The prices and spreads of petroleum products in 2024 are expected to trend downward relative to 2023, pressured by economic factors and impacts of high policy interest rates, which influence the strengthening of the dollar and exert pressure on the demand slowdown persisting from 2022 onwards. Meanwhile, the supply of petroleum products is anticipated to grow. It is expected that new refining facilities commencing operation in 2024 will have a combined production capacity of 2.7 million barrels per day, an increase of 0.8 million barrels per day compared to 2023. Consequently, the gross refining margin (GRM) for the year 2024 will likely trend downward compared to 2023. Aromatics Market Overview in 2023 Demand for paraxylene and benzene in was pressured and dampened by the economic slowdown. Production in the paraxylene value chain, including among producers of PTA and PET resins, was tightly controlled to maintain the profitability ratio in the face of declining demand in the textile industry. Meanwhile, industries in the benzene value chain, particularly many styrene monomer (SM) plants across Asia and Europe, cut or even halt their production as it was no longer costeffective, causing benzene demand to fall. On the supply side, the global paraxylene production capacity in 2023 was 80.2 million tons, increased by 7.5 million tons compared to 2022, while the global production capacity of benzene in 2023 was 78.8 million tons, a 4.2-million-ton increase from 2022. The added capacities were attributable mostly to China, due to its policy to increase domestic production and reduce reliance on imports. In the first half of 2023, the paraxylene market was positively affected as the launch of added capacity in China was postponed, causing the paraxylene-naphtha spread and the benzenenaphtha spread to grow. In addition, in Q3, the paraxylene and benzene market was buoyed by the U.S. gasoline market due to its demand for reformates and mixed-xylene for use as feedstocks for the production of aromatics for gasoline blending. The resulting feedstock shortage, coupled with the emergency shutdown of China’s main producer, positively affected the aromatics market. As a result, the paraxylene-naphtha spread in 2023 was US$ 389 per ton, a jump of US$ 70 per ton from 2022, while the benzene-naphtha spread in 2023 was US$ 248 per ton, a US$ 4 uptick per ton compared to 2022. Market Forecast for 2024 For the paraxylene and benzene market in 2024, the supply will likely face continued pressure from the economic slowdown and changing consumer behavior, such as the demand for paraxylene in the downstream product category, impacting the textile industry. On the supply side, the paraxylene market and the benzene market will see an additional capacity of approximately 0.8 million and 1.8 million tons, respectively, a significant decrease from 2023. Nevertheless, it is anticipated that in the latter half of 2024, the global economic situation will start to improve, which, coupled by continued economic stimulus package by the Chinese government, will be a supporting factor in maintaining the overall market at a high level but lower than in 2023. Consequently, the paraxylene-naphtha spread and the benzene-naphtha spread in 2024 are expected to narrow relative to 2023. Olefins Market Overview in 2023 The ethylene and propylene market in Q1/2023 was buoyed by the increased supply and prices after China eased its disease control policy. However, in Q2, the market faced pressure from the economic slowdown as well as the slower-than-expected recovery in China’s demand. This was accompanied by the expansion of capacity of approximately 2.7 million tons for the ethylene market and 2.4 million tons for the propylene market among Asian manufacturers, contributing to a significant decrease in ethylene and propylene prices by the end of Q2. In Q3, the ethylene and propylene markets faced continued economic pressure, coupled with the expansion of production capacity of approximately 2 million tons in the propylene market by Asian manufacturers. This led to a decline in prices, especially 69 PTT GLOBAL CHEMICAL PUBLIC COMPANY LIMITED Form 56-1 One Report 2023
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