Paraffin market outlook after 2009 world crisis

Transcription

1 12ª Latin American candle manufactures conference and trade show Medellin Colombia June th, 2009 Paraffin market outlook after 2009 world crisis

2 a moment to reflection... The crisis We do not pretend to change the things, if we always do the same. The crisis is the best thing can happen among people and countries, cause the crisis brings us evolution. The creativity is born of the anguish, as the day is born of the dark night. It is in the crisis that the inventions, the discoveries and the big strategies have been born. Who overcomes the crisis, overcomes itself without staying "overcomed." Who attributes to the crisis their failures and penuries, violent their own talent and respects more the problems then the solutions. The real crisis, is the crisis of the incompetence. The inconvenience of people and countries, is the hope of finding easy exits and solutions. Without crisis there are not challenges, without challenges, the life is a routine, a slow agony. Without crisis there is no honor. In the crisis that blows up the best in each of us. Talk about crisis is to promote it, and to be quiet on her is to exalt the conformism. Instead of that let s work hard. Let us put an end on this threaten crisis that is the tragedy of no wanting to fight to overcome it Albert Einstein

3 12ª Latin American candle manufactures conference and trade show Medellin Colombia June th, 2009 This is the Chinese ideogram to the word crisis : danger crisis opportunity solution

4 12ª Latin American candle manufactures conference and trade show Medellin Colombia June th, 2009

5 we present the marketing... and the marketing thinks : it is smart... it is astute... it is fast... wants to take advantage... that knows everything...

6 we present the supplier... but the supplier : is so smart or smarter... is so astute or more... is so fast or faster... also wants to take advantage... knows everything and something else... manufacture the raw material...

7 12ª Latin American candle manufactures conference and trade show Medellin Colombia June th, 2009 a little bit about China...

8 Russia states in China Kazakhstan Heilongjiang Mongolia Jilin Kyrgyzstan autonomus state of Xinjiang Gansu Inner Mongólia Ningxia Hebei Beijing Hebei Sahndong Liaoning Liaodong Bay Tianjing Bohai sea Yellow sea North Korea South Korea Qinghai Nepal Tibet Sichuan Shaanxi Chongqing Henan Hubei Jiangsu Anhui Zhejiang Shangai Bhutan Guizhou Hunan Jiangxi Fujian India Ba ngladesh Myanmar Yunnan Vietnam Guangxi Zhuang Guangdong Hong Kong Taiwan Thailand Laos Hainan Philippines

9 Russia Crude basins in China Kazakhstan Daqing central Basin Dzungaria (Junggar) Basin Mongolia Kyrgyzstan Tar Im Basin Nepal Turf An Basin Qaidam (Tsaidam) Basin Tibet Plato Basin Chiu-ch uan Basin Ordos Basin Szechwan Basin Tung Ting Basin Hsiang Fan Basin Po Hai Basin Sungliao Basin Yangtze Basin Liaohe Basin Korea Bay Basin Yellow Sea Basin North Korea South Korea East China Sea Basin Bhutan India Ba ngladesh Kwangsi-Kweichow sineclyse Taiwan Myanmar Thailand Laos Vietnam Tonkin Basin South China Sea Basin Philippines

10 China crude and the paraffins crude basins Chiu-Ch uan Dazing central Dzungaria (Junggar) East China Sea Hsiang Fan Korea Bay Kwangsi Kweichow Liaohe Ordos Po Hai Qaidam (Tsaidam) South China Sea Sungliao Szechwan Tar Im Tibet Plato Tonkin Tung Ting Turf An Yangtze Yellow Sea location Yumen area Heilongjiang Province Xinjiang Autonomous Province Off Shore Henan Province China/Korea Sea Yunnan/Guizhou Provinces Liaoning Province Inner Mongolia Po Hai Gulf Xinjiang Autonomous Province Off Shore Bohai Sea Sichuan/Chongqing Provinces Xinjiang Autonomous Province Tibet Tonkin Gulf Henan/Hubei Provinces Xinjiang Autonomous Province Northeastern China China/Korea Sea Beep! Beep!

11 Russia Crude fields in China Kazakhstan Daqing Field Kyrgyzstan Tahe Field Karamay Field Urumqi Field Leng Hu Field Yumen Field Mongolia Dadang Field Shengli Field Ta ching Field Jilin Field Shenbei Field North Korea South Korea Changqing Field Henan Field Zhongyuan Field Jiangsu Field off shore crude Nepal off shore crude Bhutan India Ba ngladesh Taiwan Myanmar Vietnam off shore crude Thailand Laos Philippines

12 China crude and the paraffins crude field location paraffin content Shenbei Liaohe Basin 45,0% Ta ching Bohai sea 35,0% Daquing Heilongjiang 25,0% Beep! Beep! Henan Henan 24,8% Shengli Shandong 15,0% Mailing Liaohe Basin 14,5% Xinglongtai (*) Liaohe Basin 8,0% Dujiatai (*) Liaohe Basin 8,0% Haiwaihe Liaohe Basin 3,5% (*) = sandstone bad

13 China crude and the paraffins crude field location paraffin content Shenbei Liaohe Basin 45,0% Ta ching Bohai sea 35,0% Daquing Heilongjiang 25,0% crude paraffin s content Henan Henan 24,8% Shengli Shandong 15,0% Mailing Liaohe Basin 14,5% Xinglongtai (*) Liaohe Basin 8,0% Dujiatai (*) Liaohe Basin 8,0% Haiwaihe Liaohe Basin 3,5% (*) = sandstone bad Beep! Beep! paraffin content (%)

14 China crude and the paraffins China crude main characteristics : the paraffin content in the China fields is a headache to the Chinese refineries, cause there is to much paraffin inside. at the room temperature the china's crude is similar than a soap of brown color. the paraffin content is in the range of 16% to 20%. a part of this paraffin is moved away in the own filed while another part is moved away in the refineries. a part of this paraffin is used as heat fuel to burn at the ovens of Chinese industries. Beep! Beep!

15 China crude and the paraffins manufactures Ministry of Petroleum Industry of the People s Republic of China start up : 1955 responsible to the supervision of exploration and development of Chinese crude and gas sources China National Petroleum Corporation

16 China crude and the paraffins manufactures CNPC China National Petroleum Corporation start up : 1988 (PetroChina) start up : 1999 responsible for the Chinese crude and gas in the Chinese territory : exploration y of crude & gas refining & chemicals derivatives engineering and projects for the raw one and gas wholesaler of those derived petrochemical SINOPEC China Petroleum & Chemical Corporation start up : 2000 responsible for the Chinese crude and gas in the Chinese territory : exploration y of crude & gas refining & chemicals derivatives (*) = their crude fields are located at western, center and south are of China. CNOOC China National Offshore Oil Corporation start up : 1982 responsible for the off shore crude & gas in China

17 Asia Pacific paraffin marketing Russia 143 Mio. hab. percapita income 0,50 kg p/p Japan 128 Mio. hab. percapita income 0,60 kg p/p Mio. hab. percapita income 0,64 kg p/p paraffin percapita income Europe USA Mexico Argentina Brazil 2,80 p/p 2,50 p/p 2,20 p/p 0,90 p/p 0,70 p/p Mio. hab. percapita income 0,13 kg p/p Thailand 64 Mio. hab. percapita income 0,50 kg p/p 20 Mio. hab. pertcapita income 1,80 kg p/p

18 Chinese paraffin marketing there is a very strong inner marketing in China. this marketing is growing up following the China s developments. those marketings have been growing to much, due the great development in China and Asia/Pacífic area. the base oils group I are in a price level very similar than paraffins. There is a growing demand to fuels in China & Asia/Pacífic. the Chinese calendar is a a little bit different of Latin calendar. ex : Chinese new years day, candle marketing seasonality, death people day, etc...

19 El mercado de las parafinas en China The Chinese refineries sometimes act through dealers that are strong in the marketing, buying and selling paraffins to inner and to export marketing. the best prices offered are mainly : prices under contracts prices to big volumes prices FOB Chinese refinery or main port that means, those are not the prices we will pay for... mercado interno refineria China dealers traders exportación traders y dealers n...

20 El mercado de las parafinas en China the most important paraffin refineries in China, Fushun, Dailan y Daqing are located in the northeastern of China and works as north hemisphere refineries mainly due the Dalian s port that is very important in the export business of Chinese paraffins at this area.

21 Russia refineries in China Atasu Angarsk Kazakhstan Karamay Mongolia Ulam Batar Daqing Heilongjiang Bishkek Kyrgyzstan Dushanzi autonomus state of Xinjiang Urumqi Turpan Korla Yumen Golmud Gansu Ningxia Liaoning Fushun Huludao (Jinxi) Panjin North Beijing Korea Caofeidian Beijing Dalian Yanshan Hebei Tianjin Cangzhou Hebei Sahndong Zibo Qingdao Inner Mongólia Jinan Jilin Jilin South Korea Delhi Nepal India Bold = states no Bold = cities = pipeline = pipeline (forecast) = shipping terminal = crude field Tibet Lhasa Bhutan Ba ngladesh = important cities = crude refineries (26) = crude refineries (19) with paraffins (45) Qinghai Myanmar Thailand Pengzhou Yunnan Sichuan Lanzhou Laos Nanchong Vietnam Shaanxi Chongqing Guizhou Guangxi Zhuang Qinzhou Beihai Louyang Henan Nanyang Hubei Jingmen Jingzhou Hainan Yueyang Hunan Maoming Anhui Shanghai / Gaoqiao Anqing Huzhou Zhoushan Wuhan Ningbo Zhejiang Juijiang Taizhou Jiangxi Jiangsu Nanjing Quanzhou Fujian Guangzhou Guangdong Huizhou Hong Kong Philippines Taipei Taiwan Kaoshiang

22 12ª Latin American candle manufactures conference and trade show Medellin Colombia June th, 2009 The Chinese crude and paraffin...

23 Chinese refineries refinery company city state paraffin + slack capacity (1.000 Tons/year) % of world wax 1 Fushun PC PetroChina Fushun Liaoning 600 9,8% 2 Dailain PC PetroChina Dailian Liaoning 180 2,9% 3 Gaoqiao PC SINOPEC Shangai Shangai 150 2,5% 4 Louyang PC PetroChina Louyang Henan 150 2,5% 5 Shangai PC SINOPEC Shangai Shangai 110 1,8% 6 Jingmen PC PetroChina Jingmen Hubei 105 1,8% 7 Daqing PC PetroChina Daqing Heliongjiang 100 1,6% 8 Maoming PC SINOPEC Maoming Guangdong 100 1,6% 9 Yumen refinery PetroChina Yumen Gansu 65 1,0% 10 Yanshan PC Petrochina Fangshan Beijing 60 1,0% Total China Top 10 ~ Ton/month ,5% others (China + Asia/Pacific) ,5% Total Asia/Pacific ~ Ton/month ,0% Total world ~ Ton/month ,0%

24 Chinese paraffins World wax capacity x Tons % to 96% of capacity break even point + total world wax capacity 1/12 paraffin wax world capacity (refineries maintaining) world wax world wax (forecast) 7,0% to 7,5% of world capacity

25 Chinese paraffins China paraffin wax Tons in the meantime of the grew up in an average of ~ 10,6% per year in the meantime of the grew up in an average of < 1,0% al año why this kind of evolution...???

26 Chinese crude & paraffins China : crude x paraffins Tons Tons paraffin Chinese crude correlation grade ~ 95%

27 Chinese crude & paraffins China petroleum seasonality average (35 years) 1,04 1,03 1,02 1,01 1,00 0,99 0,98 0,97 ene feb mar apr mai jun jul ago sep oct nov dic the end of the year is the top Chinese crude. suppose to be the highest inventories season.

28 12ª Latin American candle manufactures conference and trade show Medellin Colombia June th, 2009 China paraffin prices...

29 Chinese crude & paraffins China paraffin price evolution x crude oil FOB main China harbour (bulk) U$/Ton China paraffin Saudi light crude Asia Base Oil group I

30 Chinese crude & paraffins gas at 400 o C ( C 3 e C 4 ) gasoline, fuels, solvents 40 o C to 140 o C ( C 5 a C 8 ) nafta, raw material to chemicals, plástics 140 o C to 175 o C crude oil kerosene, jet fuels, ilumination 175 o C to 235 o C light gasoil, fuels, diesel 235 o C to 305 o C heavy gasoil, navy fuels & industry 305 o C to 400 o C lubes & waxes 400 o C to 510 o C bottoms (pitch, asfalt, betun, etc...) > 510 o C????

31 timeline... 1 year in perspective with Chinese paraffins... exportations paraffin prices FOB China port U$/Ton dealers total world wax capacity ~ Ton/month inventories % of world wax capacity

32 timeline... lead time : 2008 may...

33 timeline... U$ U$ U$ Jinxi back to T/m Fushun back to operation the unit n o 2 (reduced) T/m Nanyang Chemicals enhance T/m May June July 2008 Fushun stop the unit n o 2 (maintaining) T/m Nanyang Chemicals reduce T/m Jinxi stop the unit (technical problems) T/m Jinan reduce the 500 T/m Dalian reduce the T/m Jinan stop T/m initial capacity % 94,8% 95,5%

34 timeline... U$ Yanshan back to operation T/m Jinan back to operation T/m U$ U$ Maoming slow down in 50% T/m Gaoqiao up in T/m July 2008 Nanyang Chemicals reduce T/m Maoming reduce in 50% T/m Gaoqiao reduce T/m August 2008 Daqing PC stop the T/m Dalian reduce T/m Jinan stop the T/m Nanyang Chemicals reduce 600 T/m September ,5% ,8% ,8%

35 timeline... U$ Dalian enhance in T/m Jinan back to T/m hurricane Ike in USA U$ Daqing PC back to T/m 10 Chinese paraffins prices down in NA & SA U$ September 2008 Maoming reduce in 50% T/m 15 Petramina Cilacap stop the (slack wax) T/m Lanzhou reduce 500 T/m October Jinan reduce. 500 T/m Maoming stop 100% of (high inventories) T/m Nanyang Chemicals stop the (high inventories) T/m 24 November ,8% 91,7% 91,8%

36 timeline... U$ USA starts the antidumping process against Chinese paraffins Gaoqiao enhance the T/m 10 Maoming back to T/m Nanyang Chemicals back to T/m U$ candle marketing melts down in world Gaoqiao enhance T/m Daqing Refinery enhance T/m U$ November 2008 Daqing PC reduce T/m Daqing Refinery reduce T/m 15 December T/m T/m Yanshan stop T/m Jinan stop T/m Maoming stop T/m Dalian reduce in T/m Daqing PC reduce T/m enero 2009 Jinxi stop T/m Lanzhou stop T/m ,8% 89,8% 86,7%

37 timeline... spring in China candle marketing in western China turns better U$ 870 Daqing PC enhance T/m dealers more actives China new years U$ 870 Daqing Refinery enhance T/m Dalian enhance T/m Yanshan back to operation T/m Maoming back to produce T/m IRPC back to produce T/m U$ January 2009 Taizhou reduce T/m 06 Gaoqiao reduce T/m IRPC stop (maintaining) T/m February 2009 Digboi has problems with it s (micro wax) 125 T/m March ,7% ,1% 89,6%

38 timeline... U$ dealers been actives Taizhou sube la producción T/m Jinan back to work T/m Yanshan more T/m Maoming enhance T/m U$ Gaoqiao grew up T/m Yumen stop (no RM) T/m Lanzhou back to produce T/m mercado de veladoras en china peora U$ T/m March 2009 Fushun reduce the Dalian baja su producción T/m Yumen reduce (no RM) T/m abril Taizhou slow down 800 T/m Fushun reduce the T/m mayo T/m high inventories (30 60 days) ,6% 86,3% 86%

39 12ª Latin American candle manufactures conference and trade show Medellin Colombia June th, 2009 break please! Beep! Beep!

40 Chinese refineries,,,,... Total capacity (Ton/m) Nameplate Capacity (Ton/month) may jun jul aug sep oct nov dec jan feb mar apr Dalian PC Daqing PC out out Daqing Refinery Dushanzi PC Fushun PC Gaoqiao PC Jinan PC out out out out Jingmen PC Jinxi PC out out out out out out Lanzhou Refinery out out out out 500 Maoming PC out out out Nanchong Refinery out out out out out out out out out out out out Nanyang PC out Taizhou PC Yanshan PC out out out out Yumen Refinery out

41 Chinese refineries country Capacity (Ton/m) may jun jul aug sep oct nov dec jan feb mar apr China % China spreadsheet 76% 81% 74% 65% 69% 74% 78% 64% 65% 73% 62% 49% ,,,,... crisis... Chinese petroleum seasonality

42 Chinese refineries in world marketing Capacidad mundial (KTon/mensuales) countries may jun jul ago set oct nov dic ene feb mar apr may Σ 510,00 483,80 487,50 478,65 463,35 467,60 468,30 458,10 442,10 439,20 456,97 440,27 438,67 100% 94,8% 95,5% 93,8% 90,8% 91,7% 91,8% 89,8% 86,7% 86,1% 89,6% 86,3% 86,0% ---- (5,2%) (4,5%) (6,2%) (9,2%) (8,3%) (8,2%) (10,2%) (13,3%) (13,9%) (10,4%) (13,7%) (14,0%),,,,... 1/12 paraffin wax world capacity (mantenimiento en las refinerias) 7,0% to 7,5% of world capacity

43 12ª Latin American candle manufactures conference and trade show Medellin Colombia June th, 2009 Beep! Beep!

44 to be attentive to the marketing movements... country quantity of movements detected in 1 year... China 61 India 01 Indonésia 02 Thailand 02 China approves stimulus plan for petrochemical industry The Chinese government approved in February a stimulus plan for the petrochemical sector, focusing on industrial restructuring and reducing excess capacity...

45 to be attentive to the marketing movements... QuiMax Monitor - News Alert ( Friday, February 27, 2009 BLOOMBERG CHINA S STIMULUS PLAN EXCLUDES WINDFALL TAX CHANGES China s stimulus plan for the petrochemical and refining industry will exclude changes to windfall taxes levied on state oil producers, the nation s top economic policy maker said. The government will unveil details of the stimulus package after mid-march, Chen Bin, director of the Industry Department of the National Development and Reform Commission, said in Beijing today. China s State Council, or Cabinet, approved a stimulus plan for the industry to help spur growth in the slowing economy earlier this month. Chinese oil producers pay a tax on revenue from crude sold for more than $40 a barrel under a levy introduced in March A proposal submitted by China Petroleum and Chemical Industry Association recommends raising the trigger level for the tax to help oil producers including PetroChina Co. and China Petroleum and Chemical Corp., Wang Xiaofeng, deputy head of industry development from the group said Feb. 19. China may raise the trigger level of the tax levied on oil producers revenue to $60 a barrel from $40, China Business News reported on Feb. 10, citing an unidentified industry expert. Chen didn t say if the Cabinet rejected the proposed changes. PetroChina paid 47.8 billion yuan ($7 billion) in windfall taxes in the first six months of last year, the company said in August. Net income was 53.6 billion yuan for the period. The government will seek to boost domestic demand, increase stockpiles of oil products, improve tax policy and expand loans for petrochemical companies, the Chinese government said Feb. 19. PetroChina, China Petroleum and Cnooc Ltd. are the nation s three biggest oil companies.

46 to be attentive to the marketing movements... (March 26, 2009) China announces new oil pricing mechanism China's new oil pricing mechanism will enable the government to make more frequent price adjustments based on global crude fluctuations, a senior economic planner said. China has raised gasoline prices by 4.6% and diesel fuel prices by 3.2%, saying the rise reflected a recent sustained increase in international crude oil prices. This was the first increase in domestic fuel prices since December when China introduced a "perfected" fuel pricing system. The government will further perfect the system and management while various market players should adapt themselves to the frequency of price ups and downs, the National Development and Reform Commission (NDRC) said.

47 to be attentive to the marketing movements... (March 30/ April 14, 2009) State oil giants raise product prices in March PetroChina Co. Ltd. and China Petroleum and Chemical Corp. (Sinopec) jointly pushed up domestic refined oil wholesale prices in March, stimulating the arbitrage from diesel oil imports. China's gasoline and diesel imports will largely increase in May. China has turned into a diesel oil net exporter since October 2008, but the domestic refined oil sales market is still weak. The increase is the first under the government's new pricing system which aims to better track international crude oil prices, in an effort to protect the profit margins of domestic refiners.

48 to be attentive to the marketing movements...

49 What can we do... to be attentive to the marketing changes. plan your business today. forecast your business in the middle & long time. to be opened to new technologies in raw materials. to be opened to new suppliers and their suggestions. all new developments are investments not a costs. who buys price never buy solutions. the wax s price is just a part of total costs. otherwise...

50 12ª Latin American candle manufactures conference and trade show Medellin Colombia June th, 2009

51 12ª Latin American candle manufactures conference and trade show Medellin Colombia June th, 2009 Thanks for your attention!!

52 12ª Latin American candle manufactures conference and trade show Medellin Colombia June th, 2009 But... don t think i m death!!

53 12ª Latin American candle manufactures conference and trade show Medellin Colombia June th, 2009