
12 13 14 15 16 17 18 19 20 21 22
North America Europe CIS & Baltic States Middle East
Indian Subcontinent China Rest of Asia Demand Growth

ABS strategic implications
Operating rates high
Asia dominates supply & demand
Capacity lags demand
Prices rising

PBT – capacity
Operating rates stagnant
2,000 100
1,600 80
Operating Rate
1,200 60
800 40
400 20
0 0
12 13 14 15 16 17 18 19 20 21 22
Domestic Demand Total Capacity Operating Rate

PBT – capacity
Asia dominates
2,500
2,000
1,500
1,000
500
0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023


PBT – trade
Asia dominates exports
160
140
120
100
80
60
40
20
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
West Europe North America

PBT – technology replacement
DMT dominated in 2013 PTA dominates in 2023
DMT DMT
82% 21%
PTA
79%
PTA
18%
Source: IHS Markit © 2018 IHS Markit Source: IHS Markit © 2018 IHS Markit

PBT strategic implications
Operating rates low
Asia dominates capacity
PTA replaces DMT
Prices rising

Contact details
Brendan Dooley
Global Director, Engineering Polymers
+1 346 203 2628 cell
Brendan.Dooley@ihsmarkit.com
Houston

IHS Markit Customer Care
CustomerCare@ihsmarkit.com
Americas: +1 800 IHS CARE (+1 800 447 2273)
Europe, Middle East, and Africa: +44 (0) 1344 328 300
Asia and the Pacific Rim: +604 291 3600
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Engineering Polymers

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

Source: IHS Markit

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

Fujian Jinjiang Tech.

Xinhui Meida DSM

Wuxi Chang'an Polymer

JSC Grodno Khim.

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

Single regional production by

Asia dominates Nylon 6,

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

Source: IHS Markit © 2018 IHS Markit

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

Source: World Analysis - Nylon Engineering Resins © 2018 IHS Markit

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

Source: IHS Markit

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

Saba Tire Cord

Haian Nylon Plant

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

High operating rates

Narrowly balanced feedstocks

Disrupted production early 2018

High tariffs on Nylon 66 into China

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

Capacity additions in China

Exports to China declining

Lower operating rates worldwide

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

Americas EMEA APAC

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

Southeast Appliance Other

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

Operating rates high

Asia dominates supply & demand

Capacity lags demand

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

Americas Europe Asia

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

Operating rates low

Asia dominates capacity

PTA replaces DMT

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

Confidential. © 2018 IHS MarkitTM. All Rights Reserved.

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