Methanol

SINGAPORE (ICIS)–Saudi Arabian producer Methanol Chemicals Co's (Chemanol) specialty chemicals subsidiary Madarat Al-Dhara Chemicals Co has signed an agreement to secure a long-term supply of ethylene oxide (EO) from Sadara Chemical Company. The EO supply is intended for Madarat Al-Dhara's methyl diethanolamine (MDEA) and choline chloride projects, Chemanol said in a filing to the Saudi bourse, Tadawul, on 29 August. Details on cost and volume of the EO supply deal were not disclosed. "Chemanol aims to become one of the largest producers of specialty petrochemicals in the region given that all targeted products would be the first of their kind in the region," the company said. Financial and capacity details of the MDEA and chlorine chloride projects were not disclosed. "Such products would be used in many vital and strategic industries such as oil and gas Industry, nutrition additives industry, extraction of environmental harmful gases, carbon capture and storage technologies and others." MDEA is crucial for gas purification, while choline chloride plays roles in animal nutrition, chemical processes, and industrial applications. In May, Chemanol completed its Saudi riyal (SR) 80 million ($21 million) acquisition of an 80% stake in Global Company for Chemical Industries (GCI), a specialty and fine chemicals manufacturer. The company is aiming to expand its specialty chemicals market share and diversify its product offerings.

30-Aug-2024

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 9 August. Europe propylene glycol ethers market to focus on imports until year end A balanced propylene glycol ethers market in Europe is widely expected to continue for the remainder of the year with the focus to remain heavily on changes in supply. Supply changes to drive European ethanolamines market into the autumn Supply changes are expected to remain the driving force in the European ethanolamines market for the remainder of the year. Europe ACN market to see seasonal demand shift in H2 2024 Evolving geopolitics-led supply chain developments and the macroeconomic picture will dominate changes to supply and demand in the European acrylonitrile (ACN) market in H2 2024. Europe methanol run rates to remain low to counterbalance demand European methanol demand is likely to remain stable in the second half of 2024, with limited recovery in derivative markets expected. Europe chems stocks tumble amid global sell-off on US economic fears Chemical stocks in Europe slumped in early trading on Monday after a market rout in Asia following bearish US economic data at the end of last week prompted fears of a slowdown.

12-Aug-2024

SINGAPORE (ICIS)–Asian shares rebounded on Tuesday, staging a relief rally after historic losses the previous day, as fresh US economic data for July alleviated recession fears. Meanwhile, oil prices surged by over $1/barrel in early Asian trade, fueled by escalating concerns about the spreading conflict in the Middle East. Japanese Nikkei 225 index jumps 9.55% in early Asian trade Asian petrochemical shares follow regional market rebound, Asahi Kasei gains China's petrochemical futures continue decline In Europe the main stock markets stabilized, opening slightly up before falling back. The UK’s FTSE 100 was down 0.08% at 11:20 London time, while Germany’s DAX and France’s CAC 40 were 0.17% and 0.46% lower respectively. The stronger-than-expected US Institute for Supply Management (ISM) Services Survey for July helped ease growth worries. The overall services purchasing managers' index (PMI) improved to 51.4 in July, swinging into expansion and beating the consensus for a rise to 51.0 from 48.8 in June. A PMI reading above 50 indicates growth in the services sector. By 02:30 GMT, Japan's benchmark Nikkei 225 was up 9.55%, South Korea's KOSPI was 3.07% higher and Hong Kong's Hang Seng Index rose by 0.06%. Singapore's Straits Times Index (STI) was down by 0.96% while China’s benchmark Shanghai Composite Index inched 0.20% higher after shedding 1.54% on Monday. Asian petrochemical shares tracked the rebound in regional bourses, with Japanese major Asahi Kasei jumping nearly 14% and South Korean producer LG Chem up by 4.59%. China’s petrochemical futures, however, continued lower in early trade on Tuesday. At 10:30 local time (02:30 GMT), futures of petrochemical commodities, including plastics, methanol and glycols, were trading lower, after losing 0.4-2.1% in the previous session. Product Yuan (CNY)/tonne Change Linear low density polyethylene (LLDPE) 8,231 -0.3% Polyvinyl chloride (PVC) 5,650 -0.5% Ethylene glycol (EG) 4,590 -0.5% Polypropylene (PP) 7,570 -0.4% Styrene monomer (SM) 9,183 -0.2% Paraxylene * 8,120 -0.9% Purified terephthalic acid (PTA)* 5,644 -0.8% Methanol* 2,468 -0.5% Sources: Dalian Commodity Exchange, *Zhengzhou Commodity Exchange The global equity market sell-off intensified on Monday, with a wave of declines sweeping across major bourses worldwide. The rout began in Asia, where the Nikkei 225 index plummeted 12.4% day on day, marking its worst performance since 1987 while the KOSPI posted its steepest decline in its closing price to date. In Europe, the Stoxx Europe 600 index fell 2.2%, with all sectors and major indexes closing in negative territory. Utilities and oil and gas stocks suffered the steepest losses, leading the downturn in European markets. In the US, the Dow Jones Industrial Average plunged by about 1,000 points or down 2.6%, the Nasdaq dived 3.4% and the S&P 500 slid 3.0%. This marked the largest losses since September 2022 for the Dow and S&P, following a downturn late last week due to poor US jobs data and weak manufacturing PMI, which sparked recession fears. The unwinding of the yen "carry trade" after the Bank of Japan raised interest rates last week also added fuel to the retreat in global markets. For now, the US Federal Reserve has no intention of delivering an emergency rate cut before the Federal Open Market Committee (FOMC) meeting on 18 September, Singapore-based DBS Group Research said in a note on Tuesday. "The Fed wants markets to view the coming rate cuts as preserving the soft landing and supporting jobs, not as a delayed response to a weakening economy," it said. GEOPOLITICAL TENSIONS BOOSTING OILOil prices rose by more than $1/barrel in early Asian trade on Tuesday after dipping in the previous session, driven by supply concerns amid escalating tensions in the Middle East. "Markets are still waiting to see how Iran responds to Israel after it vowed retaliation for the assassination of Hamas’ political leader on Iranian soil," Dutch banking and financial information services firm ING said in a note. "Oil has been unable to escape the broader risk-off move seen across assets, as concerns grow over the potential for a US recession following some weaker macro data in recent weeks. This only adds to worries over Chinese demand." Reports that the Sharara oilfield in Libya has completely stopped production due to protests at the site also supported oil prices. This oilfield has a production capacity of 300,000 barrels/day but was producing around 270,000 barrels/day prior to the disruption. Focus article by Nurluqman Suratman Additional reporting by Fanny Zhang Thumbnail photo shows a stock market indicator board (Source: BIANCA DE MARCHI/EPA-EFE/Shutterstock) Updates, adding Europe detail in fourth paragraph

06-Aug-2024

SINGAPORE (ICIS)–Asian shares rebounded on Tuesday, staging a relief rally after historic losses the previous day, as fresh US economic data for July alleviated recession fears. Meanwhile, oil prices surged by over $1/barrel in early Asian trade, fueled by escalating concerns about the spreading conflict in the Middle East. Japanese Nikkei 225 index jumps 9.55% in early Asian trade Asian petrochemical shares follow regional market rebound, Asahi Kasei gains China's petrochemical futures continue decline The stronger-than-expected US Institute for Supply Management (ISM) Services Survey for July helped ease growth worries. The overall services purchasing managers' index (PMI) improved to 51.4 in July, swinging into expansion and beating the consensus for a rise to 51.0 from 48.8 in June. A PMI reading above 50 indicates growth in the services sector. By 02:30 GMT, Japan's benchmark Nikkei 225 was up 9.55%, South Korea's KOSPI was 3.07% higher and Hong Kong's Hang Seng Index rose by 0.06%. Singapore's Straits Times Index (STI) was down by 0.96% while China’s benchmark Shanghai Composite Index inched 0.20% higher after shedding 1.54% on Monday. Asian petrochemical shares tracked the rebound in regional bourses, with Japanese major Asahi Kasei jumping nearly 14% and South Korean producer LG Chem up by 4.59%. China’s petrochemical futures, however, continued lower in early trade on Tuesday. At 10:30 local time (02:30 GMT), futures of petrochemical commodities, including plastics, methanol and glycols, were trading lower, after losing 0.4-2.1% in the previous session. Product Yuan (CNY)/tonne Change Linear low density polyethylene (LLDPE) 8,231 -0.3% Polyvinyl chloride (PVC) 5,650 -0.5% Ethylene glycol (EG) 4,590 -0.5% Polypropylene (PP) 7,570 -0.4% Styrene monomer (SM) 9,183 -0.2% Paraxylene * 8,120 -0.9% Purified terephthalic acid (PTA)* 5,644 -0.8% Methanol* 2,468 -0.5% Sources: Dalian Commodity Exchange, *Zhengzhou Commodity Exchange The global equity market sell-off intensified on Monday, with a wave of declines sweeping across major bourses worldwide. The rout began in Asia, where the Nikkei 225 index plummeted 12.4% day on day, marking its worst performance since 1987 while the KOSPI posted its steepest decline in its closing price to date. In Europe, the Stoxx Europe 600 index fell 2.2%, with all sectors and major indexes closing in negative territory. Utilities and oil and gas stocks suffered the steepest losses, leading the downturn in European markets. In the US, the Dow Jones Industrial Average plunged by about 1,000 points or down 2.6%, the Nasdaq dived 3.4% and the S&P 500 slid 3.0%. This marked the largest losses since September 2022 for the Dow and S&P, following a downturn late last week due to poor US jobs data and weak manufacturing PMI, which sparked recession fears. The unwinding of the yen "carry trade" after the Bank of Japan raised interest rates last week also added fuel to the retreat in global markets. For now, the US Federal Reserve has no intention of delivering an emergency rate cut before the Federal Open Market Committee (FOMC) meeting on 18 September, Singapore-based DBS Group Research said in a note on Tuesday. "The Fed wants markets to view the coming rate cuts as preserving the soft landing and supporting jobs, not as a delayed response to a weakening economy," it said. GEOPOLITICAL TENSIONS BOOSTING OILOil prices rose by more than $1/barrel in early Asian trade on Tuesday after dipping in the previous session, driven by supply concerns amid escalating tensions in the Middle East. "Markets are still waiting to see how Iran responds to Israel after it vowed retaliation for the assassination of Hamas’ political leader on Iranian soil," Dutch banking and financial information services firm ING said in a note. "Oil has been unable to escape the broader risk-off move seen across assets, as concerns grow over the potential for a US recession following some weaker macro data in recent weeks. This only adds to worries over Chinese demand." Reports that the Sharara oilfield in Libya has completely stopped production due to protests at the site also supported oil prices. This oilfield has a production capacity of 300,000 barrels/day but was producing around 270,000 barrels/day prior to the disruption. Additional reporting by Fanny Zhang Thumbnail photo shows a stock market indicator board (Source: BIANCA DE MARCHI/EPA-EFE/Shutterstock) Focus article by Nurluqman Suratman

06-Aug-2024

HOUSTON (ICIS)–OCI said after facing difficult fertilizer market conditions in 2023 it is having a much better performance through Q2 of this year. The producer said they continue to see progress in efficiency gains as it remains focused on its global decarbonization strategy. In addition, over the past quarter OCI said it has taken significant steps towards advancing its strategic aims, which include accelerating expansion plans fueled by green methanol adoption and further diversification their European nitrates portfolio. “Following extremely challenging market conditions in 2023, conflated with prolonged turnarounds at some of OCI’s assets, OCI benefited in the second quarter of 2024 from sustained improved asset reliability across the business,” said Ahmed El-Hoshy, OCI Global CEO. “OCI’s manufacturing excellence program and investments to improve reliability continue to drive productivity gains, with asset utilization rates surpassing historical levels across both the nitrogen and methanol complex.” The producer said OCI Beaumont achieved a 96% rate through Q2, while OCI Nitrogen saw both ammonia lines running at approximately 90% level during the quarter. “The OCI team continues to do an outstanding job driving forward our operational excellence program, focused on reliability and process safety fundamentals,” El-Hoshy said. The producer also said their Texas Blue Clean Ammonia facility in Beaumont is on track to commence production in 2025.

02-Aug-2024

SINGAPORE (ICIS)–SABIC's net profit surged by 84.7% year on year to Saudi riyal (SR) 2.18 billion in the second quarter, supported by higher margins amid improved average selling prices, the chemicals giant said on Thursday. in Saudi riyal (SR) billions Q2 2024 Q2 2023 % Change H1 2024 H1 2023 % Change Sales 35.72 34.1 4.8 68.4 70.53 -3.0 Operational profit 2.1 1.64 28.0 3.31 3.4 -2.6 Net profit 2.18 1.18 84.7 2.43 1.84 32.1 “The global economy experienced a slight decline in the second quarter of 2024, primarily due to unexpected downturns in the recent economic indicators of major countries," said Abdulrahman Al-Fageeh, SABIC's CEO and executive board member. However, PMI data continued to indicate improvement in global economic conditions, while global trade showed signs of recovery, driven by higher exports, inventory restocking and increased financial activities, Al-Fageeh noted. "As inflationary pressures ease, some central banks have begun reducing interest rates, potentially providing additional stimulus to the global economy.” Q2 KEY POINTS – Q2 sales growth primarily attributed to the improvements of the average selling prices and a slight increase in sales volume. – Gross profit rose by SR1.76 billion due to improved profit margins for key products, partially offset by increased operating expenses from non-recurring charges. – A reversal of zakat provision, which is a mandatory Islamic tax on wealth, resulted in a non-cash benefit of SR545 million in Q2 2024, compared to a zakat expense of SR440 million in Q2 2023, due to updated regulations. – The petrochemicals segment's revenue increased by 10% quarter-over-quarter to SR 33.33 billion in Q2, driven by higher methanol sales volume. – EBITDA rose 37% to SR 4.88 billion in Q2, compared to SR 3.56 billion in Q1, due to higher sales volume and average selling prices. Market trends on quarter-on-quarter basis: – Methyl tertiary butyl ether (MTBE) prices remained stable, supported by summer demand. – Methanol prices held steady, driven by tight supply and low inventories in China, as well as strong demand from Asia. – Monoethylene glycol (MEG) prices were flat, due to higher supply and stable demand. – Polyethylene (PE) prices increased slightly, due to delayed Middle East deliveries and tightened Southeast Asian supplies. – Polypropylene (PP) prices rose, supported by tight container and vessel supply. – Polycarbonate (PC) prices slightly increased, despite global oversupply, with high freight rates adding pressure to subdued demand in automotive and construction sectors. Separately, SABIC has successfully commissioned its new hydrotreater plant in Geleen, the Netherlands.  This facility plays a crucial role in SABIC's advanced recycling process, transforming pyrolysis oil derived from post-consumer mixed plastic waste into high-quality alternative feedstock. This feedstock is then used to produce the SABIC's TRUCIRCLE circular polymers. H1 KEY POINTS – The company's revenue decreased by 3% year on year primarily due to a decline in sales volume. – Net profit rose on the back of an 18% increase in gross profit (SR1.96 billion) due to improved margins, partially offset by increased operating expenses from non-recurring charges. – Earnings were also supported by a SR245 million increase in the share of results from associates and non-integral joint ventures. OUTLOOK"Looking ahead, a global GDP growth of 2.7% is expected in 2024. At SABIC, our long-term focus remains on strategic portfolio optimization, restructuring of underperforming assets, and prioritizing sustainability and innovation," the company said. "We maintain a disciplined approach in managing our CAPEX, projecting a spending at the lower range of $4.0 to 5.0 billion for 2024." SABIC is 70%-owned by energy giant Saudi Aramco. Thumbnail shows a SABIC production facility (Source: SABIC)

02-Aug-2024

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 5 July 2024. OUTLOOK: Snug import supply supports Asia MEG amid slowing demand By Judith Wang 03-Jul-24 11:52 SINGAPORE (ICIS)–Monoethylene glycol (MEG) import supply in Asia for July is expected to stay snug in the near term, while demand looks set to slow down. INSIGHT: Methanol or ethylene, that is the question for China By Doris He 02-Jul-24 17:00 SINGAPORE (ICIS)–China’s methanol-to-olefins (MTO) industry has always been a focus of attention among methanol market players, as it accounts for half of overall demand. More attention has recently been shifted to ethylene, from the overall margins of a typical MTO plant in coastal regions. OUTLOOK: Asia nylon markets may slow down in H2 2024 on lengthened supply By Charmaine Lim 01-Jul-24 14:40 SINGAPORE (ICIS)–Nylon markets in Asia are expected to slow in H2 2024 compared to the first half of the year as the upcoming seasonal lull in Q3 approaches, with new capacities planned to start up in China this year. S Korea antidumping probe on China SM extends to Sept, discussions and hearings ongoing By Luffy Wu 01-Jul-24 15:22 SINGAPORE (ICIS)–The Korea Trade Commission is continuing with its anti-dumping probe against styrene monomer (SM) imports from China, with some discussions and hearings between the government and market players heard ongoing. PODCAST: China oxo-alcohols to face supply-demand pressure, new capacity to be a focus By Claire Gao 01-Jul-24 19:24 SINGAPORE (ICIS)–In this podcast, ICIS analyst Claire Gao explores the oxo-alcohols market overview and outlook. OUTLOOK: Persistent economic woes dampen Asia chemical freight demand By Hwee Hwee Tan 02-Jul-24 12:03 SINGAPORE (ICIS)–Asia’s chemical freight demand is dampened as macroeconomic doldrums were pulling back spot trades well into the third quarter despite reducing plant capacity losses for key liquid bulk products.

08-Jul-2024

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 28 June 2024. Asia melamine sees uptick on tighter supply; demand recovery uncertain By Joy Foo 28-Jun-24 12:54 SINGAPORE (ICIS)–Asia’s melamine spot market for China-origin product faced some pressure from early June due to lagging demand. China MEG market supported by limited import arrivals By Cindy Qiu 26-Jun-24 12:20 SINGAPORE (ICIS)–China’s monoethylene glycol (MEG) prices rose after falling in June, reflecting supply-demand dynamics, but the price growth may be capped by increasing domestic supply and curtailed downstream polyester production, despite limited import arrivals expected in July. India’s BPA import price surges; freight continues to exert pressure By Li Peng Seng 24-Jun-24 11:53 SINGAPORE (ICIS)–India’s bisphenol A (BPA) average import price hit its highest level in nearly 20 months recently due to firm ocean freight rates, a phenomenon that is expected to persist in the short term as vessel space is likely to stay tight. PODCAST: Asia base oils supply, demand to gradually rise in H2 By Damini Dabholkar 26-Jun-24 18:13 SINGAPORE (ICIS)–Asia’s base oils supply is expected to improve slightly in H2 2024, while a seasonal peak in overall demand is due to kick off in the later part of Q3. INSIGHT: Asia isocyanates H1 performance mixed, poor expectations for Q3 By Shannen Ng 26-Jun-24 14:30 SINGAPORE (ICIS)–Demand in Asia’s import markets for polymeric methylene diphenyl diisocyanate (PMDI) and toluene diisocyanate (TDI) is likely to remain limited in the upcoming summer months of July and August, and the outlook for late Q3 is uncertain. Chemanol to supply methanol to Saudi Amiral project over 20 years By Pearl Bantillo 25-Jun-24 12:52 SINGAPORE (ICIS)–Saudi Arabia's Methanol Chemicals Co (Chemanol) has signed a 20-year deal to supply methanol to the Amiral petrochemical project of Saudi Aramco Total Refining and Petrochemical Co (SATORP).

01-Jul-2024

SINGAPORE (ICIS)–Saudi Arabia's Methanol Chemicals Co (Chemanol) has signed a 20-year deal to supply methanol to the Amiral petrochemical project of Saudi Aramco Total Refining and Petrochemical Co (SATORP). Under the agreement, Chemanol will supply 100,000 tonnes of methanol to SATORP on an annual basis when the complex starts up in three years' time, Chemanol said in a filing on the Saudi Stock Exchange. “The commercial operation [of Amiral complex] and supply [of methanol] are planned to start by the end of 2027,” Chemanol said. It added that "the financial impact of this agreement is currently indeterminable due to the changes in market conditions and product prices at the time of starting to supply the methanol". SATORP, a joint venture between energy giant Saudi Aramco and French TotalEnergies, is expanding operations via building the $11bn Amiral complex in Jubail. The complex is expected to have a mixed-feed cracker and utilities, with a nameplate capacity of 1.65m tonnes/year of ethylene and related industrial gases. Engineering, procurement, and construction (EPC) contracts for the Amiral project were awarded in June 2023 to South Korea’s Hyundai Engineering & Construction. Aramco owns 62.5% of SATORP, while TotalEnergies holds the remaining stake of 37.5%. The companies made a final investment decision on Amiral in December 2022, to enable SATORP’s Jubail refinery to advance Aramco’s liquids-to-chemicals strategy. Amiral will enable SATORP to convert internally produced refinery off-gases and naphtha, as well as ethane and natural gasoline supplied by Aramco, into higher value chemicals. Thumbnail image: At a port in Jeddah, Saudi Arabia, 15 May 2023. (Ute Grabowsky/imageBROKER/Shutterstock)

25-Jun-2024

HOUSTON (ICIS)–Chemical companies have started the first half of 2024 announcing potential sales and separations of several businesses, which could lead up to busy cycle for mergers and acquisitions (M&A). Sustainability continues to influence M&A decisions, although it will unlikely lead to any large acquisitions. Private equity firms could play a larger role in M&A despite higher interest rates because financial investors have plenty of money. Electronic materials could be another M&A trend because of government incentives for the semiconductor industry. CHEMS EXPECT MORE M&AMore than half of the chemical executives who participated in a survey expect M&A activity to increase in the next 12-18 months, according to Kearney, a consulting firm that conducts an annual report about deal-making in the industry. By contrast, 18% expect M&A activity to decrease, and 32% expect activity to be roughly stable. The sentiment is more positive than surveys from the past few years, said Andy Walberer, partner and global chemicals lead at global strategy and management consultancy Kearney. He made his comments while discussing Kearney's recent M&A report. Part of that optimism comes from the divestment plans and strategic reviews recently announced by chemical companies, he said. Also, executives at chemical companies are no longer contending with the COVID-19 pandemic and the subsequent supply-chain disruptions. They have the headspace to think about medium- and long-term strategy, he said. SUSTAINABILITY CONTINUES INFLUENCING DEALSSustainability will unlikely lead to high-dollar deals, but it will still be a noteworthy trend, Walberer said. Chemical companies are scrambling to secure supplies of recycled and renewable feedstock. Chemical executives and Kearney have noted the gap between supply and demand for sustainable feedstock. To secure feedstock, companies have been establishing partnerships or acquiring businesses. Walberer expects that trend to continue. In other cases, chemical companies are making sustainability M&A decisions in response to government incentives and regulations, Walberer said. Kearney has seen some companies divest sections of portfolios because of high carbon emissions, Walberer said. PRIVATE EQUITY HAS PLENTY OF DRY POWDERHigher interest rates have made M&A more challenging for private equity firms because of their traditional reliance on debt-financed acquisitions. That said, private equity firms have built up large stashes of dry powder. They could put that money to work without debt, which has become more expensive because of higher interest rates. At the same time, chemical valuations have fallen. "We see PE very active," Walberer said. Walberer noted that financial investors made up 26% of chemical deals in 2023, up from 7% in 2022 and above the historic range of 15-20%. In particular, private equity firms may acquire some of the infrastructure assets that chemical companies are eager to divest. Dow had expressed interest in selling more of its infrastructure after agreeing to divest its rail assets at six sites in mid-2020. Recent and upcoming carveouts could provide private equity firms with more M&A opportunities. In December 2023, Solvay carved out its specialty business, called Syensqo, from its mostly commodity business. DuPont expects to complete its breakup into three companies in the next 18-24 months. CHANGING OUTLOOK FOR EUROPEEuropean chemical M&A experienced a slowdown because of the spike in energy and feedstock costs that followed the start of the war in Ukraine, according to the Kearney report. It should continue declining in the next 12-18 months before a possible rebound. "Amid ongoing challenges, big chemical players are under stress, prompting them to review their business models and restructure," Kearney said in a report regarding Europe. In some cases, the owner of a business may decide to put it on the market after realizing it is no longer a core part of the company, Walberer said. The corporation concludes that it is no longer the best owner of the business and decides to divest it. "There are a lot of good examples of how new owners have been able to improve the performance of the business," he said. DuPont's performance coatings business would later flourish as Axalta Coatings Systems. which was initially sold to Carlyle for $4.9 billion before becoming a publicly traded company. Another example is Nouryon, the surfactants business that was spun off from AkzoNobel. In other cases, the business's performance has suffered because of structural reasons, such as high costs, Walberer said. GOVERNMENT SEMICONDUCTOR INCENTIVES MAY DRIVE M&AElectronic materials could become another M&A trend because of the incentives being lavished by government, Walberer said. The US, China, the EU, Japan, Germany and South Korea are among the countries that created semiconductor incentive programs worth billions of dollars. DuPont's electronics business is one of the three that will break out of the company. That business itself is the product of acquisitions made by DuPont. CHEM M&A ACTIVITY OVER THE YEARSTypically, the value of chemical M&A is $100 billion to $120 billion per year, a level it reached in 2022 and 2023, Walberer said. The COVID pandemic and its subsequent recovery distorted M&A in 2020 and 2021. Values in 2019 and 2016 spiked because of large deals such as the Dow and DuPont merger and Aramco acquiring a large stake in SABIC. ANNOUNCEMENTS IN 2024The following lists some of the major chemical M&A announcements made so far in 2024. February 26: PPG explores strategic alternatives for its architectural coatings business in the US and Canada. It could reach a decision by the end of the third quarter. March 4: Evonik agrees to sell its superabsorbents business to International Investors Group (ICIG). March 13: Trinseo seeks to sell its stake in Americas Styrenics. It later clarified that the entire joint venture is for sale. May 6: BASF plans to sell its idled ammonia, methanol and melamine units in Ludwigshafen, Germany. May 8: LyondellBasell starts strategic review of the bulk of its operations in Europe. May 8: Shell agrees to sell its refinery and petrochemical assets in Singapore to the CAPGC joint venture. May 22: DuPont plans to break up into three companies, including one focusing on electronics and another on water. Insight article by Al Greenwood Thumbnail image by ICIS.

13-Jun-2024