Burckhardt Compression Holding Ag · SIX:BCHN
Burckhardt Compression — Burckhardt Compression LDPE Webinar 2021
25 slides from Burckhardt Compression's conference presentation, Apr 14, 2021
Slide 1: LDPE Market Outlook in the Post COVID Era
LDPE MARKET OUTLOOK IN THE POST COVID ERA Zurich, April, 14-17, 2021 A.Borruso
Slide 2: Content
LDPE Market Outlook Content • Introduction: Economy and Covid • World and China outlook for LDPE and EVA • LDPE vs/ EVA • Takeaways A.Borruso IHSMarkit 14.4.2021 Page 2
Slide 3: Economic Outlook
Economic Outlook Light at the end of the tunnel Rebounding in 2021, from the low in 2020, driven by: Real GDP • The USA: strong, in part thanks to the stimulus 2019 2020 2021 2022 • China: Strong in the near term World 2.6 -3.7 5.0 4.2 • EU will suffer another mild recession. USA 2.2 -3.5 5.7 4.1 •
Slide 4: COVID has changed several fundamentals
COVID has changed several fundamentals Consumer buying Shipping/container habits change constraints develop Sustainability Ecommerce & Packaging initiatives pause demand spikes Recycling less New capacity start competitive dates delayed Oil Producers cut production New capacity projects cancelled MD
Slide 5: World Outlook – LDPE
LDPE Market Outlook World Outlook – LDPE A.Borruso IHSMarkit 14.4.2021 Page 5
Slide 6: World LDPE Operating Rate Outlook
LDPE Outlook By 2025, 4.8 Mill tons of announced capacity, and 4.0 mill tons of incremental demand, result in an average 87 % util rate. • Global demand after a moderate growth of 1.3 %/yr in 2019 and 1.6 100 2020, is expected to recover post Mill tons 1.4 World Annual Increments 2020 at 3.2%/yr rat
Slide 7: World LDPE Capacity Additions
World LDPE Capacity Additions Over 4.8 Mill tons by • World announced capacity by 2025 of 4.8 Mill tons; 79% 2025 N.Amer. will be built in NEA and N. America 16% • 2 units in USA: FPC and Louisiana Integr. on stream. CIS 10% • 2 units: Korea and Russia: Hyundai, in 2022 and Novy China M. East Urengo
Slide 8: World: LDPE Supply & Demand
LDPE Market Outlook World: LDPE Supply & Demand • Modest demand growth in 2019 and 2020 at 1.3 40.0 100 %/yr, did not impact on the plant utilization rate, Forecast 90 which is projected to stay above 87 %, driven by 30.0 80 demand growth of 3.2 %/yr to 2025. 70 • Major factors for 2020, Million Met
Slide 9: LDPE Incremental Demand by 2025
LDPE Incremental Demand by 2025 By 2025, 50 % of the 4.0 million tons of LDPE incremental demand will be in China, 11 % in India, and 8% each in SE Asia and N.America, while 12 % in Europe and CIS. Incremental Demand by 2025 3.0 Mill tons S America 4% 2.5 NE Asia x MEAF China NE Asia ex. China 7% 2%
Slide 10: Market Outlook in China: LDPE Supply & Demand
LDPE Market Outlook in China China: LDPE Supply & Demand • Between 2015 and 2020, 1.4 Mill tons of new 15.0 Forecast 100 capacity additions, in China have reduced 90 utilization rates to 91 %. Million Metric Tons • By 2025, despite the 3.0 mill tons of Operating Rate % 80 10.0 70 announced capacity
Slide 11: LDPE Capacity in China
LDPE Capacity in China 3.0 Mill tons Additions by 2025: 1.8 of which EVA capable China LDPE Additions • Of the 15 new units, 9 are designed to 1.4 produce EVA, while 5 are based on autoclave technology. Mill tons 1.2 Sinopec Zhenhai, • A portion of 1.8 out of 3.0 Mill tons of Ningbo 1 new capacity c
Slide 12: LDPE – EVA Capacity Swings in China
LDPE – EVA Capacity Swings in China China – Announced Capacity by 2025 8.0 Mill tons 7.0 Approx 1.8 Mill tons of LDPE/EVA capacity represents 6.0 LDPE/EVA Additions by 2025 approx 70 % of total EVA capacity by 2025 but only 27 % of total LDPE capacity in China. 5.0 LDPE by 2025 4.0 3.0 LDPE - 2020 A
Slide 13: Demand in China
LDPE Demand in China 12 LDPE Demand Breakdown in China 70 • Domestic production has supplied 44 to 50 % of domestic demand, between 2015 and 2020. Production as % of demand 65 10 Demand increased • By 2025, domestic production will contribute up faster than 60 to 65 % of domestic demand. 8 productio
Slide 14: LDPE Trade Flow Analysis
LDPE Market Outlook LDPE Trade Flow Analysis 323 163 40 CIS C.Europe NE Asia 795 883 (316) 740 (336) (443) 1,600 1,551 Indian SC 580 W.Europe (596) (1,892) (2,323) (500) Africa (3,256) N.America (951) (618) 2,938 (698) (848) 3,066 S.America SE Asia 58 2,264 (235) (437) (463) (589) (525) M.East + Net
Slide 15: World Market Outlook – EVA
EVA Market Outlook Ionomers 7% Other Acid Copo 2% 4% Acrylates 10% EVA 77% World Market Outlook – EVA Global LD Copolymers Market Estimate at 5.4 Mill tons, 2020 A.Borruso IHSMarkit 14.4.2021 Page 15
Slide 16: EVA Market Outlook - World
EVA Market Outlook - World By 2025, 2.1 Mill tons of announced capacity and 1.3 mill tons of incremental demand, will result in an average 70 % util rate. World: EVA Copolymer Supply & Demand 9.0 100 • In 2020, strong demand growth in China 8.0 Forecast 90 has (> 5 % over 2019), has compensated 80 m
Slide 17: EVA Market Outlook - China
EVA Market Outlook - China China: EVA Copolymer Supply & Demand 3.0 100 Forecast • With exception of the new Hyunday 90 300 kt/yr unit in Korea, all announced Million Metric Tons Operating Rate % 80 additions will be based in China. 70 2.0 • By 2025, 1.8 mill tons of capacity 60 addition, if entirel
Slide 18: EVA Market: China
EVA Market: China • By 2030, an average demand China Annual Increments growth of 5%/yr, will bring around 1 100 1.0 mill tons of incremental demand. Mill tons Utiliz. Rate % 0.9 90 0.8 80 • Based on the current capacity 0.7 70 announcements, there is no 0.6 60 additional capacity expected until 0.5
Slide 19: EVA Market Outlook - China Demand Breakdown
EVA Market Outlook - China EVA Demand Breakdown in China • During the period 2015-20, domestic 3.5 100 production contributed to supply 35 % of 3 90 demand. 80 • In 2020, net imports were 1,1 Mill tons...up Production as % of demand 2.5 70 from 900 kt in 2015-6. 60 • By 2025, domestic production cou
Slide 20: EVA Imports - China
EVA Imports - China 2020 Imports, 1.1 Mill tons EVA Imports by Origin Others R.of Korea 12% 37% Japan 0.40 1.4 5% China Total – Mill tons Mill tons 1.2 0.30 Singapore 2018 2019 2020 1.0 6% 0.8 Saudi Arabia 0.20 7% 0.6 0.10 0.4 Thailand 0.2 9% 0.00 0.0 Taiwan 24% 5 Net Imports LDPE 4 • 61 % of EVA im
Slide 21: Key takeaways: LDPE
Key takeaways • New consumer habits and ecommerce patterns, sustained demand during 2020-21 COVID impact • Sustainability initiatives, expected to accelerate as post Covid although mitigated by polymer prices. • Large capacity additions (+ 8 Mill tons of LLD, + 11 Mill tons of HD and + 4.8 of LD) wi
Slide 22: Key takeaways: EVA
Key takeaways • EVA market outlook remains solid, unthreatened by factors as VAM availability, or competing materials even with modest threats by POE. • Foam, HMA, film and encapsulants for PV, due to specialized applications, continue to sustain a growth of 5 to 6 %/yr globally. • Despite a strong
Slide 23: I Hope Everything is Clear, any questions?
I Hope Everything is Clear, any questions? Andrea.borruso-external@ihsmarkit.com IHS Chemical Consulting Zurich, Switzerland +41797349232 A.Borruso IHSMarkit 14.4.2021 Page 23
Slide 24: Thank You!
LDPE Market Outlook - Thank You ! IHS Markit Customer Care customercare@ihsmarkit.com Japan +81 3 6262 1887 APAC +604 291 3600 EMEA +44(0) 134 432 8300 AMER +1 800 447-2273 Disclaimer The information contained in this presentation is confidential. Any unauthorized use, disclosure, reproduction, or d
Slide 25: Burckhardt Compression
&, Burckhardt y Compression Compressors for a Lifetime”
Burckhardt Compression Holding — Burckhardt Compression LDPE Webinar 2021 on 6ix