Mono propylene glycol (MPG)

HOUSTON (ICIS)–The threat of additional US tariffs, retaliatory tariffs from trading partners, and their potential impact is fostering a heightened level of uncertainty, dampening consumer, business and investor sentiment, along with clouding the 2025 outlook for chemicals and economies. The US chemical industry, a massive net exporter of chemicals and plastics to the tune of over $30 billion annually, is particularly exposed to retaliatory tariffs. Chemical company earnings guidance for Q1 and all of 2025 is already subdued, with the one common theme from the investor calls being little-to-no help expected from macroeconomic factors this year. Tariffs only cloud the outlook further. Tariffs have long been a feature of US economic and fiscal policy. In the period to the 1940s, tariffs were used as a major revenue source to fund the federal government before the introduction of the income tax and were also used to protect domestic industries. After 1945, a neo-liberal world order arose, which resulted in a lowering of tariffs and other trade barriers and the rise of globalization. With the collapse of the Doha Round of trade negotiations in 2008, this drive stalled and began to reverse. Heading into this year’s International Petrochemical Conference (IPC) hosted by the American Fuel & Petrochemical Manufacturers (AFPM), it is clear that the neo-liberal world order has ended. Rising geopolitical tensions and logistics issues from COVID led many firms to diversify supply chains, leading to reshoring benefiting India, Southeast Asia, Mexico and others, and to the rise of a multi-polar world. It is also resulting in the rise of tariffs and other trade barriers around the world, most notably as US trade policy. FLUID US TRADE POLICYThe US administration’s policy stance on tariffs has been very fluid, changing from day to day. It is implementing 25% tariffs on steel and aluminium imports on 12 March and has already placed additional tariffs of 20% on all imports from China as of 4 March (10% on 4 February, plus 10% on 4 March). On 11 March, the US announced steel and aluminium tariffs on Canada would be ramped up to 50% in retaliation for Canadian province Ontario placing 25% tariffs on electricity exports to the US. Later, Ontario suspended the US electricity surcharge, and the US did not impose the 50% steel and aluminium tariff. The US had placed 25% tariffs on imports from Canada (10% on energy) and Mexico on 4 March but then on 5 March exempted automotive and then on 6 March announced a pause until 2 April. China retaliated by implementing 15% tariffs on US imports of meat, fish and various crops, along with liquefied natural gas (LNG) and coal. Canada retaliated with 25% tariffs on C$30 billion worth of goods on 4 March and then with the US pause, is delaying a second round of tariffs on C$125 billion of US imports until 2 April. Mexico planned to retaliate on 9 March but has not following the US pause. US President Trump has also threatened the EU with 25% tariffs. We have a trade war and as 1960s Motown artist Edwin Starr sang, “War, huh, yeah… What is it good for?… Absolutely nothing.” Canada, Mexico and China are the top three trading partners of the US, collectively making up over 40% of US imports and exports. The three North American economies, until recently, had low or non-existent tariffs on almost all of the goods they trade. This dates back to the 1994 NAFTA free trade agreement, which was renegotiated in 2020 as the USMCA (US-Mexico-Canada Agreement). A reasoning behind the tariff threats on Canada and Mexico is to force Canada and Mexico to stop illegal drugs and undocumented migrants from crossing into the US. These tariffs were first postponed in early February after both countries promised measures on border security, but apparently more is desired. But the US also runs big trade deficits with both countries. Here, tariffs are seen by the administration as the best way to force companies that want US market access to invest in US production. IMPACT ON AUTOMOTIVEUS automakers are the most exposed end market to US tariffs and potential retaliatory tariffs, as their supply chains are even more highly integrated with Mexico and Canada following the USMCA free trade deal in 2020. The USMCA established Rules of Origin which require a certain amount of content in a vehicle produced within the North America trading partners to avoid duties. For example, at least 75% of a vehicle’s Regional Value Content must come from within the USMCA partners – up from 62.5% under the previous NAFTA deal. Supply chains are deeply intertwined. In the North American light vehicle industry, materials, parts and components can cross borders – and now potential tariff regimes – more than six times before a finished vehicle is delivered to the dealer’s lot. US prices for those goods will likely rise. The degree to which they rise (extent to which tariffs costs will pass through) depends upon availability of alternatives, structure of the domestic industry and pricing power, and currency movements. In addition, some of the Administration’s polices dealing with deregulation, energy, and tax will have a mitigating effect on the negative impact of tariffs for the US. The 25% steel and aluminium tariffs will add nearly $1,500 to the cost of a light vehicle and will result in lower sales for the automotive industry which has been plagued in recent years by affordability issues. If it had been implemented, the 50% tariff on steel and aluminium imports from Canada would only compound the pricing impact. All things being equal, 25% tariffs on the metals would push down sales by about 525,000 units but some of the favorable factors cited above as well as not all costs being passed through to consumers will partially offset the effects of higher metal prices. Partially is the key word. Since so many parts, components, and finished vehicles are produced in Canada and Mexico, US 25% tariffs on all imports from Canada and Mexico would add further to the price effects. The economic law of demand holds that as prices of a good rise, demand for the good will fall. ECONOMIC IMPACTTariffs will dampen demand across myriad industries and markets, and could add to inflation. By demand, we mean the aggregate demand of economists as measured by GDP. Aggregate demand primarily consists of consumer spending, business fixed investment, housing investment, and government purchases of goods and services. Tariffs would likely add to inflation but the effects would begin to dissipate after a year or so. By themselves, the current round of tariffs on steel and aluminium and on goods from Canada, Mexico and China will dampen demand due to higher prices. Plus, as trading partners retaliate, US exports would be at risk. Preliminary estimates suggest the annual impact from these tariffs – in isolation – on US GDP during the next three years could average 1.4 percentage points from baseline GDP growth. Keep in mind that there are many moving parts to the economy and that the more favorable policies could offset some of this and, as a result, the average drag on GDP could be limited to a 0.5 percentage point reduction from the baseline. POTENTIAL GDP IMPACT OF US TARIFFS – 20% ON CHINA, 25% ON MEXICO AND CANADA Real GDP is a good proxy for what could happen in the various end-use markets for plastic resins and the reduction of US economic growth. In outlying years, however, tariffs could support reshoring and business fixed investment. The hits on Mexico and Canada would be particularly. China’s economic growth would be affected as well. But China can shift exports to other markets. Mexico and Canada have fewer options. Resilience will be key to growing uncertainty and will lead to shifting trade patterns and new market opportunities. This is where scenarios, sound planning and strategies, and leadership come into play. US EXPORTS AT RISK, SUPPLY CHAINS TO SHIFTUS PE exports are particularly vulnerable to retaliatory tariffs. The US is specifically targeting tariffs on countries and regions that absorb around 52% of US PE exports – China, the EU, Mexico and Canada, according to an ICIS analysis. Aside from PE, the US exports major volumes of PP, ethylene glycol (EG), methanol, PVC, styrene and vinyl chloride monomer (VCM), along with base oils to countries and regions targeted with tariffs. The US exports nearly 50% of PE production with China and Mexico being major outlets. China has only a 6.5% duty on imports of US PE, having provided its importers with waivers in February 2020 that took rates to pre-US-China trade war levels. The US-China trade war under the first US Trump administration started in 2018 with escalating tariffs on both sides, before a phase 1 deal was struck in December 2019 that removed some tariffs and reduced others. After the waivers offered by China to importers in February 2020, US exports of PE and other ethylene derivatives surged before falling back in 2021 from the COVID impact. They then rocketed higher through 2023 and remained at high levels in 2024. Since 2017, the year before the first US-China trade war, US ethylene and derivative exports to China are up more than 4 times, leaving them more exposed than ever to China. With tariff escalation, chemical trade flows would shift dramatically. Just one example is in isopropanol (IPA). Shell in Sarnia, Ontario, Canada, produces IPA, of which over 85% is shipped to the US, mainly to the northeast customers, said ICIS senior market analyst Manny Borges. “It is a better supply chain for the customers instead of shipping product from the US Gulf,” said Borges. “With the increase in tariffs, we will see several customers shifting volumes to domestic producers or countries where the tariffs are not applied,” he added. US IPA producers are running their plants at around 67% of capacity on average and have sufficient capacity to supply the entire domestic market, the analyst pointed out. This dynamic, where US producers supply more of the local market versus imports, would likely play out across multiple product chains as well, especially in olefins where the US is more than self-sufficient. Even as the US is more than self-sufficient in, and a big net exporter of PE, ethylene glycols, polypropylene (PP) and polyvinyl chloride (PVC), it imports significant quantities from Canada. In the event of a 25% tariff on imports from Canada, US producers could easily fill the gap, although logistics would have to be reworked. Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC takes place on 23-25 March in San Antonio, Texas. Visit the US tariffs, policy – impact on chemicals and energy topic page Visit the Macroeconomics: Impact on chemicals topic page Insight article by Kevin Swift and Joseph Chang

12-Mar-2025

LONDON (ICIS)–The largest propylene oxide/styrene monomer (POSM) production complex in Europe is expected to close in October, union FNV said on Tuesday, after an agreement was reached between operator LyondellBasell and employees at the site. The Maasvlakte, Netherlands, plant, which has been offline for most of the last 12 months, will close on 1 October, according to an FNV representative, after the majority of union members at the site backed a deal on severance pay. “The plant at Maasvlakte will close definitely at October 1st,” the representative said. “A vast majority of our union members at Lyondell has voted in favor of a social plan in which the company and the trade unions have come to an agreement on a severance pay and outplacement,” the representative added. LyondellBasell declined to comment on the plans, with a spokesperson stating that no definitive decisions have been made at any of their operations. Joint venture partner Covestro also declined to comment. The unit was taken down for economic reasons between July and October 2024, before being brought down again in December. With a production capacity of 315,000 tonnes/year of PO and 680,000 tonnes/year of SM, the complex is the largest production facility of its type in Europe, but has faced increasing challenges as global capacities have grown and energy costs increased. The Netherlands site is among six in Europe that LyondellBasell placed under strategic review late last year, with the rest centered in the company’s core olefins and polyolefins (O&P) business. The five O&P sites under scrutiny in Europe are in Berre, France; Muenchmuenster, Germany; Brindisi, Italy; Tarragona, Spain; Carrington, UK; and Maasvlakte, Netherlands. Including Maasvlakte, around 15.1 million tonnes/year of chemicals production capacity is currently being rationalised, with the wave of closures rocking the industry increasingly rippling out to other regions, particularly Asia. Thumbnail photo: The Maasvlakte site (Source: LyondellBasell) Additional reporting by Fergus Jensen

11-Mar-2025

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 7 March. LyondellBasell to build metathesis unit to make propylene LyondellBasell has approved plans to build a metathesis unit in Channelview, Texas, that will convert ethylene into propylene, the producer said on Monday. INSIGHT: US to export more chem feedstocks amid drought of US cracker projects US production of ethane, propane and other natural gas liquids (NGLs) will continue to grow while domestic demand for these chemical feedstocks will likely remain flat, a trend that is contributing to a surge in new terminal projects that will export these products to growing markets overseas. Chem shares plunge as US proceeds with 25% Canadian, Mexican tariffs US-listed shares of chemical companies fell sharply – many by more than 5% – on Monday as the US proceeds with plans to impose tariffs on Canada, Mexico and China, its three biggest trading partners. INSIGHT: Retaliatory tariffs to compound pain for US chemicals and key end markets The US ramping up additional tariffs on China to 20% and kicking off 25% tariffs on Mexico and Canada (10% on energy) as of 4 March will hit chemical and key end markets and products as players rush to reconfigure supply chains. US to delay automobile tariffs for one month The US will grant a one-month tariff exemption for the nation's automobile industry, the government said on Wednesday. US to delay tariffs on USMCA-compliant goods from Mexico for one month – Trump The US will delay until 2 April imposing tariffs on Mexican goods that fall under the US-Mexico-Canada Agreement (USMCA), President Donald Trump said on Thursday, 6 March in a post on Truth Social. Wall Street turns more bearish on US chemicals on tariff uncertainty Wall Street analysts are turning more negative on the earnings outlook for chemical companies on increasing US tariff uncertainty. Canada delays second phase of retaliatory tariffs, Ontario plans electricity export tax Canada is delaying its second phase of retaliatory tariffs on goods imported from the US to 2 April, a minister announced on Thursday evening. INSIGHT: US tariffs may persist as they become policy pillar The US government is coming to embrace tariffs as a central part of its economic and fiscal policies, a development that could see such measures persist and threaten margins for the nation's chemical producers.

10-Mar-2025

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 7 March. China Feb manufacturing activity rebounds on seasonality By Fanny Zhang 03-Mar-25 11:47 SINGAPORE (ICIS)–China's official manufacturing purchasing managers' index (PMI) in February marked a return to expansion territory after a soft January reading as factories resumed operations after the Lunar New Year (LNY) holiday. INSIGHT: China set to maintain "around 5%" growth target By Nurluqman Suratman 04-Mar-25 11:00 SINGAPORE (ICIS)–China's "Two Sessions" this week will be closely watched as the government work report is released, outlining the country's policy priorities for the year amid escalating trade tensions with the US. UPDATE: ADNOC, OMV agree on polyolefins JV worth $60 billion By Jonathan Yee 04-Mar-25 16:45 SINGAPORE (ICIS)–Austria’s OMV and the UAE’s Abu Dhabi National Oil Co (ADNOC) on Tuesday agreed to form a $60 billion joint venture (JV) by combining polyolefins businesses Borouge and Borealis following two-year talks. Asia acetic acid market softens on easing supply, downstream turnarounds By Hwee Hwee Tan 05-Mar-25 14:05 SINGAPORE (ICIS)–Asian spot prices for acetic acid imports and exports are being dampened by lengthening supply and softening demand tied to a downstream sector. China targets record 2025 budget deficit to rev up economy By Fanny Zhang 05-Mar-25 14:50 SINGAPORE (ICIS)–China has set its 2025 fiscal deficit target at a record yuan (CNY) 5.66 trillion ($780 billion), equivalent to around 4% of GDP, to fund the government’s stimulus measures and ensure the world’s second-biggest economy would post a 5% growth. Thai central bank lowers interest on slower economic growth, global trade tensions By Jonathan Yee 05-Mar-25 15:34 SINGAPORE (ICIS)–Slower than expected economic growth and downside risks such as escalating global trade tensions spurred by US trade policy led Thailand’s central bank to cut its key interest rate by 0.25 percentage points to 2.00 on 26 February, the Bank of Thailand (BOT) said. PODCAST: Asia propylene demand curbed by weaker PO margins By Damini Dabholkar 06-Mar-25 00:07 SINGAPORE (ICIS)–The northeast Asian propylene import markets have been weighed down by lengthening supply amid restarts at propane dehydrogenation (PDH) units. However, lower affordability levels from derivatives such as propylene oxide (PO) have also curbed import demand. China PP suppliers persist with export end goal amid margin challenges By Jackie Wong 06-Mar-25 11:08 SINGAPORE (ICIS)–Despite poor margins for polypropylene (PP), suppliers in China are expected to continue to persevere with their plans to expand their export sales network and win market shares in southeast Asia. South Korea Feb inflation eases amid growing economic headwinds By Nurluqman Suratman 06-Mar-25 13:50 SINGAPORE (ICIS)–South Korea's headline inflation eased in February, giving the central bank flexibility to loosen monetary policy to boost economic activity amid a slowdown. Thai PTTGC hopes to snap out of losses; eyes US ethane feed for crackers By Nurluqman Suratman 07-Mar-25 14:46 SINGAPORE (ICIS)–Imports of US ethane feedstock will be a key component of Thai producer PTT Global Chemical's (PTTGC) broader strategy to recover from recent losses, alongside initiatives to enhance competitiveness and expand into high-value businesses.

10-Mar-2025

HOUSTON (ICIS)–Shipping container rates from Asia to both US coasts fell again this week as capacity has grown and as volumes have fallen after frontloading to beat tariffs, and liquid tanker rates rose on the transatlantic eastbound route and fell on the US Gulf to Asia trade lane. CONTAINER RATES Rates from Shanghai to Los Angeles fell by 9% this week, according to supply chain advisors Drewry, while rates from Shanghai to New York fell by 6%, as shown in the following chart. Rates to both US coasts are now at their lowest of the year, according to Drewry data. Global average rates in Drewry’s World Container Index fell by 3% and are also at their lowest over the past year, as shown in the following chart. Drewry expects rates to continue to decrease next week due to increased shipping capacity. Rates from online freight shipping marketplace and platform provider Freightos showed significant decreases this week, although their rates are slightly higher than Drewry’s. Judah Levine, head of research at Freightos, said that tariffs – or the threat of tariffs – led to many importers frontloading volumes to beat the announced levies. “The president’s proposed 60% tariffs on Chinese goods could go into effect as soon as April – as could a wider application of reciprocal tariffs on numerous countries – meaning the window to receive goods before then is about closed,” Levine said. Levine said that the combination of a seasonal slump in demand and the possible end of frontloading likely drove the sharp fall in transpacific ocean rates last week. “If frontloading of the past few months was significant enough, we could also expect to see subdued peak season demand and rates as a result,” Levine said. Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), are shipped in pellets. Titanium dioxide (TiO2) is also shipped in containers. They also transport liquid chemicals in isotanks. LIQUID TANKER RATES MIXED US chemical tanker freight rates assessed by ICIS were mixed week on week. Trade routes from the US remain mixed with several trade lanes slightly higher and others lower. Cargo moving into Asia weakens following the recent tariff announcements and this route has recently seen a decrease of cargoes, as the tariffs have all but halted any spot activity for this trade lane. As a result, rates have dipped from the previous week. On the other hand, the rates from USG to Rotterdam experienced upward pressure. For this trade lane freight rates for March have strengthened, given the amount of space left. A shipowner said it is expecting the trend to continue throughout March, with higher contract of affreightment (COA) utilization leaving very little available space. From the USG to Brazil, this market has remained relatively unchanged but is experiencing some downward pressure. While the market continues to be active it is further influenced by freight availability and a swing in trade lane dynamics. Demand remains soft particularly for larger parcels further pressuring some downward movement. On the USG to India trade lane, the market remains extremely soft with plenty of space available as outsiders have entered the market. As a result, this has placed downward pressure, and rates could fall further on the route if this persists. Several inquiries were seen for monoethylene glycol (MEG), methanol, ethanol, and vinyl acetate monomer (VAM), but few fixtures were seen in the market. With additional reporting by Kevin Callahan

07-Mar-2025

SINGAPORE (ICIS)–The northeast Asian propylene import markets have been weighed down by lengthening supply amid restarts at propane dehydrogenation (PDH) units. However, lower affordability levels from derivatives such as propylene oxide (PO) have also curbed import demand. NE Asia propylene prices cool on weaker demand amid lower affordability levels Oversupply a central issue in northeast Asia for PO makers Tight SE Asia propylene supply likely to continue amid shutdowns In this latest podcast, ICIS senior editor Julia Tan speaks with markets editor Shannen Ng to discuss market conditions and expectations for the near future.

05-Mar-2025

HOUSTON (ICIS)–Navigating the complex maze of US recycling laws is no small feat, especially as state regulations vary significantly. With chemical recycling at the forefront of innovation, understanding how these laws impact the industry's growth is crucial for shaping a sustainable future. INTRODUCTIONThe legislative landscape in the US is highly fragmented, largely due to the wide range of legislative enactments passed across the different states. Three major categories of recycling laws affect chemical recycling: chemical recycling acceptance laws, post-consumer (PCR) content laws and extended producer responsibility (EPR) laws. Each of these legislative frameworks will influence the development of the chemical recycling industry in their unique way, highlighting the complexity of navigating this evolving regulatory environment. Chemical recycling is an umbrella term that encompasses a variety of different processes designed to break down plastic at a molecular level. These processes reverse-engineer plastics, breaking them down into their original building blocks, which can then be reused to create new materials. There are two primary categories of chemical recycling: thermal depolymerization and chemical depolymerization. While both methods target plastics at a molecular level, their approaches differ fundamentally. Thermal depolymerization relies on high heat to break down plastics, whereas chemical depolymerization employs specialized agents to achieve the same outcome. Each category includes specific processes: Thermal Depolymerization (TD): Includes pyrolysis (breaking down plastics into oil and gas through high heat and low oxygen) and gasification (converting plastics into syngas through higher temperatures and oxygen or steam). These processes typically favor polyolefins as feedstock – mainly polyethylene (PE) and polypropylene (PP). Chemical Depolymerization (CD): Includes glycolysis, methanolysis and hydrolysis, which involve chemical reactions with agents like glycol, methanol, or water to depolymerize plastics. These processes typically favor polyethylene terephthalate (PET) as feedstock. CHEMICAL RECYCLING ACCEPTANCE LAWSThe acceptance of chemical recycling in state legislation typically involves defining chemical recycling as a manufacturing process, rather than categorizing it as waste management. This means that chemical recycling plants in the state will not have to adhere to the same strict environmental guidelines as waste management facilities, incentivizing the construction of more facilities. It also potentially opens the door for chemical recyclers to access government resources – eg, grants, tax benefits – allocated for manufacturing in those states. Which states have accepted it?As of late 2024, exactly half of the US states have recognized chemical recycling as a manufacturing process. Source: ICIS This gradual legislative acceptance reflects growing awareness of the potential for chemical recycling to address plastic waste challenges. What are the effects of state-by-state acceptance?The acceptance of chemical recycling on a state-by-state basis, rather than at a federal level, is a double-edged sword. On one hand, when a state legitimizes chemical recycling, it strengthens industry sentiment, while on the other, it further fragments the chemical recycling industry. The incorporation of chemical recycling into legislation began in Florida in 2017, paving the way for other states to follow. The first significant wave of legislative approvals occurred in 2019, leading to a surge in chemical recycling facility start-ups the following year. This pattern repeated with another wave of legislative acceptances in 2021 and 2022, followed by a spike in facility start-ups in 2023. The chart below provides a detailed visualization of this trend. This trend signals that the acceptance of chemical recycling has positive effects on the industry, serving to drive growth and incite innovation. The acceptance of chemical recycling also presents the challenge of varying perspectives across states. Firstly, there is a divide between the states that have accepted chemical recycling as a manufacturing process and those that have not. Secondly, among the states that have accepted chemical recycling, there are a few states that explicitly exclude certain processes. For example, states such as Kentucky and Kansas are among those that exclude processes that turn plastic to fuel. One example of this can be seen in the State of Kentucky’s HB 45, which states, "'Advanced recycling' does not include energy recovery or the conversion of post-use polymers into fuel." Similar language can be found in the State of Kansas’ SB 114, "'Advanced recycling' does not include incineration of plastics or waste-to-energy processes, and products sold as fuel are not recycled products." In effect, wording such as this essentially excludes thermal depolymerization process as being considered a type of recycling while recognizing chemical depolymerization process, creating a further divide even among those states that have chosen to accept chemical recycling. The lack of uniformity in how chemical recycling is addressed adds confusion to the legislative landscape. POST-CONSUMER RECYCLING CONTENT LAWSIn addition to chemical recycling-specific legislation, other laws, such as PCR content mandates, indirectly influence the industry. PCR laws require that a minimum percentage of recycled material be included in certain types of packaging sold within a state. How many states and what are the effects on chemical recycling?Currently, five states – California, Maine, Connecticut, Washington and New Jersey – have enacted PCR laws. However, none of these states are among the 25 mentioned above that have formally accepted chemical recycling into legislation. This fact means that it is often unclear if outputs from chemical recycling are ineligible to count toward PCR requirements, undermining the industry's potential impact and growth. A notable exception exists in Washington, where its PCR law explicitly states: “Both mechanical and chemical recycling methods are acceptable.” This language demonstrates a more inclusive approach, contrasting with states like California and Maine, which remain cautious about embracing chemical recycling. The contrasting viewpoints held by states that have PCR content mandates is another example of lack of uniformity in chemical recycling-related legislation. EXTENDED PRODUCER RESPONSIBILITYEPR is another regulatory framework gaining traction in the US. EPR shifts the responsibility for managing a product's entire lifecycle from consumers to producers, with a particular focus on end-of-life management. Under EPR laws, producers that meet a certain requirement – usually large producers that put considerable amount of plastic onto the market – are obligated to join a producer responsibility organization (PRO) to help finance the collection, recycling, or disposal of their products. How many states and what are the effects on chemical recycling?EPR policies are currently implemented on a state-by-state basis, with Oregon leading the way by releasing a detailed plan. However, the relationship between EPR and chemical recycling remains complex. A key issue lies in how EPR laws define acceptable "end markets" for collected plastics. Oregon’s definition of responsible end markets appears tailored to traditional mechanical recycling, inadvertently excluding many chemical recycling technologies. This exclusion stems from the varied outputs of chemical recycling, which can range from plastics to fuels or chemical precursors, complicating their classification as traditional recycling. Without clearer language recognizing the potential of chemical recycling as an end market, EPR laws add another layer of ambiguity to chemical recycling. CONCLUSIONThe regulatory landscape surrounding chemical recycling remains highly fragmented, with varying degrees of acceptance and restrictions across states. While the recognition of chemical recycling in state legislation correlates with industry growth, inconsistencies in how it is defined and regulated create challenges for accelerated growth. Further complicating the landscape, PCR content mandates and EPR laws introduce additional uncertainties, as their definitions often exclude or fail to clarify the role of chemical recycling. This uncertainty can manifest as a lack of investment, both from chemical recyclers who will be hesitant to commit capital to new plants, and from investors wary of funding projects without clear long-term policy support. As the industry continues to develop, greater legislative uniformity and clearer regulatory frameworks will be necessary to unlock the full potential of chemical recycling as a viable solution to plastic waste management. Insight article by Joshua Dill

03-Mar-2025

HOUSTON (ICIS)–US production of ethane, propane and other natural gas liquids (NGLs) will continue to grow while domestic demand for these chemical feedstocks will likely remain flat, a trend that is contributing to a surge in new terminal projects that will export these products to growing markets overseas. Targa is expanding its terminal at Galena Park, Texas, so it could export a total of 19 million bbl/month of liquefied petroleum gas (LPG). MPLX and ONEOK plan to develop a terminal in Texas City, Texas, that can export 400,000 bbl/day of LPG. Chemical companies have announced no final investment decisions on any crackers or propane dehydrogenation (PDH) units in the US that would consume the nation's growing supplies of NGLs. Crackers can use NGLs to produce ethylene. PDH units use propane to make propylene. US ETHANE, PROPANE PRODUCTION TO CONTINUE RISINGMidstream companies continue to announce new projects, which would increase US production of ethane and LPG. These projects are on top of the ones that are already under construction and that will start up in the upcoming months. Targa alone is starting up four natural gas processing plants in west Texas in 2026, and it has picked out multiple sites for future processing plants in the region's Delaware and Midland basins. The following table shows the ICIS forecast for US NGL supplies in the next couple of years. Figures are in millions of bbl/day, and they include imports as well as production from gas processing plants and refineries. million bbl/day 2024 2025 2026 Ethane 2.821 2.874 3.099 Propane 2.526 2.619 2.684 Butanes 1.235 1.292 1.347 Source: ICIS US supplies of NGLs are rising because of increased production of crude oil and natural gas. The following table shows forecasts for US production of oil and dry natural gas from the short term energy outlook of the Energy Information Administration (EIA). Oil figures are in millions of barrels/day. Gas production is in billion of cubic feet/day. 2023 2024 2025 2026 Crude oil 12.93 13.21 13.59 13.73 Dry natgas 103.57 103.08 104.60 107.29 Source: EIA As shale reservoirs mature and reservoir pressures decline, the ratio of gas to oil increases. This raises gas production and further increases NGL supplies. NO NEW CRACKER OR PDH CAPACITYThe US has had a drought of new cracker announcements, with 2025 being the first year since 2010 that the country will add no new ethylene capacity. Chevron Phillips Chemical and QatarEnergy will break the drought in 2026 when their Golden Polymer joint venture project starts up. But that's it. ExxonMobil Chemical and Shintech have early plans for crackers, but neither have announced final investment decisions (FID). Westlake has expressed openness into possibly expanding the joint venture cracker that it owns with Lotte Chemical in Louisiana. But any decision would have to follow a review of costs. FG LA LLC, a subsidiary of Formosa Plastics Group, has said little about a two-phased proposed project called Sunshine that would produce ethylene and downstream derivatives. Thailand's PTT Global Chemical (PTTGC) has been considering a cracker in Ohio that would supply ethylene for new PE capacity. The project hit a snag in July 2020, when the company's joint venture partner left. Meanwhile, no company has announced plans to consider any propane dehydrogenation (PDH) units in the US, which convert propane into propylene. Rising costs for labor and material have made capacity expansions less attractive. In addition, the world has an oversupply of many plastics and chemicals, which is providing producers with another reason to forego capacity expansions. Because of the dearth in new chemical projects, demand for NGLs will remain steady in the next couple of years, according to the latest short term energy outlook from the EIA, as shown in the following table. Figures are in millions of barrels per day. million bbl/day 2023 2024 2025 2026 Ethane 2.16 2.30 2.27 2.35 Propane 0.78 0.74 0.78 0.76 Butanes 0.30 0.30 0.27 0.27 US NGLS BOUND FOR OVERSEA MARKETSOutside of the US, companies continue to add capacity despite the supply glut. By 2029, capacity in northeastern Asia will be nearly 43% larger than in 2024 according to the ICIS Supply & Demand Database. For Asia and Pacific, capacity will grow by more than 10% over the same period. In India, GAIL (India) and Nayara Energy have each proposed building 1.5 million tonne/year ethane crackers. In Vietnam, Siam Cement Group (SCG) plans to build Vietnam's first integrated petrochemical complex that will use ethane from the US as a feedstock. For propylene, capacity in northeastern Asia will be nearly 28% larger in 2029 versus 2024. For Asia and Pacific, capacity will be grow by nearly 25% over the same period. In addition, demand for LPG continues to grow because consumers are using it to replace wood and other sources biomass-based fuel. Rising supplies of chemical feedstock in the US and rising demand in the rest of the world are creating an opportunity for midstream companies to connect the producers with the customers by expanding export capacity. DETAILS ON TERMINAL PROJECTS MPLX and ONEOK created the Texas City Logistics joint venture to develop their LPG terminal. Operations should start in early 2028. ONEOK and MPLX are each reserving 200,000 bbl/day for their customers. Targa should complete its 650,000 bbl/month expansion project at its LPG terminal in Galena Park, Texas, in Q4 2025. Another expansion project by Targa should start operations in the third quarter of 2027. The company did not disclose the size of this subsequent. However, it will raise the total LPG export capacity at Galena Park to 19 million bbl/month Enterprise Products is proceeding with its previously announced ethane and propane Neches River Terminal. Phase 1 should start in Q3 2025 and Phase 2 should start in the first half of 2026. Enterprise is expanding LPG loading capacity under a previously announced project at its Enterprise Hydrocarbons Terminal (EHT). That project should be completed by the end of 2026. Enterprise is enhancing its ethane terminal at Morgan's Point, which should be completed in the fourth quarter of 2025. Energy Transfer is adding up to 250,000 bbl/day of NGL export capacity at its terminal in Nederland, Texas. Initial phases should start up in mid-2025. In Q4 2025, the terminal should start exporting ethylene. Energy Transfer has started work on building a 900,000 bbl ethane storage tank at its export terminal in Marcus Hook, Pennsylvania. It is also adding about 20,000 bbl/day of incremental ethane chilling capacity. MIDSTREAM PROJECTSThe following table lists some of the major midstream projects. Company Project Type Capacity Units Location Startup Brazos Midstream Sundance I Gas Plant 200 million cubic feet/day Martin County 24-Oct Brazos Midstream Unnamed Gas plant 300 million cubic feet/day Martin County H2 2025 Delek Unnamed Gas Plant 110 million cubic feet/day Delaware H1 2025 Durango Midstream Kings Landing, Phase II Gas Plant 200 million cubic feet/day Eddy County, NM na Durango Midstream Kings Landing, Phase I Gas Plant 200 million cubic feet/day Eddy County, NM Q4 24 Energy Transfer Frac IX Fractionator 165,000 bbl/day Mont Belvieu Q4 26 Energy Transfer Red Lake III Gas Plant 200 million cubic feet/day Permian Basin completed Energy Transfer Expansion of Orla East Gas Plant 50 million cubic feet/day Orla, Texas completed Energy Transfer Expansion of Grey Wolf Gas Plant 50 million cubic feet/day west Texas completed Energy Transfer Mustang Draw Gas Plant 275 million cubic feet/day Midland Basin H1 26 Energy Transfer Badger Gas Plant 200 million cubic feet/day Delaware mid 25 Energy Transfer Expansion of Arrowhead II Gas Plant 50 million cubic feet/day west Texas Q1 25 Energy Transfer Expansion of Arrowhead III Gas Plant 50 million cubic feet/day west Texas Q1 25 Energy Transfer Red Lake IV Gas Plant 200 million cubic feet/day Permian Basin Q3 25 Energy Transfer Marcus Hook Optimization Terminal 900,000 bbl ethane storage/20,000 bbl/day ethane chilling capacity Marcus Hook, Pennsylvania Construction Underway Energy Transfer Expansion of Nederland NGL terminal Terminal Up to 250,000 bbl/day Nederland, Texas mid 25 Enterprise Fractionator 14 Fractionator 195,000 bbl/day Mont Belvieu Q3 25 Enterprise Mentone West 2 Gas Plant 300 million cubic feet/day Delaware H1 26 Enterprise Mentone West Gas Plant 300 million cubic feet/day Delaware Q3 25 Enterprise Orion Gas Plant 300 million cubic feet/day Midland Q3 25 Enterprise Neches River Terminal (NRT), phase 2 Terminal add 60,000 ethane to raise total to 180,000, Propane 360,000 H1 26 Enterprise Neches River Terminal (NRT), phase 1 Terminal 120,000 ethane, 900,000 refrigerated tank Q3 25 Enterprise, Navigator Ethylene Export Expansion Terminal 550,000/ 1,500,000 tonnes/year Q4 24 & Q4 25 Enterprise Enterprise Hydrocarbons Terminal (EHT) LPG expansion Terminal 300,000 bl/day Houston Ship Channel end 2026 Gulf Coast Fractionators JV * GCF Fractionator Fractionator 135,000 bbl/day Mont Belvieu 24-Nov Moss Lake Hackberry NGL Project Fractionator 300,000 bbl/day Calcesieu Ship Channel NA Moss Lake Hackberry NGL Project Terminal 315,000 bbl/day Calcesieu Ship Channel NA MPLX Harmon Creek III De-ethanizer 40,000 bbl/day Marcellus H2 26 MPLX na Fractionator 150,000 bbl/day Galveston Bay Refinery 2028 MPLX na Fractionator 150,000 bbl/day Galveston Bay Refinery 2029 MPLX Harmon Creek III Gas plant 300 million cubic feet/day Marcellus H2 26 MPLX Secretariat Gas Plant 200 million cubic feet/day Delaware Q4 25 ONEOK Medford Fractionator rebuild Fractionator 210,000 bbl/day Medord, Oklahoma Q4 26, Q1 27 Phillips 66 EPIC NGL Fractionator 110,000 bbl/day Robbstown, Texas proposed Targa Train 11 Fractionator Fractionator 150,000 bbl/day Mont Belvieu Q3 26 Targa Train 12 Fractionator Fractionator 150,000 bbl/day Mont Belvieu Q1 27 Targa Bull Moose Gas Plant 275 million cubic feet/day Delaware completed Targa Falcon II Gas Plant 275 million cubic feet/day Delaware Q2 26 Targa Greenwood Gas Plant 275 million cubic feet/day Midland Q4 23 Targa Pembrook II Gas Plant 275 million cubic feet/day Midland Q4 25 Targa Bull Moose II Gas Plant 275 million cubic feet/day Delaware Q1 26 Targa East Pembroke Gas Plant 275 million cubic feet/day Midland Q2 26 Targa East Driver Gas Plant 275 million cubic feet/day Delaware Q3 26 Targa Galena Park LPG terminal expansion Terminal 650,000 bbl/month Galena Park, Texas Q4 25 Targa Galena Park LPG terminal expansion Terminal total capacity raised to 19,000,000 bbl/month Galena Park, Texas Q3 27 Targa LPG Export Expansion Terminal 1,000,000 bbl/month Galena Park, Texas started up Texas City Logistics LPG terminal Terminal 400000 LPG bbl/day Texas City early 2028 * GCF is restarting after being idled in January 2021. The JV is made up of Targa, Phillips 66 and Devon Energy Insight article by Al Greenwood (Thumbnail shows an ethane carrier)

03-Mar-2025

HOUSTON (ICIS)–LyondellBasell has approved plans to build a metathesis unit in Channelview, Texas, that will convert ethylene into propylene, the producer said on Monday. Construction should start in the third quarter of 2025, and operations should begin in late 2028, LyondellBasell said. The metathesis unit will produce 400,000 tonnes/year of propylene, the company said. LyondellBasell plans to use the propylene in its internal polypropylene (PP) and propylene oxide (PO) units. The company started up its new PO/tertiary butyl alcohol (PO/TBA) plant in Channelview in 2023. By producing its own propylene, LyondellBasell limits its exposure to volatile feedstock prices, said Kim Foley, executive vice president, Global Olefins & Polyolefins and Refining. “This capacity expansion strengthens our ability to meet increasing customer demand and improve our self-sufficiency as we grow and upgrade a core business line for LyondellBasell.” Thumbnail shows PP, which is made from propylene. Image by Shutterstock.

03-Mar-2025

LONDON (ICIS)–Delays to granting of permits are negatively impacting pyrolysis-based chemical recycling supply chain growth and investment. Waste shipment approval delays diverting mixed polyolefin volumes from chemical recyclers Delays to pyrolysis oil start-ups raises questions on market scalability – with permits a key cause of delays RDF bale prices hit record low on burn-for-energy permit delays in Eastern Europe Permit delays have repeatedly been cited as one of the major factors behind start-up delays and long commissioning timeframes for new pyrolysis-based chemical recycling units. Another commonly cited factor is access to sufficiently high quality and consistent quality feedstock waste. Under the EU Waste Shipments rules, most forms of mixed waste require prior consent from all authorities in countries involved before the shipment is allowed to take place. This applies to both shipments outside of the EU and between EU countries. For materials on the EU’s ‘green-list’ there is a lesser requirement simply to provide general information on the shipped waste prior to transport. Common plastic-derived feedstock sources for pyrolysis-based chemical recyclers include high plastic content refuse derived fuel (RDF) bales, and mixed polyolefins bales and agglomerates. While mixtures of polyolefins are part of the green-list, in reality, the majority of volumes available on the market do not meet the requirements to avoid prior consent obligations. Permits for European mixed polyolefin waste shipments beyond national borders are now taking up to 12 months to be issued, reducing willingness among waste managers to supply chemical recyclers. At least one waste management major has sent volumes to the burn-for-energy market which had been intended to serve chemical recyclers, as a result of the delays. “The handling time for notification that used to be 3 months to 6 months are now 6 months to a year and we can see the same thing in other countries… we have mono fractions that could be green listed, but for anything that isn't the handling time is killing the recycling practice,” the waste manager said. There was also talk that pyrolysis plant start-up delays leading to inconsistent offtake and stricter technical requirements from pyrolysis oil plant – particularly on moisture content – has led some waste managers in the Nordics to stop actively pursuing sales to chemical recyclers. Pyrolysis oil can be – and often is – run through an upgrader or purifier to enhance its properties, but the initial quality of input waste has an impact both on yield and quality – and therefore profitability. Throughout the pyrolysis chain waste quality is often underdiscussed. Input waste quality impacts: Pyrolysis oil yield Level and type of impurities in finished pyrolysis oil Final boiling point of the pyrolysis oil Production equipment corrosion risk Blend ratios for downstream cracker production Aromatic and biogenic content Any additional sorting necessary at the pyrolysis oil unit adds cost and slows throughput. Many chemical recyclers have found on-site waste pre-treatment and sorting more difficult than anticipated, especially because it requires continuously adapting processes to account for  shifting feedstock mixes. Pre-treating and sorting at waste manager level creates economies of scale and prevents the slowdown in throughput sometimes associated with chemical recyclers sorting on site. While there is a large pool of mixed plastic waste globally, the available pool of sufficient quality mixed plastic waste to achieve cracker suitable pyrolysis oil is more limited,and will require significant infrastructure build for the pyrolysis oil sector to scale. Market players view the biggest barriers to market growth as: Access to high-enough quality waste Regulatory uncertainty The timeframe for the technology to scale A challenging financing and investment environment Permit delays impact both the short-term access to waste and willingness to invest in sorting capacity that will be necessary to serve the pyrolysis-based chemical recycling chain in the future. This in turn has a knock-on effect on scalability timeframes. Coupled with this, one of the additional current challenges for pyrolysis oil investment is the volatility of feedstock waste input costs. This is because investors typically seek feedstock cost projections for a minimum of five to 10 years.  90% mixed polyolefin bale prices, for example have traded as high as €600/tonne ex-works NWE (northwest Europe) and as low as €0/tonne ex-works NWE since July 2022, making long-term forecasts challenging. This is part of what has driven a push to cost-plus contracts in the market. The spike in volatility is also shown in the below statistical volatility chart. Statistical volatility shows the annualized standard deviation of prices on a rolling basis It is a useful indicator of whether the market is becoming more or less volatile and indicates periods of market stress when high. Because each market has a different level of "normal" volatility, it is the change in the graph line that is more key than the actual number. When the graph line rises, volatility is increasing, when it falls, volatility is falling. Last week high plastic content refuse derived fuel (RDF) bale prices reached record lows since ICIS began tracking mixed plastic waste values in November 2021. This was driven by prices in Eastern Europe – particularly Poland. This week, similar values have been seen in the Nordics. Difficulties in obtaining environmental permits for new burn-for-energy units were given as one of the primary causes of the price collapse – meaning permit delays are adding to the already high volatility of mixed plastic waste values. Focus article by Mark Victory ICIS is evaluating data for bio-naphtha and bio-LPG supply, demand and pricing. Please complete this questionnaire for early access. Access Data ICIS is developing a CIRCULAR PLASTICS product that enables you to compare Circular Plastics supply, demand and pricing. Please complete this questionnaire for early access. Access Data ICIS assesses more than 100 grades throughout the recycled plastic value chain globally – from waste bales through to pellets. This includes recycled polyethylene (R-PE), recycled PET (R-PET), R-PP, mixed plastic waste and pyrolysis oil. On 1 October ICIS launched a recycled polyolefins agglomerate price range as part of the Mixed Plastic Waste and Pyrolysis Oil (Europe) pricing service. For more information on ICIS’ recycled plastic products, please contact the ICIS recycling team at recycling@icis.com

26-Feb-2025