Whither Demand? - Growth In Prospect Tecnon OrbiChem Marketing Seminar at APIC 2015 Seoul, 7 May 2015 Roger Lee
WORLD GDP GROWTH 1995-2020 % AAGR 5 4 3 Actual Forecast 2008 Current Forecast 2 1 0-1 -2 1995 2000 2005 2010 2015 2020 Source: World Bank & Probe Economics
WORLD GDP GROWTH 1995-2020 (Billion Constant 2000 Dollars) 60.0 Actual 50.0 2008 Forecast Current Forecast 40.0 30.0 20.0 1995 2000 2005 2010 2015 2020 Source: World Bank & Probe Economics
WORLD GDP GROWTH BY REGION 1995-2007 (Billion Constant 2005 Dollars) 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 1995 1997 1999 2001 2003 2005 2007 Source: World Bank & Probe Economics
WORLD GDP GROWTH BY REGION 2008-2014 (Billion Constant 2005 Dollars) 6,000 World 4,000 2,000 0-2,000 2008 2009 2010 2011 2012 2013 2014 Source: World Bank & Probe Economics
WORLD PETROCHEMICAL CONSUMPTION vs GDP 1995-2007 & 2008-2014 Consumption (Million Tons) 5 4 3 2 Phthalic Anhydride Orthoxylene Acrylic Acid Adipic Acid Adiponitrile Maleic Anhydride 1995-2007 1 2008-2014 0 25000 30000 35000 40000 45000 GDP (Billion 2000 $)
WORLD PETROCHEMICAL CONSUMPTION vs GDP 1995-2007 & 2008-2014 Consumption (Million Tons) 50 40 30 VCM PTA Paraxylene MEG Acetic Acid Caprolactam 20 10 1995-2007 2008-2014 0 25000 30000 35000 40000 45000 GDP (Billion 2000 $)
WORLD PHTHALIC ANHYDRIDE CONSUMPTION Million Tons 6.0 5.0 4.0 3.0 2.0 1.0 2008 Forecast 0.0 1996 2000 2004 2008 2012 2016 2020
WORLD ADIPIC ACID CONSUMPTION Million Tons 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 2008 Forecast 0.0 1995 2000 2005 2010 2015 2020
WORLD ACRYLIC ACID CONSUMPTION Million Tons 7.0 6.0 5.0 4.0 3.0 2.0 1.0 2008 Forecast 0.0 1995 2000 2005 2010 2015 2020
WORLD MALEIC ANHYDRIDE CONSUMPTION Million Tons 2.0 1.5 2008 Forecast 1.0 0.5 0.0 1995 2000 2005 2010 2015 2020
WORLD VCM CONSUMPTION Million Tons 60.0 50.0 40.0 30.0 20.0 10.0 2008 Forecast 0.0 1995 2000 2005 2010 2015 2020
WORLD PARAXYLENE CONSUMPTION Million Tons 50.0 45.0 40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 2008 Forecast 0.0 1995 2000 2005 2010 2015 2020
WORLD MONOETHYLENE GLYCOL CONSUMPTION Million Tons 40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 2008 Forecast 0.0 1995 2000 2005 2010 2015 2020
WORLD CAPROLACTAM CONSUMPTION Million Tons 6.0 5.0 4.0 3.0 2.0 1.0 2008 Forecast 0.0 1995 2000 2005 2010 2015 2020
WORLD ACETIC ACID CONSUMPTION Million Tons 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 2008 Forecast 0.0 1995 2000 2005 2010 2015 2020
GDP vs CONSUMPTION GROWTH SHARE 1995-2007 VCM MEG Paraxylene Acetic Acid Acrylic Acid Phthalic Anhydride Caprolactam Adipic Acid Maleic Anhydride GDP N & S America 35% 13% 19% -6% -1% 20% 6% 4% 3% 15% Europe 29% 5% 30% 6% -10% 18% 12% 3% 5% 12% 8% 10% 3% -2% 12% 4% 2% 3% 3% 1% 9% 5% 5% 5% 15% 8% 16% 26% 18% 13% 7% 5% 8% 32% 0% 14% 17% 23% 3% 5% 12% 62% 36% 65% 85% 36% 47% 41% 68% 54% Asia 29% 71% 49% 102% 99% 58% 80% 90% 88% 72% World 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Source: World Bank, Probe Economics & Tecnon OrbiChem
GDP vs CONSUMPTION GROWTH SHARE 2008-2014 VCM MEG Paraxylene Acetic Acid Acrylic Acid Phthalic Anhydride Caprolactam Adipic Acid Maleic Anhydride GDP N & S America 27% 10% -402% -12% -12% 9% 7% 4% 6% 12% Europe 4% -1% -196% 18% -32% 1% -11% 7% 4% -8% 11% 7% 15% 0% 13% 9% 9% 1% 8% 9% 19% 6% 66% 3% 29% 9% 18% 4% 13% 4% 6% -14% 72% -5% -38% 20% 2% -24% 1% 0% 32% 93% 545% 96% 141% 52% 74% 108% 68% 83% Asia 57% 84% 683% 94% 132% 81% 94% 88% 83% 87% World 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Source: World Bank, Probe Economics & Tecnon OrbiChem
CONCLUSIONS GDP growth stalled for 3 years as a result of the 2008 financial crisis. World GDP growth is still at least 0.5% below that forecast in early 2008. Two thirds of global GDP growth since 2008 has been in the world outside the Americas and Europe, compared with one third beforehand. Following the 2007-2009 hiatus, many petrochemicals have resumed growth at or above previous GDP multipliers, but some have not. For the products considered here, over 80% of consumption growth since 2008 has been in Asia. For some products the proportion is much higher. Europe has suffered most, contributing only 4% to global GDP and recording losses in most categories of consumption growth since 2008. With entering a New Normal period of lower growth, Europe struggling to recover and crude oil price uncertainty putting a damper on investment, it is difficult to see a return to pre-crisis spending levels occurring any time soon.
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