Polycarbonate (PC)

SINGAPORE (ICIS)–SABIC has signed a potential investment agreement with the Fujian government on 1 August to build an engineering thermoplastics compounding plant in the Chinese province, the Saudi Arabia chemicals giant said on Tuesday. The planned compounding plant will be located in the Gulei Port Economic Development Zone at Zhangzhou in Fujian, it said in a statement without disclosing capacity details. It will primarily produce SABIC's pelletized LEXAN polycarbonate (PC) and CYCOLOY PC/acrylonitrile-butadiene-styrene (ABS) polymer blend for use in advanced materials. These materials will be tailored to the needs of industries including electrical and consumer electronics, automotive, and emerging sectors such as solar energy, electrification, and 5G. The site will include compounding lines, color development capabilities, and advanced equipment. SABIC currently operates a technology center in Shanghai and three compounding plants in China in Guangzhou, Shanghai and Chongqing. The new plant is also expected to create synergies with SABIC’s two existing joint ventures – SINOPEC SABIC Tianjin Petrochemical Co (SSTPC) and SABIC FUJIAN Petrochemicals Co (SFPC). “This investment agreement marks another significant milestone for SABIC’s growth in China and reflects our continued confidence in investing in the country," said Abdulrahman Al-Fageeh, SABIC's CEO. "Building on this, we will continue to collaborate with our existing global and local partners and customers to grow together in China.”

06-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

LONDON(ICIS)–European downstream demand remains low due to inflation and high interest rates. Add logistics issues and a continuous flow of imports to that, and the doom of European petrochemical industry begins. But with the recent reduction in interest rates by ECB and increased tariffs on Asian EVs, there is hope that the acetone and phenol derivative chain might come back to its glory. Europe ICIS editors Jane Gibson (acetone and phenol), Heidi Finch (bisphenol A and epoxy resins), Meeta Ramnani (polycarbonate), Mathew Jolin-Beech (methyl methacrylate) and ICIS senior analyst Michele Bossi (aromatics and derivatives) discuss the latest development in imports, bans and interest rates that are likely to impact the acetone, phenol and derivatives markets. Acetone market balanced to tight on export demand, slim import volumes and curtailed op rates as phenol struggles to find demand Cut of interest rates by ECB and tariffs on Chinese EVs increases hope of recovery of demand Dependency increases on Asian imports for PC BPA and epoxy players keep close eye on upstream, logistics and regulatory factors Challenging global as well as regional logistics impact MMA supply in Europe Podcast edited by Meeta Ramnani

14-Jun-2024

SINGAPORE (ICIS)–Saudi Aramco's net income fell by 14.4% year on year to Saudi riyal (SR) 102.3 billion in the first quarter amid lower crude oil volumes and weakening downstream margins, the energy giant said on Tuesday. in SR billions Q1 2024 Q1 2023 % Change Sales 402.04 417.46 -3.7 Operational Profit 202.05 222.18 -9.1 Net profit 102.27 119.54 -14.4 Early this year, Saudi Arabia’s government ordered Aramco to halt its oil expansion plan and to target a maximum sustained production capacity of 12m barrels/day, 1m barrels/day below the target announced in 2020. In the first quarter, Aramco's downstream income before interest, income taxes and zakat (annual Islamic tax) slumped by 64% year on year to SR4.62 billion. The drop in downstream earnings reflects weakening refining and chemicals margins, partially offset by inventory valuation movement, it said. The drop in group earnings was partially offset by lower production royalties, an increase in crude oil prices compared to the same period last year and lower income taxes and zakat. Despite having a capacity of 12 million barrels/day, Saudi Arabia currently produces about 9 million barrels/day as part of production cuts initiated by OPEC and its allies in October 2022 and further voluntary cuts by Saudi Arabia and other OPEC+ members in April 2023, all designed to stabilize oil prices. Following an OPEC+ meeting in June 2023, Saudi Arabia – the world's top crude exporter – announced a further oil production cut of 1 million barrels/day. “Looking ahead, I expect our portfolio to continue to evolve as we aim to contribute to an energy transition that offers solutions to climate challenges, but at the same time recognizes the need for affordable, reliable, and flexible energy supplies," added Amin Nasser, Aramco's President and CEO. Aramco's chemicals arm SABIC and China's Fujian Energy and Petrochemical Group Co held a groundbreaking ceremony to mark the start of construction at the SABIC Fujian Petrochemical Complex in China's Fujian province during the first quarter. The project will include a mixed-feed steam cracker with up to 1.8m tonne/year ethylene (C2) capacity and various downstream units producing ethylene glycols (EG), polyethylene (PE), polypropylene (PP) and polycarbonate (PC), among other products. Thumbnail photo : One of Aramco's US offices (Source: Saudi Aramco)

07-May-2024

SINGAPORE (ICIS)–SABIC's net income fell by 62% year on year to Saudi Riyal (SR) 250 million in the first quarter amid a drop in prices and sales volumes, the chemicals major said late on Wednesday. Losses from discontinued operations continue to weigh on results Overcapacity persists, pressuring the industry as market growth lags – CEO Spending range of $4 billion to $5 billion expected for 2024 in Saudi riyal (SR) billions Q1 2024 Q1 2023 % Change Sales 32.69 36.43 -10 Operational profit 1.21 1.76 -31 Net income 0.25 0.66 -62 "The decrease in net profit is attributed to lower revenues, lower results from associates and joint ventures in addition to losses from discontinued operations," SABIC said in a filing on the Saudi bourse, Tadawul. SABIC swung to a net loss of Saudi riyal (SR) 2.77bn ($739m) in 2023, largely due to one-off losses related to a divestment. Q1 revenue fell following a 3% decline in average selling prices and a 7% reduction in sales quantities. "Global economic uncertainty remained high during the first quarter of 2024, caused by geopolitical and logistical issues. Adding to these challenges were high global inflation levels and strict lending policies," SABIC CEO Abdulrahman Al-Fageeh said in a separate statement. Al-Fageeh in an investor call cautioned that overcapacity remains a challenge for the industry, creating a gap between supply and demand that is likely to persist throughout 2024. While positive demand signals emerged in Q1 2024, "the year outlook remains uncertain as the world still navigates through geopolitical situations with high inflation", he said. SABIC plans to adopt a disciplined approach to capital expenditure, projecting a spending range of $4 billion to $5 billion for the year, compared with $3.5 billion to 3.8 billion last year. NEW PROJECTS SABIC has started construction of its $6.4bn manufacturing complex in China’s southern Fujian province. The project "would add a qualitative range of products to SABIC’s portfolio of chemicals and polymers and enhance the company's presence in the Chinese market", the company said. The project will include a mixed-feed steam cracker with up to 1.8m tonne/year ethylene (C2) capacity and various downstream units producing ethylene glycols (EG), polyethylene (PE), polypropylene (PP) and polycarbonate (PC), among other products. SABIC also inaugurated the world’s first large-scale electrically heated steam olefins cracking furnace in Netherlands, which will pave the way for the company to fulfill its commitment to reach carbon neutrality by 2050. SABIC is 70%-owned by energy giant Saudi Aramco. ($1 = SR3.75) Thumbnail photo by SABIC Focus article by Nurluqman Suratman

02-May-2024

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 28 March 2024. Asia PX supply to decrease; demand outlook uncertain By Samuel Wong 28-Mar-24 13:08 SINGAPORE (ICIS)–Supply for paraxylene (PX) in Asia is expected to gradually decrease heading into the second quarter of 2024 as a result of several planned maintenance shutdowns. INSIGHT: GCC signs deal with Turkey to start FTA talks as part of diversification plans By Nurluqman Suratman 28-Mar-24 00:54 SINGAPORE (ICIS)–The Gulf Cooperation Council's (GCC) recent deal with Turkey to launch negotiations for a free trade agreement (FTA) further signals the bloc's commitment to diversify away from oil revenues. PODCAST: A tale of two olefins – diverging trends in Asia's olefins markets By Julia Tan 27-Mar-24 19:11 SINGAPORE (ICIS)–Asia's ethylene (C2) market will see northeast Asia supply in Q2 remain ample on the back of relatively high run rates at northeast Asian crackers. Saudi Aramco eyes further chemical investments in China with local partners By Nurluqman Suratman 26-Mar-24 12:03 SINGAPORE (ICIS)–China has a "vitally important" place in Saudi Aramco's global investment strategy, with the energy giant actively developing additional investment opportunities with its Chinese partners in the chemicals sector, Aramco president and CEO Amin Nasser said. China’s Sinopec 2023 profit falls 13% as chemicals incur loss for second year By Fanny Zhang 25-Mar-24 15:14 SINGAPORE (ICIS)–Chinese producer Sinopec posted a 12.9% decrease in full-year 2023 net profit as product prices fell across the board, dragged down by operating losses in chemicals. Asia PC makers grapple with poor Chinese demand By Li Peng Seng 25-Mar-24 10:57 SINGAPORE (ICIS)–Asia’s polycarbonate (PC) makers have been struggling to raise prices in China recently due to slow demand, while production costs continue to rise.

01-Apr-2024

SINGAPORE (ICIS)–China has a "vitally important" place in Saudi Aramco's global investment strategy, with the energy giant actively developing additional investment opportunities with its Chinese partners in the chemicals sector, Aramco president and CEO Amin Nasser said. The global oil major’s strategic goals in chemicals are “well-aligned” with China’s, he said in a keynote speech at the China Development Forum in Beijing on 25 March, noting that the country “is already a powerhouse representing 40% of global [chemical] sales”. Aramco, through its chemicals arm SABIC, is planning to increase its liquids-to-chemicals throughput to 4m barrels per day by 2030, Nasser said. Saudi Aramco accelerated its push into China’s refining and petrochemical sector last year with strategic investments that are aligned with Saudi Arabia's Vision 2030 diversification goals. This includes the 10% stake acquisition in Rongsheng Petrochemical Co for $3.4bn last year. Saudi Aramco, together with Chinese partners Norinco Group and Panjin Xincheng Industrial Group (PXIG), is also building a 300,000 bbl/day refining and ethylene-based steam cracking complex in Panjin City, in northeast China's Liaoning province at a cost of around $12bn. The Liaoning project is expected to come online in 2026. “We are also pleased that SABIC’s partnership in Fujian is on-track to commence construction of a major chemicals facility at an estimated cost of $6.4 billion,” Nasser said. The Fujian complex will include a mixed-feed steam cracker with up to 1.8m tonne/year ethylene (C2) capacity and various downstream units producing ethylene glycols (EG), polyethylene (PE), polypropylene (PP) and polycarbonate (PC), among other products. SABIC’s other major investments in China include three compounding plants in Shanghai, Guangzhou and Chongqing; a joint venture with Sinopec in Tianjin; a technology centre in Shanghai and a customer centre office in Guangzhou. SUSTAINABLE DEVELOPMENT Demand for lower greenhouse gas emissions (GHG) materials – especially advanced composites and non-metallics in general – is growing rapidly, Nasser noted. Aramco’s research efforts in developing GHG materials are consistent with Chinese President Xi Jinping’s stance that sustainable development is the “golden key” for future success, he said. “We agree with China’s pragmatic and prudent approach to energy transition…I believe there are wide-ranging opportunities to jointly develop advanced GHG emission reduction technologies.” China has distinct strengths in renewables and critical materials, while Aramco and Saudi Arabia have a clear interest in solar, wind, hydrogen, and electro fuels, Nasser said. “These areas have great long-term potential, and combining our strengths could match our ambitions,” he added. Focus article by Nurluqman Suratman

26-Mar-2024

SINGAPORE (ICIS)–Saudi Arabia’s chemicals major SABIC swung to a net loss of Saudi riyal (SR) 2.77bn ($739m) in 2023, largely due to one-off losses related to a divestment, while earnings from continued operations shrank amid challenging global market conditions. in Saudi Riyal (SR) bn 2023 2022 % Change Revenue 141.5 183.1 -22.7 EBITDA 19.0 36.4 -47.7 Net income from continuing operations 1.3 15.8 -91.8 Net income attributable to equity holders of the parent -2.8 16.5 – The company's net loss for 2023 was "driven mainly from the fair valuation of the Saudi Iron and Steel Co (Hadeed) business", SABIC in a filing to the Saudi bourse Tadawul on 27 February. In early September 2023, SABIC announced it had agreed to sell its entire stake in the Saudi Iron and Steel Co (Hadeed) to Saudi Arabia's sovereign wealth fund for SR12.5bn. The sale resulted in non-cash losses worth SR2.93bn. From continuing operation, full-year net income declined by 91.8% on reduced profit margins for major products, as well as lower earnings of joint ventures and associated firms. SABIC also incurred charges from non-recurring items amounting to SR3.47bn in 2023,“as a result of impairment charges and write-offs of certain capital and financial assets as well as provisions for the restructuring program in Europe and constructive obligations”. Meanwhile, SABIC’s average product sales price in 2023 fell by 21%, reflecting the global downturn in petrochemical markets, it said. Overall sales volumes fell by 2% year on year in 2023 amid sluggish end-user demand, the company said. "Year 2023 presented numerous challenges for the petrochemical industry – the market environment was shaped by lackluster macroeconomic sentiment, weak end-user demand, and a wave of incremental supply for a large suite of products," it said. The company's petrochemicals business posted a 20% year-on-year decline in sales to SR131.3bn in 2023, with EBITDA down by 42% at SR14.6bn. "The petrochemical industry navigates a challenging operating environment – underwhelming demand within our target markets led to lower year end product prices and there remains considerable uncertainty heading into the first quarter of 2024," SABIC CEO Abdulrahman Al-Fageeh said. "The announced divestment of Hadeed is proceeding as planned – this optimization of internal resources will enhance our core focus on petrochemicals," he said. SABIC is also pursuing a number of initiatives to address the "competiveness of our European assets" aimed at a "maintainable and modernized footprint in the region", Al-Fageeh added. The company plans a higher capital expenditure of between $4bn and 5bn in 2024, compared with $3.5bn-3.8bn last year. SABIC has started construction of its $6.4bn manufacturing complex in China’s southern Fujian province. The project will include a mixed-feed steam cracker with up to 1.8m tonne/year ethylene (C2) capacity and various downstream units producing ethylene glycols (EG), polyethylene (PE), polypropylene (PP) and polycarbonate (PC), among other products. SABIC is 70%-owned by energy giant Saudi Aramco. ($1 = SR3.75)

28-Feb-2024

LONDON (ICIS)–Red Sea shipping issues have been the hot topic in Q1, with import delays opening up domestic demand opportunities and leading to a firmer price sentiment in some markets. There has been some increase in buying in January, but underlying demand is yet to recover in a shaky macro-economic climate. Europe ICIS editors Jane Gibson (acetone and phenol), Heidi Finch (bisphenol A and epoxy resins), Mathew Jolin-Beech (methyl methacrylate) and Meeta Ramnani (polycarbonate) discuss the impact of rising sea freight and feedstock costs in the acetone, phenol and derivatives markets. Phenol and acetone markets look to downstream demand pull for support Red Sea crisis set to continue impacting MMA supply for remainder of Q1 Europe epoxy and BPA markets exposed to Red Sea issues/import delays, tendency firmer European PC suppliers benefiting from the unavailability of Asian imports Podcast editing by Meeta Ramnani

09-Feb-2024

SINGAPORE (ICIS)–Saudi petrochemical giant SABIC has made a final investment decision (FID) on a joint venture $6.4bn manufacturing complex in Fujian in southern China. The complex will include a mixed-feed steam cracker with up to 1.8m tonne/year ethylene capacity and various downstream units producing ethylene glycols (EG), polyethylene (PE), polypropylene (PP), polycarbonate (PC), among others, SABIC said in statement on 21 January. SABIC Fujian Petrochemicals Co (SFPC) – a 51:49 joint venture between SABIC Industrial Investment Co, a wholly owned SABIC subsidiary, and Fujian Fuhua Gulei Petrochemical – will operate the project. Based on the project’s environment impact assessment report document approved in June 2022, the expected PE and PP capacities would be 1m tonnes/year and 950,000 tonnes/year, respectively. Construction is expected to begin during the first half of 2024, with start-up to commence from the second half of 2026 and will last for six months, SABIC said. “The FID is a significant milestone for SABIC’s business expansion and development in China,” SABIC CEO Abdulrahman Al-Fageeh said. “The project aims to support our goal of diversifying our feedstock sources and establishing a petrochemical manufacturing presence in Asia for a wide range of products,” he said. China is the world’s second-biggest economy and remains a major importer of petrochemicals despite strong capacity additions in recent years. SABIC’s other major investments in China include three compounding plants  – in Shanghai, Guangzhou and Chongqing; a joint venture with Sinopec in Tianjin; a technology center in Shanghai; and a customer centre office in Guangzhou. The company is 70%-owned by energy giant Saudi Aramco, which is the world’s biggest crude exporter. Aramco has been taking strategic stakes in Chinese refining and petrochemical projects since last year as it aggressively expands downstream, in line with a diversification strategy under its Vision 2030. Among the major deals sealed and completed in 2023 was the $3.4bn acquisition of a 10% stake in Chinese producer Rongsheng Petrochemical, which has a majority stake in Zhejiang Petroleum and Chemical Co Ltd’s (ZPC) integrated and petrochemical complex. ZPC can process 800,000 bbl/day of crude oil, with an ethylene capacity of 4.2m tonnes/year. Focus article by Fanny Zhang Thumbnail image: Shandong Free Trade Zone, Qingdao, China – 1 January 2024 (Costfoto/NurPhoto/Shutterstock)

22-Jan-2024