APIC 2018

76 Pages·2017·13.05 MB·English

APIC 2018
Asia Petrochemical Industry Conference
20-21 August 2018 Kuala Lumpur Organised by the Malaysian Petrochemicals Association
Turbulent times
Navigating in a
fast-changing world
Official APIC 2018 publication
Prepared on behalf of MPA by The Chemical Daily and ICIS
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WELCOME TO APIC 2018
OFFICIAL APIC SUPPLEMENT On behalf of the Malaysian Petrochemicals Association,
PUBLISHED FOR MPA BY: I would like to welcome speakers, delegates, exhibitors,
sponsors and partners to the 39th Asia Petrochemical
Industry Conference, being held in Kuala Lumpur on 20-21
The Chemical Daily August 2018. The theme for our meeting this year is
16-8, Nihonbashi Hamacho,
3-chome, Chuo-ku, ‘Creating value through collaboration’.
Tokyo 103, Japan The petrochemical industry is gaining significance in the light of increased economic
Tel: [phone]
activity, urbanisation and rising middle class incomes. Driven by strong demand, these
rapidly evolving megatrends are all key factors and opportunities for the petrochemical
industry. In the midst of the prospects these megatrends present, potential
Reed Business Information
Quadrant House, competition from other regions poses a threat to the Asian petrochemical industry.
The Quadrant, Sutton, The shale revolution has resulted in a robust petrochemical capacity expansion in
Surrey, SM2 5AS, UK
the US and the products are destined for Asia where the demand is high and rising
Tel: [phone]
rapidly. To ensure the sustained growth of the petrochemicals industry, it is crucial
Production that policymakers, together with petrochemical industry players and key
ICIS
stakeholders, collaborate to enhance the competitiveness of the industry while
Cover picture by skaman306/GettyImages preserving the environment.
All rights reserved. No part of this publication may APIC 2018 aims to bring together key business and industry experts to discuss these
be reproduced, stored in a retrieval system or issues across the value chain. It seeks to discover the untapped opportunities for
transmitted in any form or by any means, electro-
nic or mechanical, photocopying, recording or cooperation across the industry, so we have a deeper understanding of the market and
otherwise, without the permission of the publisher. can better equip ourselves with the right solutions to propel the industry further.
© 2018 This will undoubtedly pave the way for players to leverage each other’s strengths
The Chemical Daily and ICIS
and to learn faster in order to drive, capture and create more value. As a result, the
industry will continue to prosper and will be better prepared to meet the challenges
that lie ahead.
Chemicals and Petrochemicals It is therefore with great pleasure that I invite you to Kuala Lumpur to gain more
Manufacturers’ Association, India insights and engage with prominent industry leaders, and at the same time enjoy
Tel: [phone]
Malaysia’s warm hospitality.
http://www.cpmaindia.com
Akbar Md Thayoob
Japan Petrochemical President, Malaysian Petrochemicals Association
Industry Association
Tel: [phone] CONTENTS
http://www.jpca.or.jp
Interview with MPA: Asia drives growth, but collaboration is key .............................................5
Malaysian Petrochemicals Association The Year in Review: Conflicts and trade steal the headlines.... ....................................................9
Tel: [phone]
http://www.mpa.org.my MARKETS
Crude oil: OPEC cuts and geopolitical tensions boost crude oil ................................................14
Singapore Chemical Olefins: Naphtha price hikes cut olefin margins ............................................................................17
Industry Council Polyolefins: All change as new capacities and grades come onstream ...................................22
Tel: [phone] Aromatics: Benzene supply lags demand .......................................................................................27
http://www.scic.sg
Polyester chain: China demand dominates growth rates ..........................................................30
Acetic acid: Tight supply drives up Asian prices ............................................................................35
Korea Petrochemical
Polyurethanes: Tight markets absorb added GCC capacities ...................................................36
Industry Association
Tel: [phone] STRATEGY
http://www.kpia.or.kr M&A: Centre of activity moves towards China .............................................................................40
Trade agreements: Japan takes the lead to rescue CPTPP deal ..................................................44
Petrochemical Industry
Japan: Chemical sector aims for sustained growth ......................................................................47
Association of Taiwan
China: One Belt One Road initiative extends sphere of influence ..............................................51
Tel: [phone]
China: Environmental crackdown disrupts production ............................................................54
http://www.piat.org.tw
Petrochemical Industry Club, INVESTMENT
Federation of Thai Industries Malaysia: Petronas signs with Saudi Aramco to develop mega-projects ..................................58
Tel: [phone] Southeast Asia: Players push projects forward .............................................................................62
http://www.ftipc.or.th Northeast Asia: Home or away – two ways to invest in Asia .....................................................64
India: Investment will help meet firm demand ..............................................................................66
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INTERVIEW
Asia drives growth, but
collaboration is the key
APIC 2018 is focusing on collaboration as a key tool for Asian petrochemical producers as
they face rising global competition in their domestic Asian markets. ICIS’s Tahir Ikram
talks to the president of the Malaysian Petrochemicals Association, Akbar Md Thayoob
chemical industry is well placed to chemical industry in Asia, can expect
leverage its proximity to the pulse of to benefit from the Comprehensive
urbanisation, which is amongst the and Progressive Agreement for Trans-
most significant global megatrends for Pacific Partnership (CPTPP), which
the 21st century, he explains. creates one of the world’s largest free
Almost 90% of global urbanisation is trade areas, covering 11 countries in
expected to take place in Africa and the region.
Asia, on the back of a growing middle- ‘The economic benefits could be
income population. This will lead to both direct as well as indirect as petro-
higher consumption and drive demand chemical products have wide-ranging
for chemicals in packaging, construc- applications across all economic sec-
tion, personal care, electronics and tors. We expect to see spillover effects
automotive. from the growth in other sectors con-
‘Despite the huge regional potential, tributing towards higher demand for
the Asia-Pacific region is facing a myriad petrochemical products.’
of issues and challenges – trade shrink- Most of the growth in the global
age due to policy and regulatory chemical industry over the past 25
changes, overcapacities in certain years has been driven by Asia, Thayoob
chemical segments, deceleration of points out, citing data from a report by
NAS growth in key consuming countries, consultancy A.T. Kearney.
O
PETR and intensifying competition from
Akbar Md Thayoob, president of MPA other regions,’ says Thayoob. “In Asia, the petro-
‘North American producers, for chemical industry is
The Asia-Pacific region will example, are getting more competitive
remain the driver for global pet- due to access to cheap feedstock, well-placed to leverage
rochem-icals demand growth, while Middle East players are moving
its proximity to the
with its rising purchasing power and further downstream and encouraging
expanding urban populations. But more local production of consumer pulse of urbanisation”
countries in the region face a myriad and business goods for both domestic
of challenges that can partly be over- and export markets.’
come by collaboration. One way to overcome the challenges ‘By 2030, the home-field advantage is
‘The axis of the global economy is would be for petrochemical companies expected to help the Asian chemical
shifting from the West to the East, in the Asia-Pacific region to work closely industries own two-thirds of the market.
pulling the chemical demand centre with each other. ‘Through collaboration, Asia already owns almost half of global
eastwards,’ says Akbar Md Thayoob, we can improve efficiency, reduce costs chemical sales. The core of the chemical
president of the Malaysian Petro- and increase performance and our com- industry is shifting to Asia and by 2030,
chemicals Association (MPA), which is petitiveness,’ he declares. at least half of the top 10 chemical com-
this year hosting the APIC meeting in ‘Collaboration on technology, inno- panies could be Asian or Middle
Kuala Lumpur. vation, resources, logistical and mar- Eastern,’ he adds.
‘Rising purchasing power, large pop- keting capabilities across the industry The key trend is that Asian growth is
ulations and an increasing urbanisa- amplifies our strength and will expedite catalysed by ever-faster integration of
tion rate mean rapid regional demand the process of positioning ourselves at regional economies and societies. In
growth will be sustained in the future,’ the forefront of the industry,’ he adds. this respect, CPTPP facilitates the inte-
he adds. Specifically in Asia, the petro- All businesses, including the petro- gration of Asia-Pacific economies, page 6 
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INTERVIEW
Thayoob explains. cal industry, Thayoob says that CPTPP been a key contributor to Malaysia’s
However, he points out that Asia’s will help to diversify the country’s export earnings.’
chemical industry is also beset with manufactured exports because over Growth of market access in these
the emergence of new suppliers and 80% of them are in automotive parts, sectors will indirectly fuel demand for
competitors. ‘Hence the agreement at particularly components made out of petrochemical products, which have
last year’s APIC conference [in Japan] polymers, which are expected to enjoy wide-ranging applications.
that Asia’s petrochemical industry duty-free access to signatory country Intermediates and speciality petro-
will need to further diversify its raw markets immediately. chemicals are used in electrical and
material base and extend its portfolio electronics, automotive, personal care,
of high value-added products, as a “Malaysia is expected textile, packaging and food products
measure to brace itself against a new to overtake current etc, while basic chemicals are used
round of global oversupply. directly in paints and fuels and indi-
‘This includes an influx of petro- leaders Indonesia and rectly to produce intermediates and
chemical products coming into the speciality chemicals.
Thailand by 2020 in
Asian market from shale gas in the US, ‘Malaysia is expected to overtake
coal-to-chemicals technology in China terms of production current leaders Indonesia and
and ethane gas in the Middle East,’ Thailand by 2020 in terms of produc-
capacity”
Thayoob notes. tion capacity, especially in basic and
‘In line with our APIC 2018 theme, derivatives chemicals, with the com-
we also believe firmly that in working ‘This will help Malaysian parts and pletion of the integrated refinery and
together as an industry as well as a components manufacturers to export petrochemical complex project in
region, the petrochemicals industry to global original equipment manufac- Pengerang, Johor,’ he predicts.
would be in a stronger position to turers (OEMs) in CPTPP countries and ‘This will spur the growth of
address challenges to defend open and reinforce their position in the global Malaysia’s oil and gas downstream sec-
fair global trade.’ supply chain. Tariff concessions will tor, pushing Malaysia towards a new
Commenting on opportunities and also boost exports for the electrical and frontier of technology and economic
challenges for Malaysia’s petrochemi- electronics industry, which has also development,” he concludes.
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REVIEW
THE YEAR IN REVIEW
Conflicts, politics and trade issues have consistently held the headlines over the 16
months since the APIC meeting in Japan, with events in Syria and Iran, North Korea and
China, and the US and Russia all raising global tensions and threatening chemical trade
the midst of Brexit negotiations on the
UK’s withdrawal from the EU.
12 June US student Otto Warmbier returns
home in a coma after spending 17 months in
a North Korean prison and dies a week later.
14 June A fire at a west London residential
tower block, Grenfell Tower, kills 71 people.
Cladding made of aluminium and
polyethylene is believed to have
contributed to the spread of the blaze.
21 June In Saudi Arabia, Muhammad bin
Nayef is deposed as crown prince and
replaced by Mohammed bin Salman, son of
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Moon Jae-in is elected president of South Korea, seen here with his wife at his inauguration the biggest tax reform in the 70 years since
independence.
2017
Trump presidential campaign and the 4 July Russia and China urge North Korea to
Russian government. halt its missile and nuclear programmes
6 April US president Donald Trump orders the 22 May A terrorist bombing attack at an after it successfully tests its first
US military to launch 59 Tomahawk cruise Ariana Grande concert in Manchester, UK, intercontinental ballistic missile.
missiles at an air base in Syria in response to kills 22 people and injures over 500. 7 July The Treaty on the Prohibition of
a suspected chemical weapons attack on a 1 June Amidst widespread criticism, US Nuclear Weapons is voted for by 122 states.
rebel-held town. Russia describes the strikes president Donald Trump announces the US 17 July India elects its 14th president,
as an ‘aggression’, adding they significantly is to withdraw from the Paris Climate
damage US-Russia ties. Agreement.
7 May Emmanuel Macron defeats far-right 5 June A coalition of Middle East states
candidate Marine Le Pen to become including Saudi Arabia, Egypt and the
president of France. At 39, he is the United Arab Emirates cut diplomatic ties
youngest leader of France since Napoleon with Qatar, claiming the Doha government
Bonaparte, and the first president since the is sponsoring terrorist organisations. The
start of the fifth republic not to come rift is widely seen as an escalation of the
from the Socialist or Republican parties. ongoing battle for influence between
10 May Moon Jae-in is inaugurated as Saudi Arabia and Qatar.
president of South Korea after winning the 7 June Two terrorist attacks are simul-
elections triggered by the impeachment of taneously carried out by five terrorists
Park Geun-hye. belonging to ISIL against the Iranian
12 May Computers around the world are hit Parliament building and the Mausoleum of
by a large-scale ransomware cyberattack, Ruhollah Khomeini, both in Tehran, Iran,
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appointed to oversee an investigation into parliamentary majority in a snap election Plastic-filled cladding contributes to the huge
possible links or coordination between the called by prime minister Theresa May in fire at Grenfell Tower in west London page 10 
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REVIEW
71-year-old Ram Nath Kovind of BJP. He
replaces Pranab Mukherjee, who did not
stand for re-election due to ill-health.
4 August Professor Huang Jing is the first
person to be permanently banned from
Singapore for working with a foreign
government to influence foreign policy.
5 August The UN Security Council
unanimously approves fresh sanctions on
North Korean trade and investment.
21 August US destroyer USS John McCain
collides with an oil tanker east of Singapore.
Ten marines go missing in the incident.
25 August A military operation targeting
Rohingya Muslims in Myanmar ‘seems a
textbook example of ethnic cleansing’,
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Bangladesh.
29 August India and China agree to Party (CNRP), and charges him with treason and damages estimated in excess of
de-escalate tensions in a disputed region of and espionage. The crackdown has been US$91.6bn.
Bhutan after attempts by China to extend described as the worst in two decades as 24 September Angela Merkel wins her
a road triggered a military standoff in June. further actions to quell opposition fourth term as German chancellor but
25-30 August Hurricane Harvey strikes the US politicians and independent media have faces difficult negotiations to form a
as a Category 4 hurricane, causing followed in late 2017 and early 2018. coalition after failing to secure a majority.
catastrophic damage to the Houston 6-10 September The Caribbean and US are Merkel, who turned 64 in July 2018, has
metropolitan area, mostly due to record- struck by Hurricane Irma, a Category 5 been the longest-serving head of
breaking floods. At least 108 deaths are hurricane, the strongest ever recorded in government in the EU since 2014.
recorded, and total damage reaches the Atlantic basin outside the Caribbean 27 September Thailand’s supreme court
US$125bn, making it one of the costliest and Gulf of Mexico. The storm causes at finds the former prime minister Yingluck
natural disasters in US history. Petrochemical least 146 deaths and US$64.2bn in damage. Shinawatra guilty of negligence and
production is severely disrupted. 13-14 September Japan’s prime minister sentences her to five years in prison, a
1 September Russian president Vladimir Shinzo Abe signs agreements with India verdict delivered in absentia a month after
Putin expels 755 diplomats in response to including for the country’s first bullet train she fled the country. She is thought to be
US sanctions. project during a bilateral visit. in the UK.
3 September North Korea conducts its sixth 19-20 September Just two weeks after 1 October Fifty-eight people are killed and
and most powerful nuclear test so far. Hurricane Irma, Hurricane Maria strikes, 851 injured when Stephen Paddock opens
3 September Cambodian prime minister making landfall on Dominica as a Category fire on a crowd in Las Vegas, US, overtaking
orders the arrest of Kem Sokha, leader of 5 hurricane, and Puerto Rico as a Category the 2016 Orlando nightclub shooting as the
the opposition Cambodia National Rescue 4 hurricane. It causes at least 112 deaths deadliest mass shooting perpetrated by a
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Hurricane Harvey causes widespread flooding
and production disruption in the US Gulf Coast China’s Xi Jinping cements his power at the 19th National Congress of the Communist Party
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