Phthalic anhydride (PA)

PARIS (ICIS)–Global specialty chemicals producer Arkema aims to supercharge growth in key targeted markets by leveraging proprietary chemistries to develop new products with clear sustainability and performance benefits. From France-based Arkema’s spinoff from energy giant Total (now TotalEnergies) in 2006, the company has undergone a major transformation from a diversified chemical company with a mixed bag of commodity, intermediates and specialty businesses, to nearly a pure play specialty and materials business today. “We had to revisit the strategy of the company in-depth, and we had a strong belief at that time that there was an exponential growth [opportunity] in innovative and high performance materials,” said Thierry Le Henaff, chairman and CEO of Arkema, in a video interview with ICIS. “So our strategy was to focus on specialty materials around three segments – adhesives, coatings solutions, and also high performance additives and polymers in order to make Arkema a pure specialty player,” he added. Le Henaff is the 2024 ICIS CEO of the Year, having been selected in a vote among his peers – the CEOs and senior executives in the ICIS Top 40 Power Players. M&A STRATEGY AND LATEST DEALSThe latest move in the company’s transformation is the acquisition of Dow’s flexible packaging laminating adhesives business for $150 million which just closed on 2 December. The deal adds about $250 million in sales to Arkema’s Bostik adhesives business, and Le Henaff calls it a “step change” for Bostik in the flexible packaging adhesives market, giving it a unique opportunity to be a key partner for customers across the packaging industry. Arkema will spend around $50 million in implementation costs or capex related to the acquisition and is targeting about $30 million in annual cost and development synergies after five years. “We are going to continue to invest in… cost optimization, but at the same time continue to change the portfolio, which means to invest in M&A,” said Le Henaff. The Dow deal comes on top of major acquisitions such as a 54% stake in South Korea-based PI Advanced Materials (polyimide films for mobile devices and electric vehicles) in December 2023 and US-based Ashland’s performance adhesives business (pressure-sensitive adhesives for auto and buildings) in February 2022. While the company will now focus more on organic growth, bolt-on acquisitions will be an important part of Arkema’s strategy in the coming years, he noted. One such smaller bolt-on deal was the April 2024 acquisition of a 78% stake in Austria-based Proionic, a start-up company for the development of ionic liquids, a key component for the next generation of EV batteries. HYPER GROWTH SUBMARKETSSpeaking of organic growth, the Arkema CEO has an ambitious goal of growing sales in certain parts of its specialty businesses at a rate triple that of its overall business through 2028. These high growth areas are green energy and electric mobility; advanced electronics; efficient buildings and homes; sustainable lifestyle; and water filtration, medical devices and crop nutrition. “It is really with this combination of our technologies [in] these submarkets… where we want to multiply by three, the average growth of Arkema. This means that in this market, we could deliver 12% organic growth while for the average of Arkema it would be 4%,” said Le Henaff. Arkema aims to grow these businesses from around 15% of sales in 2023, to 25% of total sales, which are projected to be around €12 billion, by 2028. These high growth areas with three times higher sales than the group average will account for 50% of the company’s R&D budget. “We have about 15 technologies, superior technologies, where we can really differentiate ourselves. Our strategy is really to take advantage of this sustainability trend,” said Le Henaff. “In fact, the answer to climate change is through the solutions we can develop for customers. This is really the core of our strategy,” he added. Within electric mobility, in addition to the acquisition of a majority stake in Proionic, Arkema in January 2024 took a stake in Tiamat, a pioneer in sodium-ion battery technology – a potential alternative to lithium-ion batteries. RENEWABLE RAW MATERIALS AND DECARBONIZATIONArkema is also undertaking organic growth projects in these hyper growth submarkets. One key project is in bio-based polyamide 11, used in bicycle helmets, consumer goods, wire and cable and medical equipment. “We are adding more and more renewable raw materials in the product range we are offering to our customers. One good example and very emblematic [of our strategy] is this polyamide 11 made from castor oil, which is a fully sustainable, renewable, bio-sourced, high performance polymer,” said Le Henaff. “We are very proud of it, and we have just invested in a plant in Singapore to accelerate the growth of this polymer,” he added. Its Rilsan bio-based PA 11 has an 80% lower carbon footprint versus traditional polyamide resins using fossil-based raw materials and conventional energy sources, according to the company. Arkema also recently launched more sustainable adhesive solutions, including its Kizen LIME range of packaging adhesives made with a minimum of 80% renewable ingredients, and Bostik Fast Glue Ultra+ for do-it-yourself (DIY) applications with 60% bio-based materials. Along with helping its customers decarbonize, the company is also decarbonizing its own operations, targeting a 48.5% reduction in Scope 1 and 2 emissions, and a 54% reduction in Scope 3 emissions by 2030 versus a 2019 base. One major project is to decarbonize its acrylics production in Carling, France by installing new purification technology. The €130 million project should result in a 20% reduction in CO2 emissions at the site by 2026. GLOBAL FOOTPRINTAlong with its transformation into pure play specialties, Arkema has also diversified its global footprint, with more exposure in North America than Europe. Today Arkema is a global player with close to 40% of sales in North America, 25% in Asia and around a third in Europe, versus Europe at about 60% of sales when it was spun off in 2006, the CEO pointed out. “I still believe in Europe, but it's clear that we have a gap in competitiveness and also in demand. The pace of demand is slower for Europe than it is for the rest of the world,” said Le Henaff. “It's very important that our governments and the European Commission understand that the cost of doing business in Europe is too high compared to what it is in the rest of the world because of legislation, because of the cost of energy, because of the cost of raw materials,” he added. There is much work to do on this front to get Europe back to competitiveness and growth, especially for chemicals, he said. DEMONSTRATING RESILIENCEArkema’s geographic diversification and specialties focus has made it more resilient to challenging macroeconomic markets. In Q3, sales rose 2.9% year on year to €2.39 billion and adjusted earnings before interest, tax, depreciation and amortization (EBITDA) increased 5.4% to €407 million, the latter driven by 9.0% growth in specialty materials, offsetting a 7.3% decline in intermediates segment. Its overall EBITDA margin expanded to 17.0% versus 16.6% a year ago. A strong focus on efficiency and a healthy balance sheet has served it well. “Arkema over 20 years has doubled in size and we have a set number of headcount. This means that competitiveness and productivity is very important for Arkema, even if we are less vocal than other companies on this topic,” said Le Henaff. On the balance sheet side, net debt of around €3.11 billion is “tightly controlled” at a conservative two times last 12 months EBITDA. TRANSFORMATION NEVER OVERKey to success for Arkema is to continuously evolve, be nimble and be open to growth opportunities. “It’s never over. The status quo in this world is not possible, because the world is changing all the time, because of demography, because of geopolitics, for plenty of reasons, so we have to move forward,” said Le Henaff. “There are plenty of opportunities, but the opportunities of today won't be the opportunities of tomorrow. So we really need to have a company which is structured to be able to catch these new opportunities which arise all the time,” he added. Meanwhile, on the macro-outlook for 2025, he is cautiously optimistic. “We are all cautious because we thought 2023 would be the year of the rebound and also 2024, so we have to be cautious for 2025. But I'm cautiously optimistic,” said Le Henaff. “I still think that we should have some kind of rebound for 2025. We'll see if I'm right or not, but in the meantime, I would say the most important thing is we need to continue [evolving]. We are very glad to be in a unique position because at the end of 2024, we will have nearly fully financed billions of euros of projects, including external growth and organic growth,” he added. PEOPLE AND CULTUREKey to any ongoing transformation is of course the people involved. Arkema deems it critical to keep its people engaged with the mission. “I think, in a world which is quite volatile, quite changing, it's very important to have fixed points,” said Le Henaff. First, the long-term strategy and vision has to be attractive. But equally as important is having a corporate culture with clear and simple values. These five values for Arkema are: Solidarity, Performance, Simplicity, Empowerment and Inclusion. It is the culture that amplifies the inherent strengths in an organization, including technology, and smooths the path for continued successful transformation in an uncertain world, he said. Interview article by Joseph Chang Watch the exclusive Q&A video interview with Arkema CEO Thierry Le Henaff on the 2024 ICIS CEO of the Year landing page.

05-Dec-2024

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 20 September. Sluggish demand keeps Europe oxo-alcohols prices stable despite some constraints Prices in the European oxo-alcohols spot market held steady for all grades this week, although some producers had supply constraints, as demand remained underwhelming. Africa PE/PP prices tumble on high stocks, fierce competition among sellers African polyethylene (PE) and polypropylene (PP) prices are stable to down this week, as buyers increasingly find themselves in a strong position. Europe BD supply likely to stay tight until year-end Several production events have shaped the European butadiene (BD) market in 2024, and this looks set to continue through the fourth quarter. Europe MA spot prices stable, but offers for October firming on reduced local output European maleic anhydride (MA) spot prices were stable last week, but offers for October delivery were firming. Urea short-term trend firms after India tender, but global demand still lacking A lack of buying interest at all import hubs except for India will keep any upside capped for urea, but the short-term trend has stabilized after National Fertilizers Limited (NFL) bought over a million tonnes.

23-Sep-2024

SAO PAULO (ICIS)–The Brazilian government’s committee on foreign trade Gecex-Camex approved late on Wednesday an increase in import taxes on more than 80 chemical and fertilizers products, with the new rate up to 20% for most materials. Among some of the products affected are widely used chemicals such polypropylene (PP), polyethylene, (PE), polyvinyl chloride (PVC), polystyrene (PS), and polyethylene terephthalate (PET). See bottom list for details. Previous rates stood between 7.6% and 12.6%. The new rates will apply from October and are valid for one year. The decision is yet to be approved by Mercosur, the trading common area formed by Argentina, Paraguay, and Uruguay, as well as Brazil, which is the dominant economy in Mercosur. The cabinet, thus, gave in partly to the pressure by chemical producers in Brazil. Earlier this year, individual companies as well as the trade group representing producers, Abiquim, had proposed to increase tariffs in more than 100 chemicals. The decision was widely anticipated by analysts, and it is expected to immediately prop up earnings for some of Brazil’s largest producers such polymers major Braskem or chlor-alkali major Unipar. Brazil has been the recipient of large amounts of imports from Asia and, to a lesser extent, the US which have greatly dented domestic producers’ market share. Sectors that opposed increasing tariffs, including plastic transformers represented by Abiplast, expressed their disappointment after Wednesday’s measure by Gecex-Camex. “[The decision was taken even though] Abiplast and other trade groups have exhaustively demonstrated to the government the harmful impacts of increases in import tariffs on raw materials,” said Jose Ricardo Roriz Coelho, president of Abiplast, in a letter to the trade group’s members seen by ICIS. “We will continue to fight to ensure that these unreasonable measures are reversed.” Product Current Tax Rate Proposed Tax Rate Plaintiff Phosphoric acid with iron content less than 750 ppm 9% 17.5% Abiquim Sodium hydrogen carbonate (bicarbonate) 9% 20%* Abiquim Isobutyl alcohol (2-methyl-1-propanol) 10.80% 20% Abiquim Isobutyl alcohol (2-methyl-1-propanol) 10.80% 20% Elekeiroz Inc. Phenol (hydroxybenzene) and its salts 7.20% 12.6%* Abiquim Phenol (hydroxybenzene) and its salts 7.20% 12.6%* Rhodia Brasil SA Butanone (methyl ethyl ketone) 10.80% 20% Abiquim Ethyl acetate 10.80% 20% Abiquim n-butyl acetate 10.80% 20% Abiquim n-butyl acetate 10.80% 20% Rhodia Brasil SA Other saturated acyclic monoalcohol acetates, c atom <= 8 10.80% 20% Abiquim Methacrylic acid methyl esters 10.80% 20% Abiquim Methacrylic acid methyl esters 10.80% 20% Unigel Holdings Inc. Adipic acid 9% 20% Abiquim Adipic acid 9% 20% Rhodia Brasil SA Maleic anhydride 10.80% 20% Abiquim Maleic anhydride 10.80% 20% Elekeiroz Inc. Fumaric acid, its salts and esters 10.80% 20% Abiquim Dioctyl orthophthalates 10.80% 20% Abiquim Dioctyl orthophthalates 10.80% 20% Elekeiroz Inc. Dinonyl or didecyl orthophthalates 10.80% 20% Abiquim Hexamethylenediamine and its salts 10.80% 20% Abiquim Monoethanolamine and its salts 12.60% 20% Abiquim Other anionic organic surface-active agents, whether or not put up for retail sale, not classified under previous codes 12.60% 20% Abiquim Polyethylene with a density of less than 0.94, with filler 12.60% 20% Abiquim Polyethylene with a density of less than 0.94, without filler 12.60% 20% Abiquim Other unfilled polyethylenes, density >= 0.94, in primary forms 12.60% 20% Abiquim Other copolymers of ethylene and vinyl acetate, in primary forms 12.60% 20% Abiquim Copolymers of ethylene and alpha-olefin, with a specific gravity of less than 0.94 12.60% 20% Abiquim Unfilled polypropylene in primary form 12.60% 20% Abiquim Propylene copolymers, in primary forms 12.60% 20% Abiquim Expandable polystyrene, unfilled, in primary form 12.60% 18% Abiquim Other styrene polymers, in primary forms 12.60% 20% Abiquim Other styrene polymers, in primary forms 12.60% 20% Unigel Holdings Inc. Polyvinyl chloride, unmixed with other substances, obtained by suspension process 12.60% 20% Abiquim Polyethylene terephthalate of a viscosity index of 78 ml/g or more 12.60% 20% Abiquim Polyethylene terephthalate of a viscosity index of 78 ml/g or more 12.60% 20% Alpek Polyester Pernambuco SA Other unsaturated polyethers, in primary forms 12.60% 20% Abiquim Ex – Surfactant polymer class preparation, silicone free 12.60% 12.60% Abiquim Ex – Solvent-free modified polyester class preparation 12.60% 12.60% Abiquim White mineral oils (vaseline or paraffin oils) 3.60% 35% Abiquim Silicon dioxide obtained by chemical precipitation 9% 18% Abiquim Silicon dioxide obtained by chemical precipitation 9% 17% Rhodia Brasil SA Other silicon dioxides 0% 18% Abiquim Commercial ammonium carbonates and other ammonium carbonates 9% 18% Abiquim Styrene 9% 18% Abiquim Styrene 9% 18% Unigel Holdings Inc. Butan-1-ol (n-butyl alcohol) 10.80% 20% Abiquim Butan-1-ol (n-butyl alcohol) 10.80% 20% Elekeiroz Inc. Propylene glycol (propane-1, 2-diol) 10.80% 20% Abiquim Dipropylene glycol 12.60% 20% Abiquim Triacetin 10.80% 20% Abiquim Triacetin 10.80% 20% Denver Specialty Chemicals 2-Ethylexanoic acid (2-ethylexoic acid) 10.80% 20% Abiquim 2-Ethylexanoic acid (2-ethylexoic acid) 10.80% 20% Elekeiroz Inc. Salts and esters of adipic acid 10.80% 20% Abiquim Other esters of orthophthalic acid 10.80% 20% Abiquim Other esters of orthophthalic acid 10.80% 20% Elekeiroz Inc. Phthalic anhydride 10.80% 20% Abiquim Phthalic anhydride 10.80% 20% Petrom Petrochemicals Mogi das Cruzes S/A Ammonium nitrate, even in aqueous solution 0% 15% Abiquim Pigments and preparations based on these pigments 12.60% 20% Abiquim Linear alkylbenzene sulfonic acids and their salts 12.60% 23% Abiquim Organic surface-active agents, non-ionic 12.60% 23% Abiquim Alkylbenzene mixtures 10.80% 20% Abiquim Stearic acid (industrial monocarboxylic fatty acid) 5.40% 35% Abiquim Stearic alcohol (industrial fatty alcohol) 12.60% 20% Abiquim Sodium methylate in methanol 12.60% 20% Abiquim Other ethylene polymers, in primary forms 12.60% 20% Abiquim Filled polypropylene, in primary form 12.60% 20% Abiquim Other polystyrenes in primary forms 12.60% 20% Abiquim Other polystyrenes in primary forms 12.60% 20% Unigel Holdings Inc. Polyvinyl chloride, unmixed with other substances, obtained by emulsion process 12.60% 20% Abiquim Polymethyl methacrylate, in primary form 12.60% 20% Abiquim Polymethyl methacrylate, in primary form 12.60% 20% Unigel Holdings Inc. Other polyether polyols, in primary forms 12.60% 20% Abiquim Other polyesters in liquids and pastes 12.60% 20% Abiquim Other polyurethanes in liquids and pastes 12.60% 20% Abiquim Carboxymethyl cellulose with content >=75%, in primary forms 12.60% 20% Abiquim Carboxymethyl cellulose with content >=75%, in primary forms 12.60% 20% Denver Specialty Chemicals Styrene-butadiene rubber (SBR), food grade according to the Food Chemical Codex, in primary forms 10.80% 22% Abiquim Acrylonitrile-butadiene rubber in sheets, plates, etc. 10.80% 35% Abiquim Latex of other synthetic or artificial rubbers 10.80% 35% Abiquim  

19-Sep-2024

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 16 August. Europe MA prices remain under upward pressure as new production issue curbs Sept availability European maleic anhydride (MA) spot prices continue to be under upward pressure this week as constraints in northwest Europe seem poised to restrict availability for September, too. Europe fatty alcohol spot prices stabilise after bullish H1 August European mid-cut fatty alcohol spot prices held steady this week after two consecutive weeks of €50/tonne increases. Eurozone chemical production up in June, Q2 GDP rises 0.3% Chemical production firmed in the eurozone for the second consecutive month amid a wider decline in industrial production during the month, with GDP in the region continuing to firm, growing by 0.3% in the second quarter. Germany’s Aug economic outlook down on US economy, Mideast concerns Sentiment for Germany’s economic outlook fell sharply in August on concerns over the US economy and the protracted conflict in the Middle East. MA rebounds in northwest Europe on new outage, price gap with south of region grows European maleic anhydride (MA) spot prices firmed this week on supply constraints in northwest and central Europe that arose in the first half of the week.

19-Aug-2024

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended Friday 28 July. Soft MA demand pressures prices lower, Red Sea tensions cap supply European maleic anhydride (MA) spot prices have softened as availability improved while poor demand slowed orders for July deliveries. Europe capro supply could be more balanced in July Following the severe shortages the European caprolactam (capro) market has struggled with over the past few months, supply is expected to be more balanced with demand in July. Europe orthoxylene sentiment for July stable-to-soft as feedstock costs show a mixed trend Europe orthoxylene (OX) contract price discussions for July are due to start next week amid persistently weak demand and mixed feedstock xylenes movements. Covestro to save €400m/year by 2028 through focus on digitalization, AI Covestro will save €400 million annually in material and personnel costs by the end of 2028 through a transformation programme focused on digitalization and artificial intelligence, it said on Tuesday. ADNOC and Covestro in concrete negotiations following €11.7bn offer Covestro and ADNOC have begun concrete negotiations on a possible investment by the Abu Dhabi oil company that would value the German chemical producer’s equity at €11.7bn, Covestro said on Monday.

01-Jul-2024

SINGAPORE (ICIS)–Thailand's SCG Chemicals (SCGC) has obtained government approval for its 200,000 tonne/year joint venture bio-ethylene plant in Map Ta Phut, paving the way for the company to reach its target of producing 1m tonnes/year of green polymers by 2030. SCGC, Braskem joint venture firm eyes green downstream PE output Final investment decision on bio-ethylene project likely by Q4 SCGC focusing on increasing recycled plastic production and use The Thai baht (Bt) 19.3 billion ($526 million) bio-ethylene plant will use agricultural products such as sugarcane, cassava and corn as feedstock, the Thailand Board of Investment (BOI) in a statement issued on 14 June. The project will be operated by Braskem Siam Co, a 51:49 joint venture between Brazilian producer Braskem and SCGC. The plant, which will built in Rayong province, will enable production of bio-based polyethylene (PE) in Thailand which will be the first of its kind outside Brazil. SCGC’s parent firm Siam Cement Group (SCG), in a 11 June slide presentation posted on its website, said that it will likely make a final investment decision (FID) on the bio-ethylene project by the fourth quarter of this year, the company said in presentation slides posted on 11 June. The chemicals arm of the Thai conglomerate has set a target of production 1 million tonnes/year of green polymers by 2030, by leveraging strategic partnerships and innovative technologies to drive its expansion, it said. As of end-2023, the company was producing around 218,000 tonnes/year of environment-friendly plastics. SCGC Green Polymers Growth Plans Source: SCGC As part of its green polymer expansion plans, SCG in February this year announced a Bt173 million investment to hold a 3% stake in Netherlands-based renewable chemicals technology firm Avantium. Avantium‘s proprietary technology can be used to produce a variety of sustainable chemicals, including bio-based polyethylene (PE) and bio-based polyamide (PA). SCGC and Avantium last year agreed to develop polymers based on sustainable carbon feedstocks such as those from biomass or carbon from air, and scale up a pilot plant in the next two years to produce 10 tonnes/year of the material. On the recycling front, SCGC is aiming to increase its sales volumes of green polymers from odorless post-consumer recycled resin (PCR) high density polyethylene (HDPE) via its partnership with Portugal-based recycled plastic producer Sirplaste. The Thai producer owns 70% of Sirplaste. In September 2023, SCGC achieved a fivefold increase in production capacity for odorless HDPE PCR resin to 45,000 tonnes/year following installation of new machinery at Sirplaste's plant, based on SCG’s June 11 slides. SCGC has also invested in Kras, a Dutch company that specializes in managing waste materials, to develop a comprehensive recycled plastic production system that meets global demand, especially in Europe, "where the need for environmentally friendly packaging is continuously growing". In May, SCGC and Dow signed a Memorandum of Understanding (MOU) to transform 200,00 tonnes/year plastic waste into circular products by 2030. The initial phases of the partnership will concentrate on building a robust materials ecosystem in Southeast Asia. This will involve establishing partnerships with existing suppliers for PCR and developing advanced technological solutions for waste sorting, mechanical recycling (MR), and advanced recycling (AR) in Thailand. Separately, SCGC parent firm SCG has also received approval to invest Bt6 billion in a co-generation power plant within the Map Ta Phut Industrial Estate in Rayong province. This plant will have a production capacity of 130 megawatts (MW) of power and 160 tonnes of steam per hour and will primarily supply electricity to factories within the industrial estate. Focus article by Nurluqman Suratman ($1 = Bt36.72) Thumbnail image: At the Laem Chabang Port in Chonburi Province, Thailand, 24 January 2022. (Xinhua/Shutterstock)

19-Jun-2024

RIO DE JANEIRO (ICIS)–Huntsman’s assets in Europe are not energy intensive and have been spared from the energy crisis, but more broadly, the 27-country EU is still lacking a comprehensive policy to address the issue, the CEO at US chemicals major Huntsman said on Friday. Peter Huntsman, one of the chemical industry’s most outspoken CEOs, said the company is not planning to divest any asset in Europe but said the region should stop its “nonsense” about reindustrialization and implement policies that create actual economic growth. The CEO added he is feeling “bullish” about the coming quarters regarding demand, arguing the chemical industry had gone to “hell” and was just coming back from the steep low prices of 2023. In North America, Huntsman said the construction industry should post a marked recovery in the coming quarters after two years in the doldrums because of high interest rates because, he argued, even with current interest rates, the industry will adapt. Huntsman’s sales and earnings in the first quarter fell again, year on year, as higher sales volumes could not offset low selling prices; the company said, however, that a notable improvement in sales volumes quarter on quarter should be a signal that the recovery is underway. Among others, Huntsman produces polyurethanes (PUs), which are widely used in the construction and automotive sectors. EUROPE NONSENSEPeter Huntsman on Friday first referred to the EU’s need to stop its “nonsense” about reindustrialisation, without elaborating further, but he was more measured when asked about the company’s assets in that region. He nonetheless made clear that he thinks European governments have yet to formulate, two years into the region’s biggest energy crisis in decades, appropriate policies to address the issue. “What I am most concerned about Europe is high energy costs. Most of our businesses there are not energy intensive assets, so they are competitive; in fact we have some strong businesses there, and our margins in Advanced Materials [the division] are stronger there than in other parts of the world,” said Huntsman, speaking to reporters and chemical equity analysts on Friday. “There are businesses in Europe in which you will do OK, such as aerospace, lightweighting. But if you are energy intensive, if you produce fertilizers, glass, cement… you have some portfolio concerns there. Energy prices are too high, and this is not being addressed by governments, they still have to come up with realistic policies to address that.” Europe’s construction has also taken a hit from the crisis after interest rates shot up to bring down inflation, with projects put on hold and many building companies in financial distress. Huntsman’s CEO said he is not hoping for a strong recovery anymore in that sector in Europe, but simply for stability, which could come with governments taking more decisive action to prop up GDP growth. “If we look at the past two years… We are looking for stability: it is the volatility that concerns us the most. We need to see Europe stop its the nonsense policies around reindustrialization and get the economy growing once again,” he said. See Huntsman assets in Europe at bottom table. NORTH AMERICA CONSTRUCTIONPeter Huntsman was feeling more optimistic about North America’s construction sector, where even if high interest rates stay for longer, builders will adapt to the situation, easing the way towards a recovery. “US builders are doing two things: if interest rates were to stay where they are, they are going to adapt, perhaps building smaller units, and if rates do come down, that will open up demand quite a bit higher than it has been in the last couple of years. There are big gaps [in housing stock] which need to filled,” said Huntsman. “I am increasingly feeling better and better [about an improvement in demand]. In Q1 we saw a lot of inventory drawdown, now we are seeing a slow, steady recovery as we try to get back to average inventory levels. By and large inventory levels feel pretty thin in MDI [methylene diphenyl diisocyanate] and we look forward to moderate growth in coming quarters.” MDI is consumed mainly in PU foams, used in construction, refrigeration, packaging, and insulation. MDI is also used to make binders, elastomers, adhesives, sealants, coatings and fibers. Huntsman’s CFO, Philip Lister, also at the press conference, added that in a normal year the company’s growth in volumes from the first quarter to the second would be around 5%, as construction and other seasonal activities enter their annual peak. “This year, we are expecting more [than 5% growth],” said Lister. CHINA ELECTRIC VEHICLESHuntsman’s CEO said China’s electric vehicle (EV) sector continues to boom, although potential trade restrictions in the EU, after those imposed by the US, could start denting China’s dominance in that sector. However, the company also knows what China’s dominance in the sector, thanks to the country’s strong public support for it, can mean for western producers: in 2023, Huntsman suspended an EV battery materials project in the US because of aggressive imports from China. But the CEO added that even if China’s EV sector slowed down, the company would still be able to tap into other growing markets such as lightweighting or insulation, among others. “The automotive sector continues to be one of the strongest areas of growth in China. How long that continues [remains to be seen], but probably for some time still,” said Huntsman. “There is a broader question about [trade in the EV chain] with the US, which has been extremely limited, or Europe, where there is a lot of talk about limitations to China’s EVs.” He added that despite sluggish activity in the residential construction sector because of financial woes in building companies, exemplified by the demise of major company Evergrande, subsectors such as energy conservation, insulation, building materials and infrastructure are still doing well. “By and large we are seeing in China a slow but steady recovery in volumes and pricing. Elsewhere, I am getting more bullish. A year ago, we were in a nightmare, and we expected a recovery in the second half [of 2023] which didn’t happen and got worse and worse, until we found ourselves in hell,” said Huntsman. “At the beginning of this year we have seen good, reliable, consistent growth. What we need to see is that growth continues in the second half of this year.” HUNTSMAN ASSETS IN EUROPE Product Location Capacity (in tonnes) Aniline Wilton, UK 340,000 Epoxy resins Bergkamen, Germany 18,000 Monthey, Switzerland 120,000 Duxford, UK 10,000 Isocyanates Runcorn, UK 70,000 Maleic anhydride (MA) Moers, Germany 105,000 MDI Rozenburg, The Netherlands 470,000 Nitrobenzenes Wilton, UK 455,000 Polyalolef Grimsby, UK 15,000 Polyester polyols Huddersfield, UK 20,000 Rozenburg, The Netherlands 86,000 Unsaturated polyester resins (UPRs) Ternate, Italy 8,000 Source: ICIS Supply & Demand Database Front page picture: Huntsman’s headquarters in The Woodlands, Texas  Source: Huntsman Additional reporting by Miguel Rodriguez-Fernandez

03-May-2024

SAO PAULO (ICIS)–Brazilian chemicals producers are lobbying hard for an increase in import tariffs for key polymers and petrochemicals from 12.6% to 20%, and higher in cases, hoping the hike could slow down the influx of cheap imports, which have put them against the wall. For some products, Brazil’s chemicals trade group Abiquim, which represents producers, has made official requests for the import tariffs to go up to a hefty 35%, from 9% in some cases. On Tuesday, Abiquim said several of its member companies “are already talking about hibernating plants” due to unprofitable economics. It did so after it published another set of somber statistics for the first quarter, when imports continued entering Brazil em masse. Brazil’s government Chamber of Foreign Commerce (Camex) is concluding on Tuesday a public consultation about this, with its decision expected in coming weeks. Abiquim has been busy with the public consultation: it has made as many as 66 proposals for import tariffs to be hiked for several petrochemicals and fertilizers, including widely used polymers such polypropylene (PP), polyethylene (PE), polyethylene terephthalate (PET), polystyrene (PS), or expandable PS (EPS), to mention just a few. Other chemicals trade groups, as well as companies, have also filed requests for import tariffs to be increased. In total, 110 import tariffs. HARD TO FIGHT OFFBrazil has always depended on imports to cover its internal chemicals demand, but the extraordinary low prices coming from competitors abroad has made Brazil’s chemicals plant to run with operating rates of 65% or lower. More and more, the country’s chemicals facilities are becoming white elephants which are far from their potential, as customers find in imported product more competitive pricing. Considering this dire situation and taking into account that the current government in Brasilia led by Luiz Inacio Lula da Silva may be more receptive to their demands, Abiquim has put a good fight in publica and private for measure which could shore up chemical producers’ competitiveness. This could come after the government already hiked import tariffs on several products in 2023 and re-introduced a tax break, called REIQ, for some chemicals which had been withdrawn by the previous Administration. While Brazil’s chemicals production competitiveness is mostly affected by higher input costs, with natural gas costs on average five times higher than in the US, the industry is hopeful a helping hand from the government in the form of higher import tariffs could slow down the flow of imports into Brazil. As a ‘price taker region’ given its dependence on imports, Latin American domestic producers have taken a hit in the past two years. In Brazil, polymers major Braskem is Abiquim’s commanding voice. Abiquim, obviously, has always been very outspoken – even apocalyptic – about the fate of its members as they try to compete with overseas countries, namely China who has been sending abroad product at below cost of production. The priorities in China’s dictatorial system are not related to the balance of markets, but to keep employment levels stable so its citizens find fewer excuses to protest against the regime which keeps them oppressed. Capitalist market dynamics are for the rest of the world to balance; in China’s dictatorial, controlled-economy regime the priority is to make people feel the regime’s legitimacy can come from never-ending economic growth. The results of such a policy for the rest of the world – not just in chemicals but in all industrial goods – is becoming clear: unprofitable industries which cannot really compete with heavily subsidized Chinese players. The results of such a policy in China are yet to be seen, but subsiding at all costs any industry which creates employment may have debt-related lasting consequences: as they mantra goes, “there is no such thing as a free lunch.” Abiquim’s executive president urged Lula’s cabinet to look north, to the US, where the government has imposed hefty tariffs on almost all China-produced industrial goods or raw materials for manufacturing production. “[The hikes in import tariffs] have improved the US’ scenario: despite the aggressive advance in exports by Asian countries, the drop in US [chemicals] production in 2023 was of 1%, while in Brazil the index for production fell nearly by 10%,” said Andre Passos. “The country adopted an increase in import taxes of over 30% to defend its market from unfair competition. The taxation for some inputs, such as phenol, resins and adipic [acid], for example, exceeds three digits. “Here, we are suggesting an increase in rates to 20% in most claims … We need to have this breathing space for the industry to recover,” he concluded. As such, the figures for the first quarter showed no sign of imports into Brazil slowing down. The country posted a trade deficit $9.9 billion during the January-March period; the 12-month accumulated (April 2023 to March 2024) deficit stood at $44.7 billion. A record high of 61.2 million tonnes of chemicals products entered Brazil in Q1; in turn, the country’s industry exported 14.6 million tonnes. Abiquim proposals for higher import tariffs Product Current import tariff Proposed tariff Expandable polystyrene, unfilled, in primary form 12.6% 20% Other polystyrenes in primary forms 12.6% 20% Carboxymethylcellulose with content > =75%, in primary forms 12.6% 20% Other polyurethanes in liquids and pastes 12.6% 20% Phthalic anhydride 10.8% 20%  Sodium hydrogen carbonate (bicarbonate) 9% 35% Copolymers of ethylene and alpha-olefin, with a density of less than 0.94 12.6% 20% Other orthophthalic acid esters 11% 20% Other styrene polymers, in primary forms 12.6% 20% Other silicon dioxides 0% 18% Other polyesters in liquids and pastes  12.6% 20% Commercial ammonium carbonates and other ammonium carbonates 9% 18% Other unsaturated polyethers, in primary forms 12.6% 20% Polyethylene terephthalate, with a viscosity index of 78 ml/g or more 12.6% 20% Phosphoric acid with an iron content of less than 750 ppm 9% 18% Dinonyl or didecyl orthophthalates 11% 20% Poly(vinyl chloride), not mixed with other substances, obtained by suspension process 12.6% 20% Poly(vinyl chloride), not mixed with other substances, obtained by emulsion process 12.6% 20% Methyl polymethacrylate, in primary form  12.6% 20% White mineral oils (vaseline or paraffin oils) 4% 35% Other polyetherpolyols, in primary forms 12.6% 20% Other unfilled epoxy resins in primary forms 12.6% 20% Silicon dioxide obtained by chemical precipitation 9% 18% Acrylonitrile-butadiene rubber in plates, sheets, etc 11% 35% Other organic anionic surface agents, whether or not put up for retail sale, not classified under previous codes 12.6% 23% Phenol (hydroxybenzene) and its salts 7% 20% Fumaric acid, its salts and esters 10 ,8% 20% Plasticizers and plastics 10 ,8% 20% Maleic anhydride 10 ,8% 20% Adipic acid salts and esters 10 ,8% 20% Propylene copolymers, in primary forms 12.6% 20% Adipic acid 9% 20% Unfilled polypropylene, in primary form 12.6% 20% Filled polypropylene, in primary form 12.6% 20% Methacrylic acid methyl esters 10 ,8% 20% Other ethylene polymers, in primary forms 12.6% 20% Acrylic acid 2-ethylhexyl esters 0% 20% 2-Ethylexanoic acid (2-ethylexoic acid) 10. 8% 20% Other copolymers of ethylene and vinyl acetate, in primary forms 12.6% 20% Other unfilled polyethylenes, density >= 0.94, in primary forms 12.6% 20% Polyethylene with a density of less than 0.94, unfilled 12.6% 20% Other saturated acyclic monoalcohol acetates, c atom <= 8 10. 8% 20% Polyethylene with a density of less than 0.94, with filler 12.6% 20% Triacetin 10. 8% 20% Sodium methylate in methanol 12.6% 20% Stearic alcohol (industrial fatty alcohol) 12.6% 20% N-butyl acetate                              11% 20% Stearic acid (industrial monocarboxylic fatty acid) 5% 35% Alkylbenzene mixtures 11% 20% Organic, non-ionic surface agents 12.6% 23% Ammonium nitrate, whether or not in aqueous solution 0.0% 15% Monoethanolamine and its salts 12.6% 20% Isobutyl alcohol (2-methyl-1-propanol) 10.8% 20% Butan-1-ol (n-butyl alcohol) 10.8% 20% Styrene-butadiene rubber (SBR), food grade as established by the Food Chemical Codex, in primary forms 10.8% 22% Styrene                                9% 18% Hexamethylenediamine and its salts 10.8% 20% Latex from other synthetic or artificial rubbers 10.8% 35% Propylene glycol (propane-1, 2-diol) 10.8% 20% Preparations 12.6% 20% Linear alkylbenzene sulfonic acids and their salts 12.6% 23% 4,4'-Isopropylidenediphenol (bisphenol A, diphenylolpropane) and its salts 10.8% 20% Dipropylene glycol 12.6% 20% Butanone (methyl ethyl ketone) 10.8% 20% Ethyl acetate                                 10.8% 20% Methyl-, ethyl- and propylcellulose, hydroxylated 0.0% 20% Front page picture: Chemical production facilities outside Sao Paulo  Source: Union of Chemical and Petrochemical industries in the state of Sao Paulo (Sinproquim) Focus article by Jonathan Lopez Additional information by Thais Matsuda and Bruno Menini

30-Apr-2024

SINGAPORE (ICIS)–Japan's Mitsubishi Gas Chemical (MGC) will suspend its production of orthoxylene (OX) and phthalic anhydride (PA) at its Mizushima site from mid-January 2025, and is selling off its 50% stake in CG Ester Corp, effectively exiting the plasticizers business. Continued unprofitability, aging equipment, and forecasts of shrinking demand prompted MGC's decision to halt OX and PA production next year, the company said in a statement on 26 February. MGC produces 30,000 tonnes/year of OX and 40,000 tonnes/year of PA at its Mizushima site. OX is mainly used as a raw material for PA, as well as for solvents and pharmaceutical and agrochemical intermediates. PA is used as a raw material for plasticizers. In a separate statement, MGC said that it has sold off its 50% stake in plasticizers maker CG Ester Corp to its partner JNC Corp in a deal worth yen (Y) 734m ($4.9m). The share transfer was scheduled for 29 March this year, after which, CG Ester will be fully owned by JNC. CG Ester can produce 70,000 tonnes/year of plasticizers via two production sites in Mizushima and Ichihara, according to its website. CGE will cease manufacturing at its Mizushima plant by March 2025 and will take over operations of JNC Petrochemical Corp's manufacturing facility in Ichihara and will also continue to operate its own facility at the site, JNC Corp said in a statement. ($1 = Y150.5) Additional reporting by Michelle Liew

01-Mar-2024

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 2 February. Europe February ethylene contract price up €5/tonne from January The European ethylene contract reference price for February has been set at €1,190/tonne, up by €5/tonne from January. Europe PO 2024 adder decreases by €350/tonne The European propylene oxide (PO) contract adder for 2024 has decreased by €350/tonne. European R-PET flake continues strong upward trend into February Prices for free delivered (FD) colourless (C) recycled polyethylene terephthalate (R-PET) flake and food-grade pellet (FGP) have increased for February as buyers conclude deals to secure limited material. Europe PA demand uptick to persist in February Sentiment among European phthalic anhydride (PA) producers is firming even though demand increases seen so far have not compensated for price losses during contractual negotiations in late 2023, according to buyers and sellers. Fertilizer powerhouse China increased 2023 market share despite government restrictions China's fertilizer exports increased last year after the blip of 2022.

05-Feb-2024