Mono propylene glycol (MPG)

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 28 June. US June propylene contracts rise on higher spot prices US June propylene contracts for the majority of market participants settled up 2 cents/lb on higher spot prices. US consumer confidence and ICIS leading business barometer fall in June US consumer confidence fell in June, as did the ICIS US leading business barometer (LBB). Aditya Birla Chemicals plans new US epoxy facility in Texas Aditya Birla Chemicals is planning to build a new epoxy facility in Beaumont, Texas, according to the company. Flat chemical prices to increase in coming quarters; volumes booming – US HB Fuller Most chemical prices have stabilized, and a few are posting small rises, a trend which should strengthen in coming quarters as global manufacturing picks up, executives at US-headquartered adhesives producer HB Fuller said on Thursday. SHIPPING: Panama Canal increases drafts, to add another transit slot on 5 August The Panama Canal Authority (PCA) has increased the maximum allowable draft to transit the Neopanamax locks effective immediately, announced that another increase will take effect on 11 July, and will add an additional booking slot in the Neopanamax locks during Booking Period 2 for booking dates beginning 5 August.

01-Jul-2024

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

01-Jul-2024

HOUSTON (ICIS)–The Panama Canal Authority (PCA) has increased the maximum allowable draft to transit the Neopanamax locks effective immediately, announced that another increase will take effect on 11 July, and will add an additional booking slot in the Neopanamax locks during Booking Period 2 for booking dates beginning 5 August. Source: Panama Canal Authority Water levels at Gatun Lake, the freshwater lake that feeds the canal’s locks have improved recently amid the arrival of the rainy season after a prolonged drought, allowing the PCA to continue to add transit slots. Water levels at Gatun Lake, currently at 81.3 feet, are projected to be at 82.1 feet by mid-July and to 87 feet by December. The transit restrictions that began in July 2023 – the first time in the canal’s history that limitations were placed on the number of daily transits – have gradually eased over the past few months and are approaching the average daily transits of 36-38/day seen prior to impacts from the drought. The improved conditions at the canal are likely to improve transit times for vessels travelling between the US Gulf and Asia, as well as between Europe and west coast Latin America countries. This should benefit chemical markets that move product between regions, including those in the following chart. The bottleneck at the Panama Canal has had varying affects on US chemical markets. Formosa Plastics USA had to shut down its EG2 unit because of negative impacts on monoethylene glycol (MEG) exports because of the backlog and delays transiting the canal. The majority of product from the unit is expected to be exported to Asia. The company restarted the unit this week. Higher water levels at the Panama Canal could also have knock-down effects on US natural gas demand, ICIS feedstocks analyst Barin Wise said. If higher water levels at the canal enable liquefied natural gas (LNG) shippers to cut down on travel times from the US Gulf Coast to Asia, it could encourage LNG export plant managers to maximize output, he said. AUCTION PRICES EASE The PCA said recently that auction prices have levelled off since the peak period last year. In October-November 2023, there was a surge in auction prices related to a market-driven congestion premium, though this is no longer the case, the PCA said. Auction prices are generally near normal levels presently, though auctions remain an invaluable tool and option for customers who may otherwise not have secured reservations. The PCA noted that auction prices are also not set by the waterway, but rather influenced by many factors and market dynamics, including internal considerations such as waiting times and queue lengths, as well as external elements like charter rates and bunker prices. Additionally, the specific preferences and needs of individual customers, which may not be fully captured by the route value model, can also influence auction outcomes. WAIT TIMES FOR NON-BOOKED VESSELS Wait times for non-booked southbound vessels ready for transit have been relatively steady at less than two days, according to the PCA vessel tracker and as shown below. The tracker is only for non-booked vessels in the queue and shippers should consider two additional days as a minimum to estimate transit times for unscheduled vessels, the PCA said. Focus article by Adam Yanelli With additional reporting by Melissa Wheeler, Bryan Campbell and Emily Burleson Thumbnail photo: Shows a container ship transiting the Panama Canal. (Source: Courtesy of PCA)

28-Jun-2024

LONDON (ICIS)–The European oxo-alcohols market and most of its derivatives have been characterized by ample supply in June, particularly following the lifting of OQ Chemicals' force majeure at the end of May. Demand across most markets remains tepid and slow due to ongoing economic challenges. The construction and coatings industries have not experienced the expected seasonal surge. Butyl acetate reporter Marion Boakye speaks to oxo-alcohols reporter Nicole Simpson, glycol ethers reporter Cameron Birch and acrylate esters reporter Mathew Jolin-Beech about market dynamics down the oxo-alcohols value chain.  

24-Jun-2024

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson. China's chemicals producers are said to be focusing on being “nimble and agile” in response to weaker demand growth, ample local supply of intermediate chemicals and increasingly sophisticated end-use markets. This involves producing everything up and down the value chains only when it makes economic sense and increasing the differentiation of grades for a broader range of more sophisticated applications. Local producers are reported to be tripling their range of polyethylene (PE), polypropylene (PP) and polyurethane (PU) grades as they broaden their licensing of technologies. A lot of this differentiation is aimed at supplying chemicals and polymers for higher-value downstream industries such as electric vehicles and batteries. There are said to be plenty of intermediate chemicals available locally that can compete with opportunistic imports. Local producers of intermediates are also reported to be able to make better domestic netbacks than selling overseas. Customers of the local intermediate producers increasingly value reliable suppliers who can provide a wider range of grades, technical services and local currency deals, I’ve been told. The ability of chemicals importers to compete on price alone seems to be under challenge as a sustainable business model. Future winners in China could be the Tier 1 suppliers. These suppliers would make all the grades necessary to serve ever-more sophisticated local end-use markets, which would require constantly successful R&D and good technical services. This points towards China becoming a vast continent-sized market that largely serves itself in speciality chemicals and composites, as well as commodity chemicals. I earlier discussed how self-sufficiency is increasing in commodity chemicals resulting in a pivot by “overseas-based” producers to specialities and composites. China could become just about entirely self-sufficient in commodity grades of PP, polyethylene (PE) and in paraxylene (PX) and ethylene glycols (EG) by 2030. The latter two chemicals are of course pure commodities. Note the above phrase “overseas-based” rather than overseas, as the foreign investors in China are in strong positions to take advantage of this vas and rapidly maturing market. For reasons discussed today, I don’t believe that the pivot by overseas-based producers to specialities and composites will work if it is based on exporting to China. What should the overseas-based producers do? Pretty much forget China as an opportunity as they focus on the rest of the world. And here's the link: https://www.icis.com/asian-chemical-connections/2024/06/chinas-ever-more-sophisticated-chemicals-markets-could-entirely-serve-itself/ Editor’s note: This blog post is an opinion piece. The views expressed are those of the author, and do not necessarily represent those of ICIS.

18-Jun-2024

MUMBAI (ICIS)–State-owned GAIL (India) Ltd plans to invest Indian rupee (Rs) 600 billion ($7.2 billion) to build an ethane cracker and its derivative plants in Madhya Pradesh. The cracker will have a 1.5 million tonne/year capacity and will be set up at Ashta in the Sehore district of the state in central India, GAIL said in a regulatory disclosure to the Bombay Stock Exchange (BSE) on 10 June. GAIL did not provide product or capacity details of the ethylene derivatives it plans to produce at the complex. “Around 800 hectares of land shall be provided by the MP [Madhya Pradesh] Industrial Development Corporation, for which the state government has already initiated the process,” GAIL said. Project construction is expected to begin by February 2025, with commercial production likely in the financial year ending March 2031, it added. Investment on the project is still pending approval from GAIL management board, and the mode of financing yet to be decided. The Madhya Pradesh state government has approved the project and land will be allotted soon, state chief minister Mohan Yadav had said in a statement on 7 June. He said that “petrochemicals like linear low density polyethylene (LLDPE), high density polyethylene (HDPE), mono ethylene glycol (MEG) and propylene will be produced” at the site. The new project is part of GAIL’s initiative to enhance its petrochemical portfolio, a company source said. “The demand for petrochemicals is increasing in the country, led by expanding industrial, construction and manufacturing,” he said, citing an 8-9% annual growth rate in India’s polymer demand. In March 2024, GAIL had signed a tripartite agreement with Oil and Natural Gas Corp (ONGC) and Shell Energy India to explore opportunities for the import of ethane and other hydrocarbons at Shell Energy Terminal in Hazira in the western Gujarat state. Separately, the company recently announced plans to set up liquid pipeline for ethylene (C2), propylene (C3) from Vijaipur to Aurai in the northern Uttar Pradesh state. At Pata in the same state, GAIL will begin operations at the 60,000 tonne/year PP plant by December 2024. At Usar in the western Maharashtra state, GAIL expects to begin operations at its 500,000 tonne/year propane dehydrogenation unit (PDH) and 500,000 tonnes/year polypropylene (PP) line by April 2025; and its 50,000 tonne/year isopropylene project by December 2025. In the southern Karnataka state, the company expects to bring on line its 1.25m tonne/year purified terephthalic acid (PTA) plant in Mangalore by March 2025. GAIL had acquired JBF Petrochemicals in June 2023 which allowed it to add PTA to its existing petrochemical portfolio. ($1 = Rs83.49) Focus article by Priya Jestin

11-Jun-2024

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 7 June 2024. Vietnam’s increase in recycled PE imports boost market mood By Arianne Perez 07-Jun-24 14:37 Producers of recycled polyethylene (rPE) in northeast and southeast Asia have seen a recent uptrend in spot orders from Vietnam amid new requirements from brand owners. Asia MEG demand slows amid limited Mideast cargoes; China supply to grow By Judith Wang 06-Jun-24 13:57 SINGAPORE (ICIS)–A tug of war between snug import availability and slowing demand is likely to continue in Asia’s monoethylene glycol (MEG) market, while an expected increase in China’s domestic supply could shake things up in the near term. INSIGHT: New measures for China property market boon for chemicals By Lina Xu 05-Jun-24 10:00 SINGAPORE (ICIS)–The People's Bank of China (PBoC) released a series of new real estate-related policies on 17 May, including a nationwide removal of minimum interest rate on commercial personal housing loans; reduction in minimum down payment ratio for both first-time and second-time home buyers; and lower interest rate on housing provident fund. NE Asia C2 market sees pressure from long supply, downstream shutdowns By Josh Quah 03-Jun-24 10:49 SINGAPORE (ICIS)–Asia ethylene markets are likely to still face pressure from an overhang of regional supply from May despite some production corrections in June. Asia DEG shrugs off China’s suspended tariff concessions on Taiwan material By Judith Wang 03-Jun-24 15:20 SINGAPORE (ICIS)–Asia’s diethylene glycol (DEG) market is shrugging off China’s decision to suspend tariff concession on its imports of Taiwanese material. China PX buyers prefer domestic over imports on differing yuan exchange rates By Samuel Wong 06-Jun-24 12:36 SINGAPORE (ICIS)–The difference in exchange rates for the Chinese yuan (CNY) set by the People’s Bank of China (PBOC) and the prevailing spot market rate saw downstream purified terephthalic acid (PTA) users in China preferring domestic paraxylene (PX) cargoes over imported cargoes.

10-Jun-2024

HOUSTON (ICIS)–Global rates for shipping containers continue to surge, liquid chemical tanker rates were flat to lower, and the Panama Canal Authority (PCA) is increasing the maximum allowable draft to transit the Neopanamax locks, all highlighting this week’s logistics roundup. CONTAINER RATES Global rates for shipping containers continue to surge, although the rate may be slowing. Global average rates from supply chain advisors Drewry rose by 4% this week, a slower pace from the double-digit increases over the previous two weeks. The following chart shows that average rates are approaching $4,250/FEU (40-foot equivalent unit). Rates from Asia to the US are also at new highs for the year, as shown in the following chart. Rates continue to be pressured higher because of unrest in the Middle East, specifically attacks on commercial vessels by Yemen-backed Houthi rebels. Houthis even claimed responsibility for an attack on the USS Dwight D Eisenhower, an aircraft carrier stationed in the Red Sea. US and UK responded by sending fighter jets to strike Houthi targets in Yemen. Rates are likely to continue rising, according to ocean and freight rate analytics firm Xeneta. “The ocean freight container shipping market has seen rapid and dramatic increases during May and that is set to continue with further growth in spot rates,” Peter Sand, Xeneta chief analyst, said. “On 1 June, spot rates will reach a level we have not seen since 2022 when the COVID-19 pandemic was still wreaking chaos across ocean freight supply chains.” From the Asia-Pacific to US West Coast, market average spot rates are expected to reach $5,170/FEU on 1 June, which would surpass the Red Sea crisis peak of $4,820/FEU seen on 1 February, Xeneta said. This is an increase of 57% during May and the highest spot rates have been on this trade for 640 days. From the Asia-Pacific to US East Coast, spot rates are expected to reach $6,250/FEU on 1 June, only slightly shy of the Red Sea crisis peak of $6,260/FEU and an increase of 50% since 29 April. 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. They also transport liquid chemicals in isotanks. LIQUID TANKER RATES US chemical tanker freight rates assessed by ICIS were mostly unchanged. However, rates increased from Brazil to the US Gulf (USG) and fell slightly from the USG to Asia and from the USG to Brazil. From the USG to Brazil, there continues to be plenty of contractual volumes for both caustic soda and monoethylene glycol (MEG). All the regulars are open and have a lot of tanks to fill. This route has experienced significant downward pressure due to market dynamics and because activity here has been limited. The USG to Brazil trade lane is expected to remain at a standstill which could add further pressure. From the USG to Asia, freight rates declined due to lack of interest. PORT OF BALTIMORE The Unified Command (UC) continues to clear wreckage from the bottom of the Patapsco river, projecting to fully restore the Fort McHenry Federal Channel to its original 700-foot width and 50-foot depth by 8-10 June. The UC cleared a 400-foot-wide swath of the federal channel on 20 May, permitting all pre-collapse, deep-draft commercial vessels to transit the port. Source: Maryland State Police Aviation Command PANAMA CANAL The Panama Canal Authority (PCA) is increasing the maximum allowable draft to transit the Neopanamax locks, effective immediately. The PCA said the arrival of the rainy season in the Canal watershed prompted the action. Wait times for non-booked southbound vessels ready for transit held steady this week for northbound traffic and fell for southbound vessels, according to the PCA vessel tracker and as shown in the following image. Wait times a week ago were 1.5 days for northbound vessels and 3.6 days for southbound vessels. Additional reporting by Kevin Callahan

31-May-2024

SEOUL (ICIS)–The effect of the global energy transition will extend beyond energy sources and become more pronounced after 2030 – impacting the availability of petrochemical feedstocks, a senior industry consultant said on Thursday. "The energy transition is a very wide terminology, which actually goes well beyond energy and materials that will be used in the future," Stefano Zehnder, vice president of consulting at ICIS, told delegates at the Asia Petrochemical Industry Conference (APIC) in Seoul, South Korea. This shift, he explained, will significantly affect the types of materials used in the future and this has important implications for the refining industry. "Oil demand alone does not describe the role of global refining," Zehnder said. Large-scale refining capacity rationalization is expected as refining operations become more exposed to fluctuations in fuel demand, he said. "As refining operation will become more and more exposed to the fuel side, they will be increasingly targeting the petrochemical feedstock area," Zehnder projects. Zehnder also presented a longer-term scenario projecting a substantial reduction in oil demand post-2030, driven by the increasing penetration of sustainable fuels. Despite the evolving energy landscape, "the refining industry remains the dominant provider of feedstock for the petrochemical industry", he said. "We don't think is going to change much into the future." "Post 2030, longer-term scenarios will envisage an important reduction of oil demand, accelerating the trends visible in the medium term," Zehnder added. Although the reduction size in demand will be function of specific assumptions on the key drivers of fuel demand, the impact on “conventional” refiners is likely to be even more pronounced. "This scenario implies a loss of 11 million barrels/day of crude processing. The main factor is [the] assumption related to sustainable fuels, with annual contributions from non-gas liquids (NGLs) gradually flattening." The shift away from fossil fuels to sustainable alternatives will also affect the production of petrochemical feedstocks that are traditionally derived from oil refining. Zehnder highlighted that this transition could lead to a shift in the availability of key feedstocks such as naphtha and propylene. Through to 2049, reducing refinery runs and gasoline yields will affect propylene availability from global refineries, Zehnder explained. "As FCC capacity will decline, higher propylene yields will be required." During the same period, Zehnder noted, "SAF technologies can contribute to renewable naphtha availability, with bio/renewable also potentially contributing to renewable naphtha availability, including bio/renewable diesel to bunkers." Focus article by Nurluqman Suratman

30-May-2024

SINGAPORE/SEOUL (ICIS)–Cracker operations in Japan will remain “challenging” this year amid soft demand while capacity expansion in China continues, according to the Japan Petrochemical Industry Association (JPCA). C2 output falls to record low in 2023 Production of five major plastics shrink by around 5% Capacity optimization among industry main tasks “With new cracker capacities being planned in China almost every year at a pace far exceeding demand, the operation rates of domestic crackers are expected to remain challenging,” said a JPCA report prepared for the Asia Petrochemical Industry Conference (APIC) being held in Seoul. The two-day conference ends on 31 May. In 2023, Japan’s ethylene (C2) production shrank 2.3% to a record low of 5.32 million tonnes, as domestic crackers ran below full capacity, JPCA data showed. “The operation rates of domestic crackers have remained below 90% (this rate is said to be the criterion for judging the economic situation) since August 2022 and the monthly operation rate dropped below 80% four times in 2023,” JPCA said. Japan, which was dislodged by Germany as the world’s third-biggest economy in 2023, is projected to post a 2024 GDP growth of around 1.3%, down from last year’s 1.9% pace. In Q1 2024, the economy shrank at an annualised rate of 2.0% as both consumption and capital spending weakened. For the whole of 2023, the country’s total production of five major plastics – namely, linear density polyethylene (PE), high density PE (HDPE), polypropylene (PP), polystyrene (PS) and polyvinyl chloride (PVC) – declined by an average of 4.7% to 6.02 million tonnes. Japan production of major petrochemicals (in thousand tonnes) Product 2023 2022 % change Ethylene 5,324 5,449 -2.3 LDPE 1,223 1,347 -9.2 HDPE 661 714 -7.4 PP 2,075 2,120 -2.1 PS 564 654 -13.8 PVC 1,496 1,483 0.9 Styrene monomer (SM) 1,428 1,542 -7.4 Ethylene glycol (EG) 264 351 -24.8 Acrylonitrile (ACN) 341 422 -19.2 Sources: JPCA, Japan's Ministry of Economy, Trade and Industry (METI), Japan Styrene Industry Association (PS, SM) and Vinyl Environmental Council (PVC) Domestic demand as ethylene equivalent for the year declined by 11.9% to 3.87 million tonnes, according to JPCA data. “In 2024, there is a risk of a decline in demand due to the deterioration of the global economy, such as price hikes of raw commodities due to supply disruptions caused by several problems,” JPCA said, citing Russia’s prolonged invasion of Ukraine, the Israel-Hamas war, and attacks on commercial ships in the Red Sea. “But a certain amount of demand growth is expected due to the resilience of the US and some developing countries’ economy, and the global economy would have a possibility to make a ‘soft landing’,” JPCA stated. Economists are growing more confident that the US – the world’s biggest economy – will be able to post a 2024 growth rate of 2.4%, easing from the actual GDP growth of 2.5% in 2023. China, although beset by a slumping property sector, should be able to post a 5.0% GDP growth, according to the revised forecast by the International Monetary Fund (IMF). In the report, JPCA also emphasized the petrochemical industry’s tasks to engage in “green” or environmental-friendly transformation toward carbon neutrality by 2050; to enhance and optimize excess production capacity amid a declining population; to push for digital transformation; and contribute to a recycling-oriented society. “In Japan, demonstration experiments using new process technologies and raw materials that contribute to green activities have begun, such as biomass-based fuel, bio-material-based olefins, ammonia synthesis, and hydrocarbon synthesis,” it said. Focus article by Pearl Bantillo

30-May-2024