The spread between Polyolefins group and Naphtha • HDPE Spread - Higher: HDPE - Naphtha spread in 2021 was USD 641 per ton increasing by 2% from that in 2020 of USD 627 per ton as the COVID-19 pandemic situations improved, so the demand for construction in Southeast Asia started to recover. In 4Q21, HDPE - Naphtha spread was USD 563 per ton being approximate to that in the previous quarter of USD 564 per ton. This was due to seasonally declining demand for construction during winter, while new capacity in China and South Korea increased. • PP Spread - Higher: PP - Naphtha spread in 2021 was USD 655 per ton increasing by 9% from that in 2020 of USD 602 per ton thanks to the improving COVID-19 pandemic situations leading to the recovering demand, both domestic and international ones. The increasing demand is mainly in the food packaging industry and industries relating to hygiene and medical equipment, according to work from home behaviors. In 4Q21, PP - Naphtha spread was USD 558 per ton being close to that in the previous quarter of USD 560 per ton. This was owing to the increasing Naphtha price following the rising Dubai price. Meanwhile, the demand fell towards the end of the year as downstream producers maintained their optimal inventory levels together with the increasing of new supply from China, South Korea, India, and Vietnam. However, China’s Dual-control policy caused several Chinese producers to reduce their operating rates. The spread between Aromatics group and Naphtha • TOL Spread และ MX Spread - Higher: In 2021, Toluene - Naphtha spread and Mixed Xylene-Naphtha spread were USD 83 per ton and USD 104 per ton respectively rising by 43% and 14% when compared with those in 2020. This was mainly caused by improving PX market sentiments, which resulted in the increasing demand for Toluene and Mixed Xylene, the major raw materials being used in PX production. In 4Q21, Toluene-Naphtha spread and Mixed Xylene-Naphtha spread were USD 43 per ton and USD 28 per ton respectively, down by 51% and 76% accordingly when compared with those in 3Q21. This was due to the volatile product prices being in accordance with crude oil and Naphtha prices. The product prices in December declined significantly because of the concerns about the Omicron variant of COVID-19 and the manufacturers had maintained optimal inventory levels during year end. The spread between Polystyrenics group and Naphtha • ABS Spread - Higher: ABS - Naphtha spread in 2021 was USD 1,713 per ton increasing by 50% when compared to USD 1,142 per ton in 2020. This was supported by the improving COVID-19 pandemic situations and the resumption of economic activities. The occurrences enhanced the demand for finished goods in the industries covering electrical and electronic appliances, medical and hygienic equipment as well as automotive. In 4Q21, ABS - Naphtha spread was USD 1,462 per ton, down by 13% when compared to USD 1,682 per ton in 3Q21. This was due to continuously rising production costs and freight costs following shortages of semiconductor chips and containers. Consequently, the demand for automotive as well as electrical and electronic uses dropped. In addition, most end-buyers retarded their orders to manage inventory levels before year end that caused the peak demand season to end earlier than usual. • PS Spread - Higher: PS - Naphtha spread in 2021 was USD 955 per ton increasing by 31% when compared to USD 731 per ton in 2020. This was due to the increasing demand in food and beverage packaging industry, along with the electrical and electronics appliances industry, according to the work from home behaviors and the gradually recovering economic activities. In 4Q21, PS - Naphtha spread was USD 867 per ton moving up by 3% from 3Q21 of USD 840 per ton from the tight supply in Southeast Asia due to annual maintenance shutdowns across the region. 171 Management Discussion and Analysis (MD&A) IRPC PUBLIC COMPANY LIMITED
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