Mono propylene glycol (MPG)

HOUSTON (ICIS)–Global average container rates ticked lower last week, along with rates from Shanghai to the US West Coast, but rates from Asia-New York held steady during what is typically the slow season for transpacific ocean freight. Shipping analysts said rates remain elevated for several reasons, most significantly the frontloading of imports ahead of possible renewed labor strife at US Gulf and East Coast ports. The possible implementation of new tariffs proposed by the incoming Trump administration is also keeping upward pressure on rates. Global average rates fell by 2% for the week ended 29 November, as shown in the following chart from supply chain advisors Drewry. The following chart from Drewry shows the rates from Asia to both US coasts. Drewry expects spot rates to be relatively stable this week. Judah Levine, head of research at online freight shipping marketplace and platform provider Freightos, said inland truck and rail rates could also face upward pressure as tariffs aimed specifically at Canada and Mexico could lead to increased cross-border volumes. Levine said congestion remains minimal at US ports, including the main West Coast port of Los Angeles/Long Beach. Kip Louttit, executive director of the Marine Exchange of Southern California (MESC), said container ship traffic through the port continues to be steady with 67 container ships enroute and 12 scheduled to arrive in the next three days. 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 RATES STEADY Overall, US chemical tanker freight rates were largely stable this week for several trade lanes, with the exception being the USG-to-Brazil trade lane, as that market picked up this week following activity during the APLA conference in Colombia. Part space has limited availability as most owners are awaiting contract of affreightment (COA) nominations. The USG-Asia trade lane remains steady as spot tonnage remains readily available and multiple cargoes of glycol and styrene are interested in December and January loadings, supporting the market. Similarly, on the transatlantic front, the eastbound leg remains steady as there was limited space available which readily absorbed the few fresh enquiries for small specialty parcels stemming from the USG bound for Antwerp. Various glycol, ethanol, methyl tertiary butyl ether (MTBE) and methanol parcels were seen quoted to ARA and the Mediterranean as methanol prices in the region remain higher. Additionally, ethanol, glycols and caustic soda were seen in the market to various regions. However, it is also clear that space is becoming very tight until the end of the year, keeping rates firm. The CPP market firmed, limiting the number of tankers offering into the chemical market, thus keeping rates stable. Additional reporting by Kevin Callahan

02-Dec-2024

MUSCAT (ICIS)–Gulf Cooperation Council (GCC) petrochemical players must formulate strategic international partnerships and invest in optimization and innovation to remain competitive, according to the secretary general of the Gulf Petrochemicals and Chemicals Association (GPCA). “In the short term, the [GCC petrochemicals] industry needs to urgently adapt to shifting market dynamics and explore new opportunities within products and markets,” Abdulwahab Al Sadoun told ICIS ahead of the 18th Annual GPCA Forum in Muscat, Oman on 2-5 December. "Formulating the right strategic partnerships, particularly with regards to the region’s top export market – China – will also be important in securing growth," he said. The GCC comprises six Middle Eastern countries: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE. The forum took place outside the UAE for the first time in 2022, when it was held in Riyadh, Saudi Arabia; in Doha, Qatar the following year; and in Muscat, Oman this year. The GCC petrochemical industry’s performance is closely interlinked with the health of the global economy, including changes in consumer demand patterns, regulatory and policy updates and demand fluctuations in end markets, Al-Sadoun said. “Aligning itself with key global objectives and ensuring their products and services provide meaningful solutions to the challenges we face will be vital in securing the industry’s future.” Al-Sadoun said that the forum’s theme of “Industry’s Next Chapter: Driving Sustainable Advancement for Global Progress” was timely as the GCC petrochemicals industry now stands at a crossroads in the chemical industry’s evolution. The world today is faced with "insurmountable challenges", Al-Sadoun said. Geopolitical turmoil, climate change, food insecurity, supply chain disruptions, and waste management are some of the megatrends impacting the chemical industry, society and planet, according to Al-Sadoun. “As the external environment around us continues to be in a state of change, so does the chemical industry need to evolve apace…The chemical and petrochemical sector plays an instrumental role as a solutions provider to some of these key challenges,” he said. “At the heart of our chemistry solutions lies the vision to contribute to global sustainable advancement – simultaneously enhancing our contributions to socio-economic prosperity, while at the same time preserving our planet and developing solutions that contribute to the energy transition and the circular economy.” DUAL CHALLENGE As the global population is projected to reach 9.7 billion by 2050, the industry will be faced with the dual challenge of meeting growing chemicals demand driven by an expanding, urbanized population, while at the same time meeting its obligations to decarbonize and preserve the environment, Al-Sadoun said. “As global discussions intensify around renewable energy sources and low-carbon technologies, major GCC players have announced net-zero emissions goals and are investing in green technologies, such as hydrogen production and renewable energy integration.” Advancing the circular economy is also an important factor in driving the sustainable transition, he said. Notable innovations across the GCC industry include Kuwait producer EQUATE’s Viridis 25, the region's first food-grade polyethylene terephthalate (PET) incorporating 25% chemically recycled material, reducing reliance on virgin PET, Al-Sadoun noted. Similarly, UAE polymers major Borouge has advanced recyclability through mono-material laminates and flexible packaging solutions, while Saudi Arabia chemicals giant SABIC continues to lead with its certified circular polymers made from 100% recycled plastic. Government-driven initiatives, such as Saudi Arabia’s Vision 2030 and the UAE’s Net Zero by 2050 Strategy, will also provide a supportive policy framework for industry-wide sustainability transitions, he noted. “However, industry players are under no illusion that the road to sustainability is long and ridden with challenges,” Al-Sadoun said. “It requires true collaboration, Public Private Partnerships (PPP) and the entire value chain to pull their weight to chart a viable pathway to sustainability,” he said. “The journey to achieving big goals is often a series of small, consistent steps…And this is what the industry needs to focus on – taking impactful, consistent actions every day." Interview article and infographic by Nurluqman Suratman Thumbnail image: GPCA secretary-general Abdulwahab Al-Sadoun (Source: GPCA)

02-Dec-2024

HOUSTON (ICIS)–The tariffs proposed by President-Elect Donald Trump on imports from Mexico, Canada and China would raise costs for the heavier grades of oil needed by US refineries as well as rare-earth elements used to make catalysts for downstream refining units. Trump said he intends to issue an executive order that would impose tariffs of 25% on imports from Mexico and Canada on January 20, his first day of office. He also announced intentions to impose a tariff of 10% on imports from China. This would be on top of the existing duties that the US already imposes on Chinese imports. Trump could decide to modify or even withdraw the proposals – especially if the US can reach a deal that addresses illegal immigration and drugs, the impetus behind the proposed tariffs. However, the tariffs as they are proposed by Trump would raise costs for key inputs used by US refiners. Outside of fuels, it could rise costs for fluoromaterials, since Mexico is the source of most of the imported feedstock. US REFINERIES DESIGNED FOR IMPORTS OF HEAVIER CRUDESUS refineries are generally designed to process grades of crude that are heavier than the oil it produces domestically from shale, said Michael Connolly, principal refining analyst for ICIS. As a result, the US exports its surplus of light oil and imports the heavier grades needed by its refineries. Those imports help fill out refining units that process heavier crude fractions, such as hydrocrackers, cokers, base oil units and fluid catalytic cracking (FCC) units, Connolly said. In 2023, the majority of those imports came from Canada and Mexico, as shown in the following table showing the top five sources of foreign crude. Figures are listed in thousands of barrels/day. COUNTRY IMPORTS % Canada 3,885 59.9 Mexico 733 11.3 Saudi Arabia 349 5.4 Iraq 213 3.3 Colombia 202 3.1 Total US imports 6,489 100 Source: Energy Information Administration (EIA) "If this tariff was to apply to crude, it would be damaging to the US refining industry and thus the US economy," Connolly said. The damage would stem from the nation's position as the world's largest exporter of refined products. In 2023, the US was the world's largest exporter of gasoline, with shipments of 900,000 bbl/day, according to the EIA. More than 500,000 bbl/day of those exports went to Mexico. The US is also a major exporter of distillate fuel oil, with shipments reaching 1.12 million bbl/day in 2023, according to the EIA. For petrochemicals, FCC units are important sources of propylene, so tariffs could have an effect on margins for propylene derivatives. FCC operations could receive another blow from the additional tariffs that the US could impose on imports of rare-earth materials from China. RARE EARTHS AND FCC CATALYSTSFCC catalysts are made with lanthanum and cerium. For most categories, China was the main source of these rare earths in 2023, as shown in the following table. Figures are in kilograms. HTS Code Product Imports from China Total imports  % 2846.10.0050 Cerium compounds other than cerium oxides 1,121,069 1,958,581 57.2 2846.90.2005 Rare-earth oxides except cerium oxides containing lanthanum as the predominant metal 52,045 479,885 10.8 2805.30.0005 Lanthanum, not intermixed or interalloyed 144,182 144,242 100.0 2846.90.8070 Mixtures of rare-earth carbonates containing lanthanum as the predominant metal 102,423 119,626 85.6 2805.30.0010 Cerium, not intermixed or interalloyed 3,262 3,466 94.1 Source: US International Trade Commission (ITC) Lanthanum and cerium are byproducts of the production of neodymium and dysprosium, two rare earth materials that are used to make magnets. TARIFFS ON MEXICAN HYDROFLUORIC ACIDIf the tariffs go through, they could raise costs for US producers of fluoromaterials. Hydrofluoric acid is the feedstock for almost all fluorochemicals and fluoropolymers, and Mexico accounted for all of the 87 million kg of acid that the US imported in 2023, according to the ITC. Fluorochemicals are used to make refrigerants as well as blowing agents used to make polyurethane foams. Another fluorochemical, lithium hexafluorophosphate (LiPF6), is used as an electrolyte in lithium-ion batteries. For fluoropolymers, demand is growing because of their use in semiconductor fabrication plants (fabs), 5G telecommunication equipment and membranes used in fuel cells and green-hydrogen electrolysers. Hydrofluoric acid is also used as a catalyst in many alkylation units at refineries. Insight article by Al Greenwood Thumbnail shows a pump used to dispense fuel produced from refineries. Image by Shutterstock.

27-Nov-2024

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 22 November. Eastern EU nations call for duties on imports of fertilizers from Russia and Belarus Countries such as Poland, Lithuania, Latvia and Estonia have submitted a letter to the European Commission calling for customs duty to be imposed on imports of fertilizers from Russia and Belarus, the Polish Ministry of Development and Technology has confirmed. Europe apathetic to PO asset reviews as oversupply plagues market Two propylene oxide (PO) plants have been added to the pile of European assets under review as the market grapples with chronic oversupply, low utilisation and persistent low demand. Chems firms struggle to gain traction in Q3 The chemicals sectors’ third-quarter earnings period has underlined how little momentum has built up in the last 12 months, and how tepid expectations are for the closing months of the year. Tightening Russia oil supply may support oil benchmarks as Russia-Ukraine conflict marks 1,000th day Global oil benchmarks could find support from tighter Russian oil supply in coming weeks amid calls for stricter EU sanctions and escalating geopolitical tensions. Europe, US chemicals have most to lose from a new trade war Donald Trump’s resounding victory in the US presidential election gives him a powerful mandate for a policy agenda which includes ramping up trade tariffs across the board as he pursues his re-shoring agenda.

25-Nov-2024

HOUSTON (ICIS)–Rates for shipping containers from Asia to the US East Coast were largely flat and rates to the West Coast fell by 5%, and the Panama Canal will begin allowing swapping of slots on 1 January, highlighting shipping news this week. 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), which are shipped in pellets. They also transport liquid chemicals in isotanks. Global average rates ticked lower by 1% this week, according to supply chain advisors Drewry and as shown in the following chart. Rates from Asia to New York were largely stable on the week while rates from Shanghai to Los Angeles fell by 5%, as shown in the following chart. Drewry expects spot rates to remain stable over the coming week. Drewry’s assessment has rates to the East Coast about $700/40-foot equivalent units (FEU) higher than to the West Coast. Online freight shipping marketplace and platform provider Freightos has rates to both coasts nearly at parity slightly higher than Drewry’s East Coast rate. Judah Levine, head of research at Freightos, said transpacific ocean rates are about 35%-45% below peak levels seen in July now that the peak season has ended. He said upward pressure remains from stronger than normal demand as some shippers are frontloading volumes ahead of expected tariff increases from the new administration as well as the possibility of another work stoppage at US East Coast ports as the 15 January deadline to finalize a new collective bargaining agreement nears. Levine noted that Lunar New Year starts at the end of January this year, which is earlier than usual. The unusual parity of transpacific rates to both coasts may point to some shift of demand to the West Coast due to January strike concerns, Levine said. LIQUID TANKER RATES – USG-BRAZIL TICKS HIGHER Overall, US chemical tanker freight rates was largely stable this week for several trade lanes, with the exception being the USG-to-Brazil trade lane as that market picked up this week following activity during the APLA conference in Columbia. Part space has limited availability as most owners are awaiting COA nominations. USG-Asia trade lane remains steady as spot tonnage remains readily available and multiple cargoes of glycol and styrene are interested in December and January loadings, supporting the market. Similarly, on the transatlantic front, the eastbound leg remains steady as there was limited space available which readily absorbed the few fresh inquiries for small specialty parcels stemming from the USG bound for Antwerp. Various glycol, ethanol, methyl tertiary butyl ether (MTBE) and methanol parcels were seen quoted to ARA and the Mediterranean as methanol prices in the region remain higher. Additionally, ethanol, glycols and caustic soda were seen in the market to various regions. However, it is also clear that space is becoming very tight until the end of the year, keeping rates firm. The CPP market firmed, limiting the number of tankers offering into the chemical market, thus keeping rates stable. Bunker prices rose, mainly due to the increase in energy prices following continued geopolitical concerns. PANAMA CANAL TO ALLOW SWAPPING OF SLOTS The Panama Canal will begin allowing swapping and substitutions of booking slots between container vessels with some conditions beginning 1 January, the Panama Canal Authority (PCA) said. The conditions are that both vessels must be the same type and must belong to the containership segment, both vessels must belong to the same vessel classification (Neopanamax, Super or Regular), and both vessels must be transiting in the same direction. Also, for swaps, vessels must have similar transit restrictions, and for substitutions, the new vessel must have similar or lesser transit restrictions, both vessel operators must belong to services under the same cooperative working agreement (Global Alliances or VSA), and the booking date of the vessels involved in the swap or substitution must be within the effective date of the services and of the Alliance or VSA. All other Long Term Slot Allocation method (LoTSA) and ordinary booking slots rules remain in effect. Additional reporting by Kevin Callahan

22-Nov-2024

SINGAPORE (ICIS)–South Korean refiner S-Oil's new petrochemical complex in Ulsan is now 42% complete as of end-October and is on track for completion in 2026. Shaheen accounts for about 87% of full-year 2024 capex Project progress slightly ahead of schedule S-Oil swung to Q3 net loss on poor refining, petrochemical margins Construction of the $7bn project called Shaheen – Arabic word for falcon – at the Onsan Industrial Complex of Ulsan City started in March 2023. Its mechanical completion is targeted by the first half of 2026. Total capital expenditure (capex) for the Shaheen project is projected at W2,716 billion ($1.95 billion) in 2024, up 85% year on year, and accounts for about 87% of S-Oil's overall capex this year. The company’s full-year capex at W3,136 billion, which includes costs of upgrade and maintenance works as well as marketing-related expenses, represents a 54% increase from 2023 levels. The Shaheen project will have a 1.8m tonne/year mixed-feed cracking facility; an 880,000 tonne/year linear low density polyethylene (LLDPE) unit; and a 440,000 tonne/year high density polyethylene (HDPE) plant. The site will have a thermal crude-to-chemical (TC2C) facility, which will convert crude directly into petrochemical feedstocks such as liquefied petroleum gas (LPG) and naphtha, and the cracker is expected to recycle waste heat for power generation in the refinery. Saudi Aramco, the world’s biggest crude exporter, owns more than 63% of S-Oil. The project update was included in S-Oil’s presentation slides on its Q3 financial results released on 4 November. The company swung to a Q3 net loss of W206 billion amid a sharp decline in refining and petrochemical earnings. in South Korean won (W) billion Q3 2024 Q3 2023 % Change Jan-Sept 2024 Jan-Sept 2023 % Change Revenue 8,841 9,000 -1.8 27,720 25,897 7.0 Operating income -415 859 200 1,411 -85.8 Net income -206 545 -61 788 The petrochemicals unit of S-OIL posted an operating income of W5.0 billion in the third quarter, an 89% year-on-year drop. Paraxylene (PX) and benzene markets weakened in Q3 due to increased supply amid reduced gasoline blending demand and restarts of production facilities after turnarounds. The company's PX spread to naphtha weakened to $271/tonne in Q3 from $425/tonne in the same period last year, while the benzene-naphtha spread rose to $315/tonne from $251/tonne in the same period a year earlier. In the downstream olefin market, polypropylene (PP) was bearish in the third quarter due to "abundant regional supply amid weak downstream demand". The refining unit posted an operating loss of W573.7 billion in the third quarter, swinging from the W666.2 billion profit in the same period a year earlier. The loss in the refining segment was mostly due to the one-off impact from the decline in oil prices and foreign exchange rates. On market conditions, the company said that the supply-demand environment and margins for refiners in Asia is expected to "gradually improve due to reduced operating rate from low margin condition and heavier maintenances year over year, amid continued stockpiling if winter heating oil". For Q4, the company expected the PX and benzene markets to be supported by fresh demand from new downstream capacities while gasoline demand stays slow. For downstream olefin markets, S-Oil said that PP and propylene oxide (PO) markets may show modest recovery "depending on the impact of China's economic stimulus measures amid ongoing capacity additions". Focus article by Nurluqman Suratman ($1 = W1,395)

18-Nov-2024

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 15 November. INSIGHT: India’s ADD findings on PVC have potential to reshape regional flows in wider Asia By Jonathan Chou 11-Nov-24 11:00 SINGAPORE (ICIS)–Asia's polyvinyl chloride (PVC) market players are assessing the potential ramifications following preliminary findings on India's PVC imports released by the country's Directorate General of Trade Remedies (DGTR). Asia petrochemical shares tumble as China stimulus disappoints By Jonathan Yee 11-Nov-24 15:04 SINGAPORE (ICIS)–Shares of petrochemical companies in Asia tumbled on Monday as China’s much-awaited stimulus measures failed to impress markets, while the US is likely to put up more trade barriers against the Asian giant following the re-election of Donald Trump as president. Asia toluene markets slump on waning regional demand By Melanie Wee 12-Nov-24 11:47 SINGAPORE (ICIS)–Asia’s toluene spot markets are being weighed down by a combination of burgeoning supply and lacklustre demand, at a time when arbitrage economics to divert material to the US were unviable. Asia petrochemical shares fall on strong US dollar, uncertain trade policies By Nurluqman Suratman 13-Nov-24 14:07 SINGAPORE (ICIS)–Shares of petrochemical companies in Asia extended losses on Wednesday, tracking weakness in regional bourses, amid a strong US dollar and uncertainty over trade policies of US President-elect Donald Trump which could fuel inflation. Shell Singapore site divestment deal to be completed in Q1 2025 By Nurluqman Suratman 14-Nov-24 11:41 SINGAPORE (ICIS)–Shell expects the deal to sell its energy and chemicals park in Singapore to Chandra Asri and Glencore will be completed by the first quarter of 2025, a company spokesperson said on Thursday. INSIGHT: China may accelerate PP exports amid intensified supply and demand imbalance By Lucy Shuai 14-Nov-24 13:00 SINGAPORE (ICIS)–China may accelerate PP exports in 2025 amid an intensified imbalance between supply and demand as a large number of new plants are expected to start up. PODCAST: SE Asia propylene to face additional supply, freight challenges in 2025 By Damini Dabholkar 15-Nov-24 11:28 SINGAPORE (ICIS)–Southeast Asia's propylene market faces significant challenges in 2025, with additional supply expected and freight rates continuing to impact downstream demand. Crimped supplies ease pressure on Asia VAM prices By Hwee Hwee Tan 15-Nov-24 14:36 SINGAPORE (ICIS)–Sporadic plant disruptions and crimped supplies in China are fuelling expectations of price competition easing across vinyl acetate monomer (VAM) import markets in Asia.

18-Nov-2024

HOUSTON (ICIS)–Rates for shipping containers from east Asia and China to the US were largely stable this week but exporters are being urged to book outgoing shipments 4-6 weeks in advance as labor issues between union dock workers and US Gulf and East Coast ports stalled. For US companies working to export excess volumes to balance year-end inventories, those shipments need to be going out this week. For importers, rates from Asia to the US West Coast fell by 2% and are down by almost 3% over the past two weeks, according to supply chain advisors Drewry and as shown in the following chart. The chart also shows rates from Asia to New York were largely stable, down by 0.20% and by 0.36% over the past two weeks. Global average rates held steady at around $3,440/FEU (40-foot equivalent unit), as shown in the following chart. With the breakdown in negotiations between the US Maritime Alliance (USMX), representing the ports, and the International Longshoremen’s Association (ILA), representing the dock workers, and with the expectation of significant tariff increases under the administration of President-elect Donald Trump, analysts expect a surge of imports over the last few weeks of the year. The National Retail Federation (NRF) has revised its forecast for the rest of the year on the developments. Ports have not yet reported October’s numbers, but the NRF/Hackett Associates Global Port Tracker projected the month at 2.13 million TEU (20-foot equivalent units), up 3.7% year on year. November is forecast at 2.15 million TEU, up 13.6% year on year, and December at 1.99 million TEU, up 6.1%. That would bring 2024 to 25.3 million TEU, up 13.6% from 2023. Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), are shipped in pellets. They also transport liquid chemicals in isotanks. CANADA PORT LABOR ISSUES The Port of Montreal will resume operations on Saturday, 16 November, at 07:00 local time, following labor disruptions that started on 31 October and a subsequent lockout of about 1,200 dock workers. The Port of Vancouver and other Canadian west coast ports resumed operations on Thursday after a strike and lockout of about 730 foremen who supervise more than 7,000 dock workers that began on 4 November. The Port of Vancouver is Canada’s largest port by far. More than Canadian dollar (C$) 22 million ($15.7 million) of chemistry and plastic products was traded through Vancouver and other west coast ports each day in 2023, for a total of C$8 billion for the year, according to the Chemistry Industry Association of Canada (CIAC). LIQUID CHEM TANKER RATES STABLE US chemical tanker spot rates were overall steady this week for most trade lanes, while vessel demand continues to remain soft for various routes. One exception is rates from the USG to the Mediterranean, which surged as interest to this region remains steady. There was an uptick on cargoes from various regions to Montreal as shippers work to deliver and pick up material before the ice season closes for winter transit and soon will require ice class vessels. The US Gulf to ARA remains soft and solid for contractual cargoes and as CPP tonnage continues to participate in the chemical sector. If it persists it could continue to pressure to the market even further. Similarly, that situation exists for volumes on the USG to the Caribbean and South America trade lanes. From the USG to these regions, space among regular carriers remains available, due to a lack of interest. However, for the USG to Asia spot volumes continue to be weak as there seems to be plenty of prompt space available. Mainly parcels of monoethylene glycols (MEG), ethanol and methanol to this region seems to have provided any support to the weak market. Additionally, ethanol, glycols and caustic soda were seen in the market in various directions. Bunker prices remain stable mainly due to the continued the volatility in energy prices week on week. PANAMA CANAL MAINTENANCE The West Lane of Miraflores Locks will be out of service due to concrete maintenance on the West Southend approach wall for about 48 hours from early on 23 November until late on 24 November, according to the Panama Canal Authority (PCA). The number of slots available to super and regular vessels will be reduced because of the maintenance. Once the maintenance is complete, the 20 slots for supers and the six slots for regular vessels will be reinstated for booking dates beginning 25 November, the PCA said. As of September, the PCA has 36 slots per day after limiting transits late in 2023 because of a severe drought in the region. With additional reporting by Kevin Callahan and Stefan Baumgarten

15-Nov-2024

SINGAPORE (ICIS)–Southeast Asia's propylene market faces significant challenges in 2025, with additional supply expected and freight rates continuing to impact downstream demand. In this latest podcast, ICIS senior editor Julia Tan speaks with senior analyst Shariene Goh to share the latest developments and expectations for what lies ahead next year. High freight rates likely to remain key challenge to PP exports, which could weigh on propylene demand Southeast Asia to take price direction from northeast Asia Net deficit for Indonesia despite Indonesia's LINE project

15-Nov-2024

SINGAPORE (ICIS)–Shell expects the deal to sell its energy and chemicals park in Singapore to Chandra Asri and Glencore will be completed by the first quarter of 2025, a company spokesperson said on Thursday. Shell assets will be key to Chandra Asri’s growth strategy Chandra Asri plans for second petrochemical complex still unclear Closing of deal originally scheduled for end-2024 The energy major on 8 May announced the sale, which includes the physical assets and commercial contracts in Singapore, to CAPGC – a joint venture majority-owned by Chandra Asri with Glencore holding a minority stake – for an undisclosed fee. The transaction was initially scheduled to be completed by the end of 2024. “The divestment is subject to regulatory clearance and other customary closing conditions,” the spokesperson said. “Subject to regulatory approval, the transaction is expected to complete by the first quarter of next year.” Shell and CAPGC have also signed crude supply and product offtake agreements that will come into effect following completion. A new entity under CAPGC called Aster Chemicals and Energy will operate the facilities and handle its crude oil purchases and fuel sales, newswire agency Reuters said in a 13 November report, citing unnamed sources. The Shell Energy and Chemicals Park (SECP) in Singapore comprises its integrated refining and chemicals assets on Pulau Bukom and Jurong Island. The Pulau Bukom assets include a 237,000 barrel/day refinery and a 1.1 million tonne/year ethylene cracker. It was Singapore’s first refinery in 1961. SECP KEY TO CHANDRA ASRI'S GROWTH PLANSChandra Asri in a 4 October statement said that its move to acquire the SECP assets aligns with its growth strategy of “going global” as it seeks to expand in the energy, chemical and infrastructure sector not only in Indonesia but also abroad. “Through SECP, which is one of the largest oil refineries and trading hubs in the world, Chandra Asri Group will source petroleum products, including gasoline, jet fuel, gas oil, and bitumen to support various industries in Indonesia,” the company said. “Additionally, Chandra Asri Group will help fill gaps in the supply of chemical products, such as monoethylene glycol (MEG), polyols, and ethylene, propylene, and styrene monomers, to support manufacturing processes in the country,” it said. “This will ensure that the country’s energy supply is secured as well as reducing dependencies on foreign entities.” In a presentation to investors in early August, Chandra Asri said that it will establish offtake agreements for both fuel and chemical products, utilizing Glencore's extensive trading network to “secure beneficial arrangements”. Chandra Asri currently operates Indonesia's sole naphtha cracker in Cilegon, which can produce 900,000 tonnes/year of ethylene and 490,000 tonnes/year of propylene. The new assets in Singapore will boost Chandra Asri’s overall production capacity from around 4.2 million tonnes/year currently to more than 18 million tonnes/year by 2026. The company is also the sole domestic producer of styrene monomer, ethylene, butadiene (BD), MTBE, and butene-1, with a new world-scale chlor-alkali ethylene dichloride (EDC) plant development on the horizon. The company’s planned second petrochemical complex, dubbed CAP2, in Cilegon includes a chlor-alkali plant that is expected to produce 420,000 tonnes/year of caustic soda and 500,000 tonnes/year of EDC. The chlor-alkali plant is expected to be completed by the end of 2026 but Chandra Asri has not yet provided a firm timeline of the other proposed plants previously announced for CAP2. Focus article by Nurluqman Suratman Thumbnail image: Chandra Asri’s olefins plant in Cilegon, Banten province (Source: Chandra Asri official website)

14-Nov-2024