FORECAST FOR THE AROMATICS MARKET IN 2022 For the paraxylene market in 2022, although demand for paraxylene products is expected to recover from 2021 due to the ease of the COVID-19 situation, global economy recovering, and the textile industry that can still be growing again to the near-normal situation from last year. Moreover, for tourism sector, more air travels, more re-opening of cities, and social activities will encourage more purchase of apparel on travel trips and more reintegration into society, coupled with increased capacity for the production of PTA derivatives in 2022. However, the supply will be pressured by new capacity, with a 7.2 million tons per year capacity added in 2022. Overall, the paraxylene market in 2021 shows stable signs relative to 2020. For the benzene market in 2022, benzene demand is expected to improve as the COVID-19 situation improves and the global economy starts to recover, coupled with added capacity for the production of downstream products from Styrene Monomer and phenol in 2022. However, the supply will be adversely influenced by the additional 3.5 million tons per year capacity, a 2.7 million tons increase from 2021. Therefore, the overall benzene outlook is more pressured relative to 2021. Furthermore, the benzene price climbed up as a result of an irregular event at the beginning of 2021 supported by the polar vertex in the US which is the primary market. Thus, the overall of benzene market in 2022 is projected to weaken compared to 2021. Overall, the aromatics market in 2022 although the demand is expected to improve as a result of economic recovery, the pressure from the new capacity in 2022 still remains, causing the average prices of paraxylene and benzene are similar from those in 2021. MARKET OVERVIEW – OLEFINS ETHYLENE The ethylene market in the first quarter of 2021 was forced by the increase in the new production capacity of Asian producers about 1.9 million tons, resulting in more supply over demand, thus pushing down prices. However, there was a supply shortage in North America during the second quarter. Due to the Polar Vortex in the US., the supply from the US exports to Asia declined, and ethylene prices increased significantly in the second quarter. During the third quarter, the COVID-19 situation was intensified again in Southeast Asia, causing demand to decline. Meanwhile, maintenance plans were postponed towards the end of Q3 and Q4, coupled with Chinese manufacturers continually adding a new production capacity of around 4.5 million tons, resulting in lower prices. However, due to the rising of raw material prices in the fourth quarter, including the Dual Control Energy Policy in China, the production capacity in China declined, and the demand increased after the ease of the lockdown. This improved ethylene prices, causing the ethylene price in Southeast Asia in 2021 to average at US$ 1,008 per ton, an increase of US$ 295 per ton from 2020. The ethylene over naphtha spread was US$ 362 per ton, growing from 2020 by US$ 29 per ton. PROPYLENE Under the same pressure as the ethylene market, the propylene market saw a significant drop in the propylene price in the first quarter of 2020. The new production capacity of Asian producers in the first quarter increased by approximately 2.3 million tons, and in the second quarter, it was increased by 2.2 million tons. However, propylene supply was scarce in the US and the EU due to the emergency shutdown for maintenance, causing the price to rise in the second quarter. The production capacity expansion of Asian producers continued to increase in the second half of 2021, with an increase of approximately 4.5 million tons. This resulted in a decline in propylene prices and plant capacity for FCC Units-propylene production in many Asian countries increased their production capacity due to higher refinery cost causing the increase of supply in Asia. Meanwhile, demand was pressured by the decl ine of the automotive industry due to the semiconductor chip shortages. However, raw material prices rose in winter due to coal and natural gas shortages, and high-investment manufacturers reduced their production capacity. As a result, propylene prices in Southeast Asia in 2021 averaged at US$ 966 per ton, an increase of US$ 191 per ton from 2020. Propylene and naptha spread averaged US$ 320 per ton, down by US$ 75 per ton from 2020 as naphtha prices rose at a greater rate following high propane and natural gas prices in the second half of the year. FORECAST FOR THE OLEFIN MARKET IN 2022 Although the demand for ethylene is expected to improve according to the economic recovery, it is also expected that there are supporting factors from the 62 PTT GLOBAL CHEMICAL PUBLIC COMPANY LIMITED Form 56-1 One Report 2021
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