Asia Refining Aromatics Challenges: the 5 year outlook 2019 Report

Insight 01 October 2019

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*Please note that this report only includes an Excel data file if this is indicated in "What's included" below

What’s inside this report?

Two major paraxylene investments are due to come online in China between 2020 and 2023.These projects will add capacity to the market on an overwhelming scale.

This analysis explores the likely impact of these investments on gasoline and naphtha balances across the region.

What key questions does this report answer?

What are the implications of these new PX investments on gasoline and naphtha balances across the region? And what will the knock-on impact on refineries be?
Will the new China refineries be able to source sufficient heavy oil to suit their configuration – and what is the impact on supply and demand balance if not?
With the uncertainty surrounding the IMO regulations, are there scenarios for bunker fuels that could impact asset competitiveness?

Report summary

In this 106 page report, we anticipate that over the period 2020-2023, the major private Paraxylene (PX) investments in China (Heng Li and Zhejiang Petrochemical) are complete adding over 9 Mt of capacity. This wave of investment outpaces robust demand growth for the polyester chain and pushes Asia PX utilisation down from the mid to high 80's over the next few years down to the high '70s by the middle of the next decade. With a challenge at this scale, the aromatics scenario has knock-on implications for gasoline and naphtha balances across the region. The potential impact on additional gasoline supply for example would range from 100-150 kb/d for both South Korea and Japan by 2025. In this report we will review the potential implications of this imbalance and which aspects of refining will be impacted.