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Increasing uncertainties
capabilities ENERGY
ECONOMICS &
COUNTRY RISK
MARITIME TECHNOLOGY,
& TRADE MEDIA &
TELECOM
DIGITAL & WEB
SOLUTIONS
Global growth will pick up from 2.5% in 2016 to 2.9% in 2017, led by the United States and
emerging markets.
The US economy will accelerate as capital spending growth resumes and as corporate and personal
income tax rates decrease in 2018.
The dollar will appreciate against major currencies through early 2018.
Eurozone growth will hold steady, but UK growth is expected to slow through 2018 as Brexit
negotiations amplify uncertainty and delay investment.
Chinas economic growth will slow further because of persistent imbalances in credit, housing, and
industrial markets.
140.0% 0.45
100.0% 0.35
80.0% 0.3
60.0% 0.25
40.0% 0.2
20.0% 0.15
0.0% 0.1
Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18
120% 0.4
80% 0.3
60% 0.25
40% 0.2
20% 0.15
0% 0.1
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Catalytic from
Demand shocks (GDP) or
methane: Add-on vs
shifts (product substitution)
new world scale
Gas to methanol to
Coal to VCM (skipping
olefins
EDC)
Coal to olefins
Rest of Asia
China
MDE/Afr
Europe
Americas
-2 0 2 4 6 8 10 12
Million Metric Tons
Shenhua Donghua
Yankuang Shenhua Yitai Coal
Ningmei
Yulin Erdos Erdos
I &II
Tongyi PC
Yitai
Xinjiang
Tianjin Wanhua
Chemical
SP
Chemicals
Hengli PC
Dongying
Shenghong
PC
Zhejiang PC
I & II
Sinopec/
KPC
Sinochem
Quanzhou
CTL
80%
60%
40%
20%
0%
11 16 21 11 16 21 11 16 21 11 16 21 11 16 21
MDE NAM SEA NEA WEP
95%
2016 = 100
90%
85%
2016 2017 2018 2019 2020 2021
200% 1500
150% 1000
January 2011 = 100%
500
100%
$/MT
0
50%
-500
0%
-1000
Q113 = 100%
110%
B/E Ratio
0.030
0.025 105%
0.020
100%
0.015
0.010
95%
0.005
0.000 90%
Jan-14 Aug-14 Mar-15 Oct-15 May-16 Dec-16 Jul-17 Feb-18 Sep-18
1200
Euro per Metric Ton
1000
800
600
400
200
0
Jan-12 Sep-12 May-13 Jan-14 Sep-14 May-15 Jan-16 Sep-16 May-17 Jan-18 Sep-18
25%
20%
15%
10%
5%
0%
Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16
-5%
-10%
500
0
2012 2013 2014 2015 2016 2017
2,000
Dollars Per Metric Ton
1,500
1,000
500
-500
Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18
Extraction Cash Margin Extraction Cash Cost Butane Dehydro Cash Cost
Capacity/ Start-up
Producer Process Derivatives
Shenhua Jiutai KTA date
Ningmei Energy
Jiangsu
100 H2 2017 BDH Merchant
Sailboat PC
Shandong
Kenli
Shenhua
65 H2 2017 Extraction Merchant
Sailboat Ningmei
PC
Late
CSPC phase 2 165 Extraction Merchant
2017
2,756 125
1,653 75
1,102 50
551 25
0 0
13 May Sep 14 May Sep 15 May Sep 16 May Sep 17 May Sep 18 May Sep
3,000
Dollars Per Metric Ton
2,500
2,000
1,500
1,000
500
0
07 08 09 10 11 12 13 14 15 16 17 18 19 20
80
Operating Rate, %
75
70
65
60
55
50
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Indonesia
25% Malaysia
6%
India
5%
Vietnam
8% Estates
26%
Others
Thailand 14%
34%
Natural Rubber trees require specific growing conditions found near the Equator.
Supply is relatively price inelastic and reflects market conditions roughly 8 years prior.
SE Asia
15%
Europe
12%
Others
14%
Tire production drives natural rubber demand, primarily larger truck tires.
250,000
200,000
Tons
150,000
100,000
50,000
0
Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17
120 2,646
US Cents Per Pound
80 1,764
60 1,323
40 882
Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17
Trend
DailyofNatural
Natural and Synthetic
Rubber Rubber Prices
(TSR20) in Asia
Prices
6,000 2.40
5,000 2.00
Dollars Per Ton
4,000 1.60
3,000 1.20
2,000 0.80
1,000 0.40
0 0.00
Jan-05 Jun-06 Nov-07 Apr-09 Sep-10 Feb-12 Jul-13 Dec-14 May-16
Source: Singapore Commodities Exchange (SICOM) & RTAE 2017 IHS Markit
15,000
Thousand Tons
14,000
13,000
12,000
11,000
10,000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Supply Demand
Regulation Technology
pressure development
Environment Economic
and climate uncertainty
issues
Autonomous
Energy rivalry
Congestion Connectivity