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Corporate Structure

ICIS is the world’s largest provider of petrochemical information

with significant global fertilizer and energy coverage.

More than

35
years in petrochemical
benchmarks

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ICIS: Powered by Data. Driven by Insight.

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Phenol markets in Asia

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Agenda

Phenol markets in Asia

How does ICIS assess prices
ICIS reporting on India phenol market
The importance of a benchmark

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 Asia – concentration of capacity, cost advantage

Asia

Middle East & Africa

Acetone

Europe Phenol

Americas

0 1 2 3 4 5 6 7
million tonnes

Source: ICIS supply and demand database

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 China accounts for 39% for Asia’s current capacity

Unit: tonnes/year Phenol

Asia excluding China 3.86 million

China 2.51 million

Subtotal (Jan 2017) 6.37 million

2017 (CNOOC Huizhou,
470kt
PetroRabigh)
2018 (Deepak Phenolics) 200kt

2019 (Zhejiang Rongsheng) 400kt

Total by 2019 7.44 million

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 China leads Asia demand in 2016

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 China imports on a decline 2012-2015
900,000 China phenol imports 120.00%

China acetone imports

800,000
Average China Phenol 100.00%
700,000 plant op rate

600,000 80.00%

500,000
60.00%
400,000

300,000 40.00%

200,000
20.00%
100,000

MT 0 0.00%
2008 2009 2010 2011 2012 2013 2014 2015 2016

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 China phenol imports versus exports
India is the top destination of China’s phenol exports
China exports to India (% of total phenol exports)
900,000

2016 95.80%
800,000

700,000
2015 46.00%
600,000

500,000

400,000 China Phenol Imports

China Phenol exports
300,000

200,000

100,000

0
2011 2012 2013 2014 2015 2016
Copyright © 2015 ICIS – Private & Confidential www.icis.com 12
 Asia’s excess supply affects profitability
Margins
$/tonne Phenol and acetone margins versus benzene and propylene (USD/MT)
$2,500.00 $900.00
Phenol Margin (including acetone) Benzene FOB Korea Friday Close

Propylene CFR NE Asia Phenol CFR China $700.00

$2,000.00
Acetone CFR China
$500.00
$1,500.00

$300.00

$1,000.00
$100.00

$500.00
-$100.00

$0.00 -$300.00
Jun-2009 Jun-2010 Jun-2011 Jun-2012 Jun-2013 Jun-2014 Jun-2015 Jun-2016

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 Asia phenol/benzene spread narrows in past 4 years
USD/MT
Phenol spread to Benzene (China versus India)
$1,200.00

$1,000.00

China Phenol-Benzene Spread India Phenol-Benzene spread

$800.00

$600.00

$400.00

$200.00

$0.00
Jun-2009 Jun-2010 Jun-2011 Jun-2012 Jun-2013 Jun-2014 Jun-2015 Jun-2016

-$200.00

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 Correlation between China and India prices in 2016
$1,100.00
June: Kumho
Dec 2015: starts up new Oct: Mitsui Early Nov: Dec: TPCC
Shell FM in plant Aug: PTT Chiba Shell lifts turnaround
$1,000.00 force, MPS shuts plant turnaround FM
plant runs on waste
at reduced water tank
rate Dec- fire
May: PTT
$900.00 April June: Mitsui
starts up new
Osaka
March: Kumho plant
turnaround
turnaround
May: Mitsubishi Sept: G20 Sept: Shell
$800.00 in China, declares
starts major
turnaround phenol second FM
imports
rise Nov: Demonetisation in
$700.00 Feb: CCP & MPS India; China/Asia
turnaround phenol supply returns
to normal, deepsea
imports rise
$600.00

Phenol CFR China Phenol CFR India

$500.00
Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16

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Phenol outlook – key points
Phenol supply overhang to worsen in 2017-2018 as capacity expansion continues
to outpace demand growth
Overhang in China/northeast Asia supply
Cyclohexanone capacity expansion in China, Japan in 2017-2018 will help to
marginally ease supply/demand imbalance
Start-up of new phenol plant in India will reduce India’s import demand and
exacerbate supply overhang
Further industry consolidation may be necessary

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ICIS reporting on India phenol market

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India
Net phenol importer
Demand is higher than the capacity from both existing plants
Over 80% of India’s phenol is imported
Deepak Phenolics plant under construction for Q1 2018 start-up
Trade flow driven by ADDs
India pays a premium for non-ADD phenol because of ADDs and higher shipping
costs (eg. China and South Korea)
Existing price reference: crude oil, benzene, spot phenol deals, domestic phenol
prices (spot and producer prices)
Some use of ICIS by end-users in formula pricing

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 India phenol and acetone – existing and new capacity

Phenol Capacity Acetone Capacity

Producer Location
(kt/year) (Kt/year)

Hindustan Organic Kochi

42 25
Chemicals (HOCL) (Southwest India)

Navi Mumbai
SI Group India Ltd 37 21
(West India)

Subtotal 79 46

Dahej, Gujarat
Deepak Phenolics 200 120
(west India)

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 India’s phenol imports overtook China’s in 2015
tonnes/year
900,000 China phenol imports

India Phenol Imports

800,000
Linear (China phenol imports)
700,000
Linear (India Phenol Imports)
600,000

500,000

400,000

300,000

200,000

100,000

0
2008 2009 2010 2011 2012 2013 2014 2015 2016

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How do we assess prices

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ICIS Phenol assessments
Three regional reports (Europe, US, Asia Pacific)
Five Asia quotes: CFR NE Asia, CFR China, CFR SE Asia, CFR India, Ex-tank
Kandla
Four domestic China quotes (Sinopec, spot prices in east and south China)
Additional information in the Asia Pacific report:
Weekly average phenol/acetone plant operating rate in China
Weekly Kandla phenol inventory estimate

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 ICIS has been tracking CFR India phenol prices since
2006

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 ICIS Phenol Methodology specifics

Assessment
Through the week up to Friday at 1700 hours in Singapore
window

1,000 tonnes. In the absence of 1,000 tonne deals, ICIS will take into
Cargo size
consideration 500 tonne deals

Delivery point CFR west coast India (Kandla/JNPT/Hazira)

Phenol subject to ADD of less than $80/tonne can be normalised to

"Normalised"
ensure a reasonably tight range

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 Correlation between CFR India and ex-tank Kandla prices

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ICIS Pricing Intelligence
Trusted intelligence underpinning business decisions

ICIS price reports provide independent, objective and trusted intelligence for the global petrochemical, energy and fertilizer
markets. Available through the ICIS Dashboard, our price reports cover more than 180 commodities, and focus on pricing
trends in all major trading regions.
Put simply, ICIS provides the information you need to make better-informed business decisions.

We provide access to the latest: Request for a sample report today

Spot and contract assessments www.icis.com/price-reports
Market commentary on trends and
business developments
Transactions reported and confirmed
Plant and production news
Acetone Markets

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Agenda

Global and Indian Acetone Market

- Demand and Supply
- Price trends
Outlook
ICIS Methodology

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Global acetone capacity growing ahead of demand

10 87
9
86
8
7 85

6
M tonnes

84
5

%
83
4
3 82
2
81
1
0 80
2010 2015 2016 2018 2020
Capacity Demand Operating Rate (%)

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Capacity concentrated in China

Unit: metric tonnes/year Phenol Acetone

Asia excluding China 3.86 million 2.35 million

China 2.51 million 1.52 million

Subtotal (Jan 2017) 6.37 million 3.87 million

2017 (CNOOC Huizhou,

470kt 280kt
PetroRabigh)

2018 (Deepak Phenolics) 200kt 120kt

2019 (Zhejiang Rongsheng) 400kt 250kt

Total by 2019 7.44 million 4.52 million

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 China imports are declining; exports are rising
India is the top destination of China’s acetone exports
China exports to India (% of total acetone exports)
800,000
China Acetone Imports China Acetone Exports 2016 93.80%
700,000

2015 79.40%
600,000

500,000

400,000

300,000

200,000

100,000

0
2011 2012 2013 2014 2015 2016
Copyright © 2015 ICIS – Private & Confidential www.icis.com 30
India increasingly reliant on imports but new capacity could change the
picture
180

160

140

120
.000 tonnes

100

80

60

40

20

0
2012 2013 2014 2015 2016
Production Imports
Source: ICIS supply & demand database
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ADDs have shaped Indian imports

India Imports 2011 India Imports 2016

Others China
13% 5%
Russia
6%
Saudi Arabia
South Korea South Korea
8% 24% 23%
Belgium
3%
Thailand Thailand Singapore
9% 30% 8%
Singapore
18%

Taiwan Taiwan
25% 28%

Source: ICIS supply & demand database

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ICIS Supply and Demand Database
Examine the past, present and future of a product market landscape

ICIS Supply and Demand Database is a powerful data service that brings you a wealth of refining, petrochemical feedstocks,
base chemicals, intermediates and derivatives market data, giving you multiple views of the marketplace, actual market
dynamics and reliable data from 1978 up to 2030.
Fully integrated into feedstocks and downstream into derivatives, you can gain a
consistent picture of product availability and consumption.

Coverage includes:
Standard balances Capacity and production volumes
Import/export and trading patterns Plants and refineries
Consumption volumes Company ownership

Request for a demo

www.icis.com/supplydemand-database
2016 prices have trended at higher levels
Oct: Mitsui Dec: TPCC
Chiba turnaround
June: Mitsui June: Kumho
starts up new turnaround
Osaka
turnaround plant
Aug: PTT shuts
Early Nov:
plant on waste
Shell lifts
water tank fire
FM
Nov: Demonetisation
in India; China/Asia
Shell Dec phenol supply returns
2015 FM in to normal, deepsea
Sept: G20 in Sept: Shell
force, MPS imports rise
China, phenol declares
plant at May: PTT May: Mitsubishi imports rise second FM
reduced starts up new starts major
rate Dec- plant turnaround
April

Feb: CCP & MPS March: Kumho

turnaround turnaround

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Strong relation between China and India prices

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Acetone Methodology

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 ICIS Acetone assessments

Four regional reports (Europe, US, Asia Pacific,

India/Middle East)
Three Asia quotes: CFR China, CFR India, CFR SE
Asia
Four domestic China quotes (Sinopec, spot prices in
east and south China)

Additional information in the Asia Pacific report:

Weekly Jiangyin port acetone inventory

Solvents Middle East/India: CFR India, CFR Middle

East, Ex-tank Kandla

Copyright © 2015 ICIS – Private & Confidential www.icis.com 36

ICIS CFR India
Rich price history – launched in November 2004

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Strengthen your negotiation position with
ICIS pricing data and news on the phenol
and acetone markets
ICIS phenol, acetone and solvent pricing reports
Coverage includes:
Spot and contract prices (CFR, FOB, domestic
prices)
Key trading regions – Asia, the Middle East,
China and India
Ex-tank Kandla price assessment
Trades, bids, offers and contracts information
Analysis of price drivers and market
developments
Market updates, breaking news and price alerts
Upstream and downstream overview
Plant production and maintenance schedules Request for a sample report
and outages www.icis.com/price-reports
Supply, demand and tradeflow insight
Methodology

Terms Import – Domestic –

CFR India Ex-tank Kandla
Assessment Window Through the week up to Wednesday, at 1800 At the close of business on Wednesday, at
hours in Singapore 1800 hours in Singapore
Specification Minimum purity of 99.5%
Timing Loading or delivered 4-6 weeks forward from From prompt to two weeks from the date of
the date of publication publication
Terms Up to 30-90 days from date of bill of lading 60-90 days
Cargo size 500-1000 tonnes Minimum 20 tonnes
Delivery West Coast, India Kandla

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ICIS CFR India

Low end of range – High end of range –

• Advance Licence Market • Domestic market
- Finished product is re-exported • ADD-exempt cargoes
• Anti-Dumping Duty (ADD) above $100 e.g. China, Thailand, Russia
• Cargoes from Europe, Singapore, • ADD below $100
Taiwan, USA e.g. South Korea, Taiwan
• 30% of trades • 70% of trades

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ICIS CFR India
Company ADD applicable Sold to: ADD to be added? Assessment
($/tonne)
European-origin 277.85 Advance licence market No Low end of the range

Mitsui Phenol Singapore via
Sumitomo Singapore
Mitsui Phenol Singapore via
Mitsui Bussan
Taiwan Prosperity Chem Corp 205.05
(TPCC)
Taiwan Formosa
S Korea LG Chem
S Korea Kumho P&B
China Chang Chun
Thailand PTT
Russian-origin
147.1 Advance licence market No Low end of the range
158.1 Advance licence market No Low end of the range
Advance licence market No Low end of the range
86.1 Domestic market Yes High end of range
79.75 Domestic market Yes High end of range
0 Domestic market No ADD High end of range
0 Domestic market No ADD High end of range
0 Domestic market No ADD High end of range

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ICIS Pricing
Intelligence
Trusted intelligence underpinning
business decisions
ICIS price reports provide independent,
objective and trusted intelligence for the
global petrochemical, energy and fertilizer
markets.
Available through the ICIS Dashboard, our
price reports cover more than 180
commodities, and focus on pricing trends
in all major trading regions.
We provide access to the latest:
Spot and contract assessments
Market commentary on trends and business
developments
Transactions reported and confirmed
Plant and production news
Request for a sample report
www.icis.com/price-reports
ICIS Supply and
Demand Database
Examine the past, present and future
of a product market landscape
ICIS Supply and Demand Database is a
powerful data service that brings you a wealth
of refining, petrochemical feedstocks, base
chemicals, intermediates and derivatives
market data, giving you multiple views of the
marketplace, actual market dynamics and
reliable data from 1978 up to 2030.
Coverage includes:
Standard balances
Import/export and trading patterns
Consumption volumes
Capacity and production volumes
Plants and refineries
Company ownership
Request a demo
www.icis.com/supplydemand-database
ICIS
News
Breaking news and analysis from across
the global petrochemical markets
ICIS news editors around the world are
reporting the breaking news stories that
impact chemical markets, influence commodity
prices, and affect your daily business
decisions.
Be the first to find out market moves, deals,
announcements, new data and analysis – all
via one online subscription.
Request a free trial
www.icis.com/request-trial-news
 THANK YOU

Malini Hariharan
malini.hariharan@icis.com
+91 9820629926

Angeline Soh
angeline.soh@icis.com
+65 6780 4354

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