Toluene

SINGAPORE (ICIS)–South Korea’s benchmark stock market index was closed lower on Monday, snapping four straight days of gains, after the country’s parliament impeached President Yoon Suk Yeol over the weekend for imposing a short-lived martial law on 3 December. The KOSPI composite index slipped 0.22% to settle at 2,488.97, with shares of major petrochemical companies closing mixed. The Korean won (W) eased against the US dollar at W1,437.68 as of 08:00 GMT, weaker than the previous session’s closing of W1,435.45. The won had plunged to an almost two-year low of above W1,440 to the US dollar when Yoon declared martial law late on 3 December which lasted about six hours. South Korea’s National Assembly on 14 December voted 204-85 to impeach Yoon for imposing martial law, which plunged the country into political instability and economic uncertainty. A two-thirds majority was required to approve the motion, which was the second one filed after the first motion on 7 December failed. Yoon’s political duties have been suspended pending a Constitutional Court decision, which is expected in 180 days, on whether to re-instate or remove him from office. Prime Minister Han Duck-soo became the acting President upon Yoon’s impeachment, stating that his mission is to “swiftly stabilize the confusion in state affairs” during a Cabinet meeting. Han talked to outgoing US President Joe Biden by phone on 15 December, reassuring him that "South Korea will carry out its foreign and security policies without disruption", according to a statement from Han's office. EYES ON 2025 Separately, finance minister Choi Sang-mok on Monday said he has written a letter to financial institutions and world leaders to explain the government’s response to the recent political situation and to request their trust and support in the South Korean economy. During an emergency ministerial meeting on 15 December, strategies were heard for economic stabilization and growth in the short- and long-term. For one, the finance ministry will announce its economic policy direction for 2025 by the end of the year, along with a mid- to long-term strategy to be released in January 2025. Meanwhile, the Ministry of Trade, Industry and Energy (MOTIE) is also drafting support measures for the petrochemical industry in preparation for the Trump-led US government in January 2025, which is threatening to impose tariffs on all imported goods. The US, along with China, is a major trading partner of South Korea. South Korea’s measures are expected to take effect in Q1 2025. The country – which is a major exporter of ethylene and aromatics, such as benzene, toluene and styrene monomer (SM) – is reeling from a combination of weak external demand and overcapacity in China. (updates closing levels for index, share prices; adds details throughout) Thumbnail image: South Korean Prime Minister Han Duck-soo, who assumed office as acting president after the parliamentary impeachment of President Yoon Suk-yeol, speaks to reporters at the government complex in central Seoul, South Korea, 15 December 2024. (YONHAP/EPA-EFE/Shutterstock)

16-Dec-2024

SINGAPORE (ICIS)–South Korea’s benchmark stock market index continued to bleed on Monday amid political instability wrought by the shock martial law announcement on 3 December, with impeachment motions against President Yoon Suk Yeol dropped over the weekend due to lack of quorum. KOSPI composite index falls for fourth session Petrochemical shares tumble along; Nov exports fall 5.6% year on year Yoon may be stripped of presidential powers At the close of trade on Monday, the KOSPI composite index shed 67.58 points or 2.78% at 2,360.58, with shares of major petrochemical companies slumping. The Korean won also weakened sharply against the US dollar. The pair was trading W1,437.27 as of 07:04 GMT. When martial law was declared late on 3 December, the won tumbled to a near two-year low above W1,440 levels versus the greenback. PETROCHEMICAL EXPORTS FALLINGSouth Korea is a major exporter of ethylene, as well as aromatics, such as benzene, toluene and styrene monomer (SM). The overall industry is reeling from a combination of weak external demand and overcapacity in China. South Korean industries, including chemicals, rely heavily on exports to China, whose self-sufficiency has grown over the years. In November, South Korea’s petrochemical exports declined by 5.6% year on year to $3.6 billion. In the first 11 months of 2024, however, its petrochemical export volume increased by 7.5% year on year, the Ministry of Trade, Industry and Energy (MOTIE) said on 5 December. Market players said that port operations in Daesan have been unsteady because of strong winds, causing delays in cargo deliveries. “Petrochemical exports are facing difficulties due to unforeseen factors such as falling product prices linked to oil prices and bad weather,” the first vice minister of MOTIE Park Sung-taek said after a recent visit to the refinery of Hyundai OIlbank and the production/export site of Hyundai Chemical. For Hyundai Oilbank, the arrival of five carriers and three crude oil import vessels were delayed because of inclement weather in late November, while delays also hit shipment of five product carriers of Hyundai Chemical, MOTIE noted. “In order to prevent disruptions in exports, we will diversify the types of oil reserves from the existing heavy crude oil to light crude oil in consideration of the types of oil used by each refinery, and greatly simplify the oil reserve lending process so that companies can quickly provide oil reserves when necessary," Park said. EMERGENCY MEETINGS OF FINANCIAL REGULATORS CONTINUEThe economic managers of Asia’s fourth-largest economy – led by Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok – have been holding daily emergency meetings before markets open to ensure financial markets stability, keeping their promise to provide “unlimited liquidity”. “The participants agreed that, as domestic and international uncertainties still persist, relevant organizations should maintain a closer emergency cooperation and response system and mobilize all capabilities to respond in order to minimize the economic impact of the political situation. In a statement on Monday, the Ministry of Economy and Finance said that “as domestic and international uncertainties still persist, relevant organizations should maintain a closer emergency cooperation and response system and mobilize all capabilities to respond in order to minimize the economic impact of the political situation”. South Korea intends to activate a market stabilization fund worth won (W) 40 trillion ($28 billion) following the country’s brief dalliance with martial law, with its slowing economy facing the prospect of increased US tariffs in 2025. For the stock market, the MOEF said that W30 billion of the value-up fund “has already been invested”, with W70 billion to be injected this week, with another W30 billion scheduled to be implemented sequentially. YOON SURVIVES IMPEACHMENT BUT MAY BE STRIPPED OF POWERSBecause of lack of quorum, South Korean President Yoon managed to survive impeachment on 7 December, which was set into motion following his declaration of a six-hour long martial law that disrupted markets. “The impeachment vote failed to gain the 200-vote hurdle needed to suspend the president from duties,” Singapore-based UOB Global Economics & Markets Research said in a note on Monday. “The opposition bloc needed only eight votes from the ruling PPP [People Power Party] to impeach Yoon as votes by three PPP members had prompted protesters outside the National Assembly to chant “five more to go,” it said. On 8 December, PPP leader Han Dong-hoon said that Prime Minister Han Duck-soo will manage the nation’s affairs as an exit plan for Yoon is being prepared, the constitutionality of which is being questioned by the opposition Democratic Party of Korea (DPK). Focus article by Pearl Bantillo Additional reporting by Jonathan Yee Thumbnail image: Lawmakers in the voting chamber during the plenary session for the impeachment vote of President Yoon Suk Yeol at the National Assembly in Seoul, South Korea on 7 December 2024.(JEON HEON-KYUN/POOL/EPA-EFE/Shutterstock)

09-Dec-2024

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 6 December 2024. India cuts banks’ cash reserves ratio by 50bps; lowers full-year GDP forecast By Priya Jestin 06-Dec-24 17:51 MUMBAI (ICIS)–India’s central bank on Friday maintained its benchmark interest rate at 6.5% but cut its cash reserve ratio (CRR) by 50 basis points to 4%, in a bid to improve growth and rein in high inflation. Mideast PMDI, TDI fall on weak demand amid high freight costs By Isaac Tan 06-Dec-24 15:24 SINGAPORE (ICIS)–Prices for both polymeric methylene diphenyl diisocyanate (PMDI) and toluene diisocyanate (TDI) in the Middle East have decreased this week, reflecting a general slowdown in demand as the year comes to a close. GPCA ’24: Europe chemical industry faces price pressure from US tariffs on ChinaBy Jonathan Yee 05-Dec-24 19:15 MUSCAT (ICIS)–An incoming Trump administration in the US and the promise of tariffs on all foreign goods will likely upend the global world order, placing pressure on the European chemical industry amid ensuing price volatility, senior industry figures warned this week. S Korea prepares $28 billion market stabilization fund after martial law By Pearl Bantillo 05-Dec-24 15:28 SINGAPORE (ICIS)–South Korea is preparing to activate a market stabilization fund worth won (W) 40 trillion ($28 billion) following the country’s brief dalliance with martial law, with its slowing economy facing the prospect of increased US tariffs in 2025. UPDATE: Indonesia begins antidumping probe on PP homopolymers By Jackie Wong 05-Dec-24 15:12 SINGAPORE (ICIS)–Indonesia has initiated an antidumping investigation on imported polypropylene (PP) homopolymer products, according to a government document obtained by ICIS on Thursday. INSIGHT: GPCA '24: GCC petrochemical players sharpen focus on longer-term sustainable growth By Nurluqman Suratman 04-Dec-24 19:33 MUSCAT (ICIS)–Gulf Cooperation Council (GCC) petrochemical executives met with global colleagues in Muscat, Oman, this week as the focus on sustainable growth continues to sharpen amid concerns over oversupply, trade protectionism and geopolitical conflicts. INSIGHT: Political instability rocks South Korea after martial law; no petrochemical impact so far By Pearl Bantillo 04-Dec-24 19:06 SINGAPORE (ICIS)–Days before the shock declaration of martial law in South Korea by President Yoon Suk-yeol, political wranglings stalled the 2025 budget deliberations of Asia’s fourth-biggest economy. GPCA '24: Thailand's PTTGC to start SAF production in early 2025 – CEO By Nurluqman Suratman 04-Dec-24 18:00 MUSCAT (ICIS)–Thailand’s PTT Global Chemical (PTTGC) is expected to begin producing sustainable aviation fuel (SAF) at its refinery in Map Ta Phut early next year, the company’s CEO Narongsak Jivakanun said. S Korea President Yoon may face impeachment after short-lived martial law By Pearl Bantillo 04-Dec-24 14:07 SINGAPORE (ICIS)–Calls for South Korean President Yoon Suk Yeol to resign are growing after his hours’ long martial law that rattled the country’s equities and foreign exchange markets. GPCA '24: INSIGHT: Middle East PP has leading global competitive position By Emiliano Basualto 02-Dec-24 13:00 MUSCAT (ICIS)–The Middle Eastern polyolefin industry has always been recognised for its competitive advantages, particularly driven by access to inexpensive raw materials and low energy costs. GPCA '24: GCC needs to formulate right partnerships – GPCA chief By Nurluqman Suratman 02-Dec-24 09:59 MUSCAT (ICIS)–Gulf Cooperation Council (GCC) petrochemical players must formulate strategic international partnerships and invest in optimization and innovation to remain competitive, according to the secretary general of the Gulf Petrochemicals and Chemicals Association (GPCA).

09-Dec-2024

SINGAPORE (ICIS)–Days before the shock declaration of martial law in South Korea by President Yoon Suk-yeol, political wranglings stalled the 2025 budget deliberations of Asia’s fourth-biggest economy. Opposition DPK wants heavy cut in 2025 national budget Impeachment looms for President Yoon No impact on petrochemical operations/trades “Tensions between the ruling PPP [People Power Party] and main opposition Democratic Party of Korea (DPK) have escalated as both sides have been unable to come to a consensus on the budget,” according to BMI Country Risk & Industry Research, a unit of Fitch Solutions Group in a note on Wednesday. DPK has proposed heavy cuts – to the tune of won (W) 4.1 trillion ($2.9 billion) – to the Yoon administration’s proposed budget of W677.4 trillion for next year, which represents a 3.2% increase from 2023. “As things stand, Yoon’s proposed 2025 budget … faces the risk of being watered down to KRW673.3trn amid strong opposition from the DPK which holds a parliamentary majority,” BMI stated. QUITE AN UNEXPECTED MOVE Most South Koreans, including players in the petrochemical industry, like the rest of the world, were baffled at Yoon’s declaration of emergency martial law late on 3 December. The last time the highly industrialized country in Asia faced martial law was in 1979, and no recent developments in the geopolitical and financial sectors of the country indicated that such a drastic measure would be taken. At close to midnight, Yoon had declared martial law – which meant military rule and curbs on civil rights – on national television noting that it was meant to crack down on pro-North Korean forces and protect the constitutional order in the country. "Martial law was quite surprising for us to hear because it hasn't happened in the last 40 years," said a soda ash distributor. The declaration of martial law and its withdrawal hours later has thrown South Korea into political instability. It was highly disruptive for market sentiment that for a time, suspension of trading was mulled, but was eventually called off when the martial law was rescinded about six hours after it was declared. South Korea’s Ministry of Finance and Economy and the Bank of Korea assuaged market fears of disruption by offering “unlimited liquidity support” to ensure market stability, immediately after the martial law declaration. The won weakened near two-year lows against the US dollar on 3 December at around W1,440 but recovered to around W1,412 levels as of Wednesday afternoon. The benchmark KOSPI composite index closed off lows at 2,464.00, down 1.44% from the previous day, after falling nearly 2% in intraday trade. “For now, we expect limited implications for the economy and financial markets as the Bank of Korea and the Ministry of Finance have responded swiftly by reassuring investors,” BMI said. “Notably, the central bank committed to boosting short-term liquidity and enacting measures to stabilise the FX [foreign exchange] markets, which aligns with our view that risks around the South Korean won, should remain contained for now,” it added. The central bank held an emergency monetary policy meeting on Wednesday morning, with the Monetary Board deciding “to keep all options open and to actively take market stabilization measures until markets are fully stabilized”. In late November, the BoK issued its second interest rate cut in as many months to prop up the economy, while trimming its GDP growth forecasts for this year to 2.2%, and for 2025 to 1.9%. In Q3, the country's GDP growth decelerated to 1.5% from a 2.3% pace set in Q2. The South Korean economy is expected to face added pressure next year amid US threats to impose tariffs on all imported goods. Like most of Asia, the country is heavily reliant on exports, with China and the US as its biggest trade partners. South Korea's export growth in November weakened to 1.4% year-on-year to $56.4 billion, while imports shrank by 2.4% to $50.7 billion, indicating domestic weakness. YOON’S FUTURE UNCERTAIN Calls for Yoon’s resignation is mounting, with lawmakers from DPK saying that if he does not resign immediately, steps will be taken to have him impeached. “We anticipate heightened political uncertainty in the near term. Yoon is now under intense pressure to resign. If he does not, we expect that it is only a matter of time before he is impeached,” BMI said. “If so, we believe Prime Minister Han Duck-soo will step in as interim leader, paving the way for elections to be held within 60 days, in accordance with the constitution,” it added. According to Korean news agency Yonhap, opposition parties – DPK and five others, including the Rebuilding Korea Party and Reform Party, submitted on Wednesday afternoon a motion to impeach President Yoon to the National Assembly. The motion – which was signed by 190 opposition lawmakers and one independent lawmaker, with no support from any ruling party lawmakers – will be reported to a parliamentary plenary session on 5 December and then put to a vote on either 6 December or 7 December. South Korea’s law requires that an impeachment motion be put to a vote between 24 and 72 hours after the motion is reported to a plenary session, Yonhap said. Yoon, an inexperienced politician, became the 20th president of the country in May 2022 and is currently serving the third of his five years of office. Previously, he was South Korea's chief prosecutor. In its note, BMI noted that PPP leader Han Dong-hoon had urged Yoon to explain his decision and to dismiss defense minister Kim Yong-hyun, who advised the president to declare martial law “even as the finance and foreign ministers advised against it”. “The silver lining we think is that the swift reversal of the martial law underscores the resilience of South Korea’s institutions,” it said. NO IMPACT ON PETROCHEMICAL TRADESPlayers in the petrochemical industry are monitoring the political developments but noted no immediate impact on the commodities markets. "Politically, [it is] still unstable as the President is getting pressure to resign," a source at a phenol/acetone producer said. South Korea is a major exporter of ethylene, as well as aromatics such as benzene, toluene and styrene monomer (SM). "At this moment the situation has settled down, but we'll see how the government will respond to the issue,” the soda ash distributor said. “From the industrial side there is no huge impact because plants/factories are always running at full capacity so now we don't see any impact," he said. "But long-term impact, we'll need to see how other foreign companies and assets may move out of South Korea," the distributor added. For the time being, players are more pre-occupied with unsteady port operations in Daesan because of heavy winds which are affecting trades and cargo deliveries. Meanwhile, South Korea's petrochemical industry has its own troubles stemming from Asia's overcapacity. In the case of of major player Lotte Chemical, which swung into a net loss of W514 billion in Q3 2024, the company is making big changes to its  portfolio, selling or closing commodities businesses as it refocuses on higher margin specialties. South Korean industries, including chemicals, rely heavily on exports to China, whose self-sufficiency has grown over the years. Insight article by Pearl Bantillo ($1 = W1,414) Additional reporting by Fanny Zhang, Jonathan Chou, Evangeline Cheung, Helen Lee, Shannen Ng, Josh Quah and Clive Ong

04-Dec-2024

CARTAGENA, Colombia (ICIS)–Latin American chemicals producers should be prepared to face a prolonged downturn which could extend to 2030 as newer capacities globally keep coming online, according to the director general at the Latin American Petrochemical and Chemical Association (APLA). Manuel Diaz said global manufacturing is not recovering at the speed the chemicals industry would need for supply and demand to rebalance anytime soon, and Latin America – the quintessential ‘price taker’ region as its trade deficit makes it dependent on imports from other regions – must prepare for the most prolonged downturn in chemicals in living memory. Diaz spoke to ICIS ahead of the APLA annual meeting which kicked off on Monday. “This is pretty much what we are going to be talking about in the 2024 annual meeting: oversupply of products and raw materials, of ethylene. There are still many plants being announced, so it seems that at least until 2027, I would say 2030, the pressure on profitability is going to be very strong,” said Diaz. “Companies in Latin America should be prepared because, while new plants are still being started up, there is no sign of a world recovery strong enough to get there. A silver lining could be found in the fact that there is still considerable population growth: from now until 2050, we will have a growth in the world population like what would be, so to speak, adding a new India [the most populous country with 1.45 billion people].” Diaz, an Argentinian national, said he expects more plants will shut down in his home country as the national chemicals industry adapts to a more liberalized market under Javier Milei’s administration. In October, US chemicals major Dow said it would stop producing polyether polyols at its site in San Lorenzo, in Argentina’s province of Santa Fe, on the back of poor economics caused by global oversupply, while Argentina’s Petroquimica Rio Tercero shut its toluene diisocyanate (TDI) plant in Cordoba arguing the same reason. “I think we will see a reorganization in the sector, especially in Argentina. There will be some plants that are no longer sufficiently attractive from a profitable or product point of view – there will be a trend to concentrate on more profitable products,” said Diaz. “In the case of Dow, for instance, the plant they shut in Argentina was not the only plant of that type that it shuts down globally, that is why I think this is not a problem only in Argentina or Brazil – it is a global problem, a problem of competitiveness.” Diaz said we must think about China’s “differently” in order to understand the current downcycle, much of it related to that country’s overcapacities as its economy is not growing at the expected, pre-pandemic-like rates. “From our place in the world, we see everything as an economic curve and a capital curve, but the Chinese sees it from the point of view of a work curve. So, it is not a case that they are subsidizing the product itself for an easier sale,” said Diaz. “What they are doing, in my opinion, is subsidizing companies so job creation does not slow down – economic growth there is the priority.” He went on to reflect on how the globalization rates up to 2020 may have gone too far, adding the pandemic showed us how it was a mistake to focus on just a few countries – or just China, in many cases – as the main source for manufactured goods. – So, is the world coming back to a protectionist wave, like that of the 1930s? – “Now we see countries around the world thinking about how to protect their manufacturing sectors from China’s oversupplies, so maybe that globalizing cycle [up to 2020] has ended, the trend of setting up plants in the cheapest place and so on. I think the pandemic left us messages,” said Diaz. “Messages around the fact that we can't have a dependency on a single place from where all the electronic chips come from, for instance. So, I think it's not going to be just Brazil [where protectionist measures are enacted] but in many other Latin American countries – it is a contingency measure.” Finally, about the potential the new US administration under Donald Trump may impose import tariffs on Mexico, Diaz said “reality may end up surpassing” ideology, referring to the high dependance US manufacturers also have from Mexico’s manufacturers. The two countries’ economies became highly linked from the 1990s, when the first North American free trade deal, NAFTA, was signed. The situation did not change much after the first Donald Trump administration renegotiated NAFTA to give way to the current USMCA trade deal. “We have two new administrations in the US and Mexico. We will see what they end up doing, but what is clear is that there will be alternatives [to import tariffs being imposed]. Trump also knows that US companies buy a lot from Mexico, and in a protectionist spiral Mexico could also impose tariffs, so US companies would end up being affected as well,” said Diaz. “That is the reality that applies to everything, and that is why I say that reality normally surpasses your ideological vision: One thing is what I can say in the campaign, a different one may be what you implemented once you are in office.” Thumbnail shows money from Latin America. Image by ICIS. The 44th APLA annual meeting takes place 18-21 November in Cartagena, Colombia. Interview article by Jonathan Lopez

18-Nov-2024

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 15 November. INSIGHT: India’s ADD findings on PVC have potential to reshape regional flows in wider Asia By Jonathan Chou 11-Nov-24 11:00 SINGAPORE (ICIS)–Asia's polyvinyl chloride (PVC) market players are assessing the potential ramifications following preliminary findings on India's PVC imports released by the country's Directorate General of Trade Remedies (DGTR). Asia petrochemical shares tumble as China stimulus disappoints By Jonathan Yee 11-Nov-24 15:04 SINGAPORE (ICIS)–Shares of petrochemical companies in Asia tumbled on Monday as China’s much-awaited stimulus measures failed to impress markets, while the US is likely to put up more trade barriers against the Asian giant following the re-election of Donald Trump as president. Asia toluene markets slump on waning regional demand By Melanie Wee 12-Nov-24 11:47 SINGAPORE (ICIS)–Asia’s toluene spot markets are being weighed down by a combination of burgeoning supply and lacklustre demand, at a time when arbitrage economics to divert material to the US were unviable. Asia petrochemical shares fall on strong US dollar, uncertain trade policies By Nurluqman Suratman 13-Nov-24 14:07 SINGAPORE (ICIS)–Shares of petrochemical companies in Asia extended losses on Wednesday, tracking weakness in regional bourses, amid a strong US dollar and uncertainty over trade policies of US President-elect Donald Trump which could fuel inflation. Shell Singapore site divestment deal to be completed in Q1 2025 By Nurluqman Suratman 14-Nov-24 11:41 SINGAPORE (ICIS)–Shell expects the deal to sell its energy and chemicals park in Singapore to Chandra Asri and Glencore will be completed by the first quarter of 2025, a company spokesperson said on Thursday. INSIGHT: China may accelerate PP exports amid intensified supply and demand imbalance By Lucy Shuai 14-Nov-24 13:00 SINGAPORE (ICIS)–China may accelerate PP exports in 2025 amid an intensified imbalance between supply and demand as a large number of new plants are expected to start up. PODCAST: SE Asia propylene to face additional supply, freight challenges in 2025 By Damini Dabholkar 15-Nov-24 11:28 SINGAPORE (ICIS)–Southeast Asia's propylene market faces significant challenges in 2025, with additional supply expected and freight rates continuing to impact downstream demand. Crimped supplies ease pressure on Asia VAM prices By Hwee Hwee Tan 15-Nov-24 14:36 SINGAPORE (ICIS)–Sporadic plant disruptions and crimped supplies in China are fuelling expectations of price competition easing across vinyl acetate monomer (VAM) import markets in Asia.

18-Nov-2024

HOUSTON (ICIS)–Oil and gas production, the main source of the feedstock and energy used by the petrochemical industry, should benefit from policies proposed by President-Elect Donald Trump, while hydrogen and renewable fuels could lose some of the support they receive from the federal government. Trump expressed enthusiastic and consistent support for oil and gas production during his campaign. He pledged to remove what he called the electric vehicle (EV) mandate of his predecessor, President Joe Biden. Trump may attempt to eliminate green energy subsidies in Biden's Inflation Reduction Act (IRA) BRIGHTER SENTIMENT ON ENERGYRegardless of who holds the presidency, US oil and gas production has grown because much of it has taken place on the private lands of the Permian basin. Private land is free from federal restrictions and moratoria on leases. That said, the federal government could indirectly restrict energy production, and statements from the president could sour the sentiment in the industry. During his term, US President Joe Biden antagonized the industry by accusing it of price gouging, halting new permits for LNG permits and revoking the permit for the Keystone XL oil pipeline on his first day in office. By contrast, Trump has pledged to remove federal impediments to the industry, such as permits, taxes, leases and restrictions on drilling. WHY ENERGY POLICY MATTERSPrices for plastics and chemicals tend to rise and fall with those for oil. For US producers, feedstock costs for ethylene tend to rise and fall with those for natural gas. Also, most of the feedstock used by chemical producers comes from oil and gas production. Policies that encourage energy production should lower costs for chemical plants. RETREAT FROM RENEWABLES, EVsTrump has pledged to reverse many of the sustainability policies made by Biden. Just as Trump did in his first term, he would withdraw from the Paris Agreement. For electric vehicles (EVs), Trump said he would "cancel the electric vehicle mandate and cut costly and burdensome regulations". He said he would end the following policies: The Environmental Protection Agency's (EPA) recent tailpipe rule, which gradually restricts emissions of carbon dioxide (CO2) from light vehicles. The Department of Transportation's (DoT) Corporate Average Fuel Economy (CAFE) program, which mandates fuel-efficiency standards. These became stricter in 2024. The EPA was expected to decide if California can adopt its Advanced Clean Car II (ACC II) program, which would phase out the sale of combustion-based vehicles by 2035. If the EPA grants California's request, that would trigger similar programs in several other states. Given Trump's opposition to government restrictions on combustion-based automobiles, the EPA would likely reject California's proposal under his presidency or attempt to reverse it if approved before Biden leaves office. According to the Tax Foundation, Trump would try to eliminate the green energy subsidies in the Inflation Reduction Act (IRA). These included tax credits for renewable diesel, sustainable aviation fuel (SAF), blue hydrogen, green hydrogen and carbon capture and storage. In regards to the UN plastic treaty, it is unclear if the US would ratify it, regardless of Trump's position. The treaty could include a cap on plastic production, and such a provision would sink the treaty's chances of passing the US Senate. For renewable plastics, much of the support from the government involves research and development (R&D), so it did little to foster industrial scale production. WHY EVs AND RENEWABLES MATTERPolicies that promote the adoption of EVs would increase demand for materials used to build the vehicles and their batteries. Companies are developing polymers that can meet the heat and electrical challenges of EVs while reducing their weight. Heat management fluids made from base oils could help control the temperature of EV batteries and other components. If such EV policies reduce demand for combustion-based vehicles, then that could threaten margins for refineries. These produce benzene, toluene and xylenes (BTX) in catalytic reformers and propylene in fluid catalytic crackers (FCCs). Lower demand for combustion-based vehicles would also reduce the need for lubricating oil for engines, which would decrease demand for some groups of base oils. Polices that promote renewable power could help companies meet internal sustainability goals and increase demand for epoxy resins used in wind turbines and materials used in solar panels, such as ethylene vinyl acetate (EVA) and polyvinyl butyral (PVB). Insight article by Al Greenwood Thumbnail shows the White House. Image by Lucky-photographer.

07-Nov-2024

SINGAPORE (ICIS)–China’s major isocyanate producer Wanhua Chemical reported a 29% year-on-year decrease in Q3 profit as falling prices of some products and rising cost eroded margins, the company said on Tuesday. Turnarounds at its production units at Yantai in China, and in Hungary also dragged down earnings for the period. million CNY Q3 2024 Q3 2023 % change Jan-Sept 2024 Jan-Sept 2023 % change Revenue 50,536.79 44,927.77 12.5% 147,604.15 132,554.14 11.4% Operating profit 3,985.81 5,316.14 -25.0% 14,556.54 15,592.67 -6.6% Net Profit 2,918.95 4,134.95 -29.4% 11,093.32 12,703.18 -12. 7% Key points: – Q3 demand for pure methylene diphenyl diisocyanate (MDI) sluggish amid high inventory and fierce competition – For polymetric MDI, demand from the fridge sector as well as from the construction sector increased, while exports were stable in July-September 2024. – For toluene diisocyanate (TDI), demand was weak amid mounting inventories in downstream home furnishing industry. – Demand of polyols also slumped by poor needs from home furnishing and car sectors. – On cost side, Q3 prices of benzene and liquefied petroleum gas (LPG) – two of Wanhua Chemica’s key raw materials – increased by 13%-25% on year, although coal prices dropped by about 2%.

29-Oct-2024

SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 18 October. NEWSArgentina’s Rio Tercero shuts TDI plant on global oversupply Petroquimica Rio Tercero has shut its toluene di-isocyanate (TDI) plant in Cordoba on the back of global oversupply, a spokesperson for the Argentinian producer confirmed to ICIS on Tuesday. Brazil’s higher chemicals import tariffs kick off Brazil’s higher import tariffs on dozens of chemicals kicked off on Tuesday after the government published them on the Official Gazette late on Monday. Brazil’s Senate approves EU Reach-like rules to increase chemicals control Brazil’s Senate approved on 15 October the creation of a National Inventory of Chemical Substances aiming at “reducing negative impacts” of toxic chemicals on human and environmental health. PRICING Mexico PE domestic prices lower on weak demand, ample supplyDomestic polyethylene (PE) prices dropped in Mexico due to weak demand and ample supply. In other Latin American countries, prices were unchanged. Brazil hydrous and anhydrous ethanol sales surgeIn Brazil, 1.73 billion liters of hydrous ethanol were sold by Center-South units, representing a 4.36% increase over the same period in the previous harvest. This expansion demonstrates the domestic market's ongoing need for hydrous ethanol. Dow plans maintenance at LLDPE unit in Argentina – sourcesDow is having a scheduled maintenance at its linear 310,000 tonne/year low-density polyethylene (LLDPE) plant in Bahia Blanca, Argentina, until 5 November, according to market sources. Chile, Peru international PP prices drop on lower Chinese offers International polypropylene (PP) prices dropped in Chile and Peru on the back of lower offers from China. Chinese offers retreated this week, after rising the previous week due to higher crude oil prices.

21-Oct-2024

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 18 October. IPEX: Global spot index rises again on increases in NE Asia The global spot ICIS Petrochemical Index (IPEX) rose for the second consecutive week in the week ended 11 October, by 0.3%, again due to price increases in northeast Asia. Argentina’s Rio Tercero shuts TDI plant on global oversupply Petroquimica Rio Tercero has shut its toluene di-isocyanate (TDI) plant in Cordoba on the back of global oversupply, a spokesperson for the Argentinian producer confirmed to ICIS on Tuesday. Brazil’s Senate approves EU Reach-like rules to increase chemicals control Brazil’s Senate approved on 15 October the creation of a National Inventory of Chemical Substances aiming at “reducing negative impacts” of toxic chemicals on human and environmental health. INSIGHT: Decarbonized chemicals, plastics gain momentum with multiple production pathways Momentum is building in the zero-to-low carbon chemicals and plastics space with many different pathways to production that will give customers more options to reduce their carbon footprint. US Ascend to close South Carolina plant, move polymer production to Florida Ascend Performance Materials plans to shut down its remaining operations Greenwood, South Carolina, and move the site's polymer production to its complex in Pensacola, Florida, US-based nylon producer said on Friday.

21-Oct-2024