SULPHURIC ACID OUTLOOK CRU COPPER CONFERENCE SULPHURIC ACID SEMINAR APRIL 2016 DR. PETER HARRISSON TEAM LEADER, SULPHUR & SULPHURIC ACID : +44 207 903 2249 :
[email protected]
Presentation Overview
REVIEW OF RECENT TRADE AND PRICES
WHERE AND WHY HAVE PRICE FALLEN SINCE H2 2015
TRADE FLOWS IN 2015
CHILEAN IMPORT TRENDS
THE EMERGENCE OF MEXICAN EXPORTS
WHAT HAS CHANGED IN 2016?
DIVERGENCE OF FORTUNES IN EUROPE AND ASIA
INFLUENCE OF SULPHUR PRICES
M ARKET OUTLOOK FOR 2016 AND BEYOND
E AST ASIA, SOUTH E AST ASIA, SOUTH AMERICA,
CONCLUSIONS 2
Prices Sulphuric acid prices, 2012-2016 CFR NW Europe*
CFR US Gulf
CFR Chile (spot)
CFR Brazil
FOB NW Europe
FOB Japan/ S Korea
150 130 110 90 t / $ D S U70 50 30 10 -10 2012 Data CRU
2013
2014
2015
2016 3
Trade developments in the Atlantic market Imports strong but disruptive exports affect market balance SULPHURIC ACID TRADE 2015 MILLION TONNES CANADA
1%
2.07
EUROPE 5.55
USA 3.52
MEXICO
9%
JAPAN /SOUTH KOREA CHINA
MOROCCO CUBA
0.88
1% 1.17
5%
0.40 1.25
4%
1.34
BRAZIL NAMIBIA
Exports
%
y-o-y change
Data CRU
5.71
2%
INDIA
65%
Imports
16%
0.59
9% 0.14
65%
THAILAND 0.58
16%
1%
CHILE 2.18
3%
4
Chile acid imports Steady decline in acid import volume trend 400
s e n n o t d n a s u o h t
300
2014 2.26 Mt
2015 2.18 Mt
Q1 2014 0.56 Mt
Q2 2014 0.59 Mt
Q3 2014 0.54 Mt
Q4 2014 0.56 Mt
Q1 2015 0.60 Mt
Q2 2015 0.59 Mt
Q3 2015 0.48 Mt
Q4 2015 0.51 Mt
J
A
J
O
J
A
J
O
200
100
0 F
M
M
J
A
S
M
D
2014
Peru Data CRU
Japan
South Korea
F
M
M
J
A
S
N
D
2015
Mexico
ROW
12-month rolling average monthly import t/m 5
Mexico acid exports Increased sales focused on competing for the Americas USA
Chile
Peru
Brazil
Other
Quarterly Exports ('000 tonnes)
200
360
345
340
311
150
s e n n o t 100 n o i l l i m
310
260
254 206
216
210
201
199 177
161
160
160
139 110
50
60
10
0
-40
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D Q1 13
Data CRU
Q2 13
Q3 13
Q4 13
Q1 14
Q2 14
Q3 14
Q4 14
Q1 15
Q2 15
Q3 15
Q4 15 6
Mexican acid export outlook How will El Boleo act in 2016 and beyond? Mexico - sulphur-burnt acid supply and exports
El Boleo - sulphuric acid export forecast
0.6
60
0.6
0.5
s e n n o t 40 0 0 0 ' n o i t c u d o r 20 p r e p p o C
0.5
s e n n o0.4 t n o i l l i m 0.3 n o i t c u0.2 d o r P
0.1
0.0
0 14
15
16
17
18
19
20
Acid Production
Acid Demand
Acid Exports
Copper Production
Data CRU
0.4
s e n n o t 0.3 n o i l l i m
0.2
0.1
0.0 15 16 17 Chile Morocco Total Exports - Basecase
18 19 20 Brazil Other Total Exports - Highcase 7
Presentation Overview
REVIEW OF RECENT TRADE AND PRICES
WHERE AND WHY HAVE PRICE FALLEN SINCE H2 2015
TRADE FLOWS IN 2015
CHILEAN IMPORT TRENDS
THE EMERGENCE OF MEXICAN EXPORTS
WHAT HAS CHANGED IN 2016?
DIVERGENCE OF FORTUNES IN EUROPE AND ASIA
INFLUENCE OF SULPHUR PRICES
M ARKET OUTLOOK FOR 2016 AND BEYOND
E AST ASIA, SOUTH E AST ASIA, SOUTH AMERICA,
CONCLUSIONS 8
Out of Sulphur and into Acid What was the incentive to switch?
Back to basics Elemental Sulphur
Sulphur Burner
1 tonne
Sulphuric Acid
3 tonnes
Comparative pricing
Sulphur raw material value /tonne sulphuric acid = Sulphur price/3
If sulphuric acid price < sulphur raw material value there is incentive to switch
Power credits, logistical issues, contracts can prevent switching but...
Substitution only feasible if sulphuric acid price < sulphur raw material value
Data CRU
9
Out of Sulphur and into Acid What is the incentive to switch? Contained S price differential
Sulphur CFR
India 200 160 120 t / $ 80 S U 40 0 -40 2013 200 160 120 t / $ 80 S U 40 0 -40 2013 Data CRU
2014
2015
2016
200 160 t / 120 $ S 80 U 40 0 -40 2013
Sulphuric Acid CFR
China
2014
SE Asia
2014
2015
2015
2016
USA
2016
200 160 120 t / $ 80 S U 40 0 -40 2013
2014
2015
2016 10
Presentation Overview
REVIEW OF RECENT TRADE AND PRICES
WHERE AND WHY HAVE PRICE FALLEN SINCE H2 2015
TRADE FLOWS IN 2015
CHILEAN IMPORT TRENDS
THE EMERGENCE OF MEXICAN EXPORTS
WHAT HAS CHANGED IN 2016?
DIVERGENCE OF FORTUNES IN EUROPE AND ASIA
INFLUENCE OF SULPHUR PRICES
M ARKET OUTLOOK FOR 2016 AND BEYOND
E AST ASIA, SOUTH E AST ASIA, SOUTH AMERICA,
CONCLUSIONS 11
Acid imports trends in 2016 Demand weakness sets in Imports 2015
USA 3.45
Imports 2016
Europe
3.25
5.55
China
Morocco
Cuba 0.40
5.06
0.88
0.23
1.17
India
0.75
1.24
Brazil 0.59
Chile 2.17
0.71
1.10
Philippines
1.00
Indonesia Namibia 0.14
0.37
1.76
1.63
0.56
0.15
2.10
million tonnes Data – CRU
12
Asian Imports respond to oversupply But exports also increase with growth in the Philippines Indonesia Imports Philippines Exports 2.0
s 0.0 e n n o t n o i l l i m -2.0
-0.39
-0.41
0.40 -0.37
2013
2014
2015
Philippines Imports
Other SE Asia Imports
Other Exports
Net Trade
0.70
0.80
0.90
0.90
0.90
-0.56
-0.72
-0.81
-0.66
-0.46
2016
2017
2018
2019
2020
-4.0 Data CRU
13
Acid Exports Emergence of new exporters to challenge market structure Major acid exporters - total export forecast
Major acid exporters, y-o-y change 2015
2016
2017
Mexico
Canada
Japan/S Korea
Philippines
Peru
Europe
6.0
Philippines Iran Mexico
s e 4.0 n n o t n o i l l i m
Peru Bulgaria Canada
2.0
Japan South Korea -0.50 Data CRU
-0.25
0.25 million tonnes
0.50
0.0
10
11
12
13
14
15
16
17
18
19
20 14
Acid imports Change in the order of the world Major acid importers - total import forecast
Major acid importers, y-o-y change 2015
2016
2017
Chile
USA
Morocco
Philippines
India
China
Philippines
3.5
Indonesia
3.0
Brazil
s 2.5 e n n o t n 2.0 o i l l i m
Chile Cuba
Brazil
1.5
India 1.0 Morocco 0.5 China -0.50 Data CRU
-0.25
0.25 million tonnes
0.50
0.0
10
11
12
13
14
15
16
17
18
19
20 15
Chile acid balance forecast Ex-regional balance stable for remainder of the decade Chile/Peru – Supply and Demand 10.0
5.0 s e n n o t 0.0 n o i l l i m
Chile imports and forecast 3.5
80%
3.0
70%
2.5
60%
s e n n2.0 o t n o1.5 i l l i m
-5.0
-10.0 10 11 12 13 14 15 16 17 18 19 20 Chile Supply Chile Demand Data CRU
Peru Supply Peru demand
50% 40%
1.0
30%
0.5
20%
0.0
10% 10 11 12 13 14 15 16 17 18 19 20
Peru
Ex-regional imports
Ex-regional % share 16
Conclusions New markets must be found RECENT M ARKET DEVELOPMENTS
2015 was a good year for imports but supply availability has been stronger
Weakness is more severe in Asia but Europe is not immune
SULPHUR
Over supply and weak prices will place pressure on the “Value" of Acid
Logistics costs will remain important in setting acid market prices
FORECAST Supply availability increasing, major effect in Asia in 2016
But demand also decline in existing markets (Chile, Cuba, Namibia, Morocco)
New markets are needed but the question is from where?
Data CRU
17
