20141223091647

INDUSTRY WATCH
Petrochemicals
Tuesday, December 23, 2014
Petrochemical price monitor

Chaipat Thanawattano
Product prices for olefins chain still slipping WoW. PE/PP product spreads
over naphtha were hit by lower product prices (-2.4% to -12.2% WoW), especially
HDPE. Still, average HDPE price remained the best performer in 4Q14, falling 7.8%
QoQ vs. >8% of other products. Product spreads declined 8.8% WoW on average as
naphtha price eased by 6% WoW to a 5-year low of only US$421/t. Among nonintegrated producers, LDPE did best, with spread expanding 6.8% WoW while
others displayed a sharp decline WoW.
Securities Fundamental
Investment Analyst
(66-2) 949-1005
chaipat.thanawattano@scb.co.th
Buying interest on BZ is getting worse. Aromatics product prices continued to

tumble 4.3-10.8% WoW, especially BZ, which sank to a 5-year low of only US$640/t
on poor buying sentiment globally. BZ-naphtha spread narrowed 18.7% WoW to a
5-year low of US$219/t, less than half the 3Q14 average. Near-term outlook
remains bearish with weakening feedstock price and high inventory of
downstream polystyrene (PS) regionally. Demand for PX was also weak in its low
season, pulling price and spread down 4.3% and 2.5% WoW.
PET/PTA spread continued to sour on sluggish demand. Integrated PET/PTA
spread fell 9.3% WoW to US$306/t as PTA spread declined a sharp 16.6% WoW
from bearish demand despite a 4.3-5% Wow fall in feedstock cost. The sluggish
demand for downstream products PET and polyester may hang around awhile as
buyers remain reluctant to rebuild inventory before the end of the year. Polyester
price is also being pressured by the decline in cotton price of 7.1% QoQ in 4Q14.
Investment view: The petrochemical sector index rose 8.5% WoW after a sharp fall
last week, also outperforming the market (+3.9% WoW). Key driver on the upside was
IVL (+15.8% WoW) despite the weakening outlook for the PET/polyester chain in 4Q14
and 2015 due to a regional supply glut for PET and PTA. PTTGC share price also rose
7.8% WoW reflecting improving market sentiment on the sector and market optimism
on prospective earnings from its olefins chain.
Figure 1: Petrochemical price update
Price
Naphtha Singapore Spot FOB
Ethylene, Far East CFR SE Asia $/MT
Propylene (C), Spot CFR F/E U$/MT
Polye HDPE Inj, South East Asia U$/MT
Polye LDPE-Film, Spot S.E Asia U$/MT
Polye LLDPE Film, F/E Spot SE Asia $/MT
PP Film, Spot South East Asia U$/MT
Related stocks
Para-Xylene CFR Chin M. Por Spot $/MT
Benzene, Far East CFR Spot F/E U$/MT
Related stocks
MEG, Far East Spot CFR F/E U$/MT
PTA CFR South East Asia
PET(Fibre Grade)A/P Spot CFR NEA $/MT
Related stocks
ABS Asia Pac. India Spot CFR U$/MT
Polystyrene-GP, Spot Hong Kong U$/MT
Related stocks
PVC, Spot South East Asia U$/MT
Related stocks
Product spread
Ethylene - naphtha
Propylene - naphtha
HDPE - naphtha
LDPE - naphtha
LDPE - Ethylene
LLDPE - naphtha
PP - naphtha
PX - naphtha
BZ - naphtha
MEG - Ethylene
PTA - PX
PET spread
Integrated PET/PTA spread
ABS spread
PS spread
PVC - ethylene
Current
19-Dec-14
52-week
High/Low
-1W
-1M
421
980
615
1,185
1,215
1,160
1,240
897/421
1,495/980
1,503/615
1,620/1,185
1,680/1,215
1,615/1,160
1,625/1,240
-6.0%
-4.4%
-18.5%
-12.2%
-2.4%
-10.4%
-6.4%
-29.6%
-19.7%
-45.6%
-20.5%
-17.9%
-21.4%
-15.9%
833
640
1,488/833
1,385/640
-4.3%
-10.8%
-20.4%
-35.8%
758
645
970
1,035/758
1,040/645
1,313/970
-5.0%
-6.5%
-5.8%
-13.3%
-19.9%
-10.2%
1,950/1,590
1,815/1,220
0.0%
-2.8%
-9.4%
-15.9%
1,070/790
-12.2%
-13.7%
786/528
686/194
956/638
956/709
275/93
946/673
956/658
612/304
535/219
162/-58
184/53
253/121
359/190
1,251/1,070
430/214
388/249
-3.1%
-36.8%
-15.3%
-0.4%
6.8%
-12.8%
-6.6%
-2.5%
-18.7%
-7.5%
-16.6%
-5.1%
-9.3%
2.8%
10.0%
-22.6%
-10.2% -23.2%
-63.5% -67.2%
-14.4%
-6.6%
-10.0%
-3.5%
-9.6% 147.4%
-15.8%
-8.5%
-6.6%
-2.2%
-8.1% -12.6%
-45.2% -51.6%
28.0%
n.m.
-17.2% -13.7%
37.8% 13.6%
12.5%
2.6%
0.2%
-3.0%
39.6% 70.3%
-1.6% 12.1%
1,590
1,220
790
559
194
764
794
235
739
819
412
219
150
104
202
306
1,181
430
300
-3M
-6M
-12M
4Q14
QTD
3Q14 QoQ%
-45.1% -52.5% -52.8%

581
820
-34.4% -31.0% -31.2%
1,247
1,478
-54.8% -57.1% -58.9%
1,110
1,412
-25.2% -25.2% -22.8%
1,479
1,605
-23.6% -23.8% -27.7%
1,470
1,602
-26.3% -27.0% -26.1%
1,465
1,602
-22.7% -22.0% -20.3%
1,488
1,613
PTTGC (-) | IRPC (-) | SCC (-) | TPIPL (+)
-32.8% -39.6% -41.8%
1,011
1,353
-47.5% -52.5% -52.7%
985
1,296
PTTGC (-) | TOP (-) | ESSO (-)
-18.6% -24.0% -26.8%
832
973
-30.3% -34.2% -35.2%
781
999
-20.8% -23.0% -25.4%
1,090
1,268
PTTGC (-) | IVL (-)
-17.0% -16.5% -16.1%
1,782
1,925
-26.1% -28.9% -32.2%
1,476
1,713
IRPC (+)
-22.2% -24.8% -21.8%
940
1,047
VNT (-) | TPC (-)
4.6%
-64.5%
9.2%
11.9%
34.3%
4.9%
16.2%
-16.4%
-52.6%
29.1%
22.7%
37.4%
32.1%
7.9%
80.2%
-11.8%
4.6%
-68.0%
18.6%
0.6%
-7.8%
8.8%
23.3%
-23.9%
-52.5%
-1.1%
61.0%
24.8%
35.1%
5.1%
35.2%
0.8%
666
530
898
889
223
884
907
431
404
59
124
189
313
1,212
336
316
659
593
785
782
123
782
793
533
477
57
120
148
268
1,165
260
308
YTD
Chg.
%YoY
2014F
projection
-29.1%
-15.6%
-21.4%
-7.8%
-8.3%
-8.6%
-7.8%
781
1,406
1,355
1,551
1,582
1,553
1,562
-51
56
-41
74
50
68
49
-6.1%
4.1%
-2.9%
5.0%
3.3%
4.6%
3.2%
842
1,440
1,430
1,570
1,640
1,580
1,570
-25.2%
-24.0%
1,233
1,224
-267
-93
-17.8%
-7.1%
1,190
1,240
-14.5%
-21.8%
-14.1%
930
912
1,213
-125
-166
-186
-11.8%
-15.4%
-13.3%
1,110
900
n.a.
-7.4%
-13.8%
1,875
1,679
-75
-167
-3.8%
-9.0%
n.a.
n.a.
-10.2%
1,017
0.4%
1,070
1.1%
-10.6%
14.4%
13.6%
80.2%
13.0%
14.3%
-19.2%
-15.2%
4.0%
3.4%
27.8%
16.9%
4.0%
29.5%
2.7%
626
574
771
801
175
772
781
452
443
58
110
176
287
1,141
304
314
106
10
125
100
-6
119
99
-216
-43
-159
7
-13
-5
-27
-109
-23
20.5%
1.7%
19.4%
14.4%
-3.2%
18.2%
14.5%
-32.3%
-8.8%
-73.4%
7.3%
-6.7%
-1.8%
-2.3%
-26.5%
-6.9%
598
588
728
798
200
738
728
348
398
217
103
n.a.
n.a.
n.a.
n.a.
350
Source: Datastream, SCBS Investment Research

Note: Impact to related stocks is based on WoW performance
Tel. (662) 949-1000 The information in this report has been obtained from sources believed to be reliable. However, its accuracy or completeness is not guaranteed. Any opinions expressed herein reflect
Fax: (662) 949-1030 our judgment at this date and are subject to change without notice. This report is for information only. It is not to be construed as an offer, or solicitation of an offer to sell or buy any
www.scbs.com
securities. We accept no liability for any loss arising from the use of this document. We or our associates may have an interest in the companies mentioned therein.
Petrochemicals
Figure 2: Ethylene vs. Naphtha

US$/t
1,600
1,400
Spread (RHS)
Ethylene,Far East CFR SE Asia $/MT
Figure 3: Propylene vs. Naphtha

US$/t
1,200
700
700
1,200
600
1,000
500
800
400
600
300
200
100
300
400
200
400
200
100
200
Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14
Figure 4: HDPE vs. Naphtha
Figure 5: LDPE vs. Naphtha
US$/t
1,800
1,600
Spread (RHS)
Polye HDPE Inj,South East Asia U$/MT
US$/t
1,200
1,000
1,400
800
1,200
1,000
600
800
600
400
400
200
200
0
US$/t
1,800
1,600
Spread (RHS)
Polye LDPE-Film,Spot S.E Asia U$/MT
800
1,200
1,000
600
800
600
400
400
200
200
Figure 6: LLDPE vs. Naphtha
Figure 7: PP vs. Naphtha
US$/t
Spread (RHS)
Polye LLDPE Film,F/E Spt SE Asia $/MT
1,600
1,400
US$/t
1,000
US$/t
Spread (RHS)
1,800
PP Film,Spot South East Asia U$/MT
900
1,600
800
1,400
700
1,200
600
1,000
500
800
400
600
300
1,000
200
100
200
400
600
400
200
0
Figure 8: Polyethylene spread over ethylene
Figure 9: Polypropylene vs. propylene
US$/t
350
HDPE
LDPE
LLDPE
300
250
200
150
100
US$/t
400
US$/t
Spread (RHS)
1,800
Propylene (C),Spot CFR F/E U$/MT
350
1,600
PP Film,Spot South East Asia U$/MT
300
1,400
250
200
150
1,200
600
500
400
800
300
600
400
50
50
200
US$/t
700
1,000
100
1,000
600
800
200
US$/t
1,200
800
1,200
400
0
US$/t
1,200
1,000
1,400
1,800
800
1,400
400
600
US$/t
800
500
800
Spread (RHS)
1,600
600
1,000
US$/t
900
200
100
0
Petrochemicals
Figure 10: Paraxylene vs. Naphtha

US$/t
Spread (RHS)
2,000
Para-Xylene CFR Chin M.Por Spot $/MT
1,800
Figure 11: Benzene vs. Naphtha

US$/t
900
US$/t
Spread (RHS)
1,600
Benzene,Far East CFR Spot F/E U$/MT
800
1,400
700
1,200
1,600
1,400
600
1,200
500
1,000
400
800
300
600
200
100
200
300
600
400
400
800
200
200
100
Figure 12: PTA vs. Paraxylene
Figure 13: PET vs. PTA
US$/t
Spread (PTA - 0.65*PX) (RHS)
2,000
1,800
Para-Xylene CFR Chin M.Por Spot $/MT
US$/t
US$/t
200
1,800
180
1,600
1,600
160
1,400
140
1,400
1,200
120
1,000
100
60
400
40
400
200
20
200
100
600
50
0
Figure 14: ABS margin
Figure 15: Polystyrene margin
US$/t
2,500
ABS margin (RHS)

Butadiene,US Gulf Spot CIF
ABS Asia Pac. India Spot CFR U$/MT
2,000
US$/t
1,400
1,200
US$/t
2,500
2,000
PS margin (RHS)
Polystyrene-GP,Spot Hong Kong U$/MT
1,000
1,500
800
1,500
1,000
600
1,000
200
200
500
100
0
Figure 16: PVC vs. ethylene
Figure 17: MEG vs. ethylene
US$/t
1,600
1,400
Spread (PVC - 0.67*ethylene) (RHS)

PVC,Spot South East Asia U$/MT
1,200
1,000
800
600
US$/t
US$/t
450
1,600
400
1,400
350
1,200
300
250
200
150
400
50
200
600
100
0
MEG,Far East Spot CFR F/E U$/MT
800
200
Spread (MEG - 0.63*ethylene) (RHS)
1,000
400
500
300
US$/t
600
400
400
500
250
150
800
600
US$/t
300
200
1,000
80
PET Spread
PET(Fibre Grade)A/P SpotCFR NEA $/MT
MEG,Far East Spot CFR F/E U$/MT
1,200
800
600
500
1,000
400
US$/t
700
US$/t
450
400
350
300
250
200
150
100
50
0
-50
-100
Petrochemicals
Figure 18: Selected product price/spread of listed companies

Company
Key products
% of total Product price/spread
PTTGC
Ethylene/Propylene
21%
IRPC
HDPE
LLDPE
LDPE
MEG
PX
BZ
Ethylene/Propylene
19%
7%
4%
6%
28%
15%
15%
HDPE
PP
ABS
BTX
PS
HDPE
LDPE
LLDPE
PP
PVC
LDPE
PX
BZ
PTA
PET/Polyester
MEG
PVC
PVC
12%
28%
7%
23%
12%
40%
3%
3%
25%
28%
60%
60%
21%
25%
67%
8%
63%
100%
SCC
TPIPL
TOP
IVL
VNT
TPC
Ethylene, Far East CFR SE Asia $/MT

Polye HDPE Inj, South East Asia U$/MT
Polye LLDPE Film, F/E Spt SE Asia $/MT
Polye LDPE-Film, Spot S.E Asia U$/MT
MEG, Far East Spot CFR F/E U$/MT
PX - naphtha
BZ - naphtha
Ethylene - naphtha
Propylene - naphtha
HDPE - naphtha
PP - naphtha
ABS spread
BZ - naphtha
PS spread
HDPE - naphtha
LDPE - naphtha
LLDPE - naphtha
PP - naphtha
PVC - Ethylene/EDC
LDPE - Ethylene
PX - naphtha
BZ - naphtha
PTA - PX
PET spread
PVC - ethylene
PVC - Ethylene/EDC
4Q14
QTD
1,247
1,110
1,479
1,465
1,470
832
431
404
666
530
898
907
1,212
404
336
898
889
884
907
402
223
431
404
124
189
3Q14
QoQ%
YTD
12MMA
1,478
1,412
1,605
1,602
1,602
973
533
477
659
593
785
793
1,165
477
260
785
782
782
793
428
123
533
477
120
148
-16%
-21%
-8%
-9%
-8%
-15%
-19%
-15%
1%
-11%
14%
14%
4%
-15%
29%
14%
14%
13%
14%
-6%
80%
-19%
-15%
3%
28%
1,406
1,355
1,551
1,553
1,582
930
452
443
626
574
771
781
1,141
443
304
771
801
772
781
414
175
452
443
110
176
1,407
1,358
1,551
1,553
1,583
932
453
444
624
575
768
779
1,140
444
304
768
800
770
779
389
177
453
444
110
176
316
402
308
428
3%
-6%
314
414
314
389
2014F Momentum
projection
1,440
1,430
1,570
1,580
1,640
1,110
348
398
598
588
728
728
n.a.
398
n.a.
728
798
738
728
n.a.
200
348
398
103
n.a.
350
n.a.
Disclaimer:
SCB SECURITIES COMPANY LIMITED (SCBS) ACTS AS MARKET MAKER AND ISSUER OF DERIVATIVE WARRANTS
on the ordinary shares of ADVANC, AOT, BANPU, BBL, BCH, BCP, BLA, BLAND, BMCL, BTS, CK, DTAC, EGCO,
INTUCH, ITD, IVL, JAS, KBANK, KKP, KTB, PS, PTT, PTTEP, PTTGC, QH, SAMART, SRICHA, STEC, STPI, TCAP, TICON,
TISCO, TOP, TPIPL, TRUE, TTA, UV.
Before making an investment decision over a derivative warrant, an investor should carefully read the
prospectus for the details of the said derivative warrants. Any opinion, news, research, analyse, price,
statement, forecast, projection and/or other information contained in this document (the Information) is
provided as general purpose information only, and shall not be construed as a recommendation to any
person of an offer to buy or sell, or the solicitation of an offer to buy or sell, any securities. SCBS and/or its
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INDUSTRY WATCH

Petrochemical price monitor

Buying interest on BZ is getting worse. Aromatics product prices continued to

-45.1% -52.5% -52.8%

Source: Datastream, SCBS Investment Research

Tuesday, December 23, 2014

Figure 2: Ethylene vs. Naphtha

Figure 3: Propylene vs. Naphtha

Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14

Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14

Source: Datastream, SCBS Investment Research

Source: Datastream, SCBS Investment Research

Figure 4: HDPE vs. Naphtha

Figure 5: LDPE vs. Naphtha

Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14

Source: Datastream, SCBS Investment Research

Source: Datastream, SCBS Investment Research

Figure 6: LLDPE vs. Naphtha

Figure 7: PP vs. Naphtha

Naphtha Singapore Spot FOB

PP Film,Spot South East Asia U$/MT

Naphtha Singapore Spot FOB

Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14

Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14

Source: Datastream, SCBS Investment Research

Source: Datastream, SCBS Investment Research

Figure 8: Polyethylene spread over ethylene

Figure 9: Polypropylene vs. propylene

Propylene (C),Spot CFR F/E U$/MT

PP Film,Spot South East Asia U$/MT

Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14

Source: Datastream, SCBS Investment Research

Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14

Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14

Source: Datastream, SCBS Investment Research

Tuesday, December 23, 2014

Figure 10: Paraxylene vs. Naphtha

Para-Xylene CFR Chin M.Por Spot $/MT

Naphtha Singapore Spot FOB

Figure 11: Benzene vs. Naphtha

Benzene,Far East CFR Spot F/E U$/MT

Naphtha Singapore Spot FOB

Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14

Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14

Source: Datastream, SCBS Investment Research

Source: Datastream, SCBS Investment Research

Figure 12: PTA vs. Paraxylene

Figure 13: PET vs. PTA

Spread (PTA - 0.65*PX) (RHS)

PTA CFR South East Asia

Para-Xylene CFR Chin M.Por Spot $/MT

Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14

Source: Datastream, SCBS Investment Research

Source: Datastream, SCBS Investment Research

Figure 14: ABS margin

Figure 15: Polystyrene margin

ABS margin (RHS)

Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14

Source: Datastream, SCBS Investment Research

Source: Datastream, SCBS Investment Research

Figure 16: PVC vs. ethylene

Figure 17: MEG vs. ethylene

Spread (PVC - 0.67*ethylene) (RHS)