Oleochemicals

SINGAPORE (ICIS)–Asia's oxo-alcohols market continues to face challenges amid capacity expansions in China. Weak demand from downstream plasticizers sector Upstream support from propylene unlikely Demand recovery to take some time In this latest podcast, ICIS senior editor Julia Tan speaks with ICIS analyst Lina Xu on the latest developments and expectations for what lies ahead in 2025.

17-Dec-2024

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 13 December. S Korea bourse extends fall as political woes deepen; petrochemical shares slump By Pearl Bantillo 09-Dec-24 15:36 SINGAPORE (ICIS)–South Korea’s benchmark stock market index continued to bleed on Monday amid political instability wrought by the shock martial law announcement on 3 December, with impeachment motions against President Yoon Suk Yeol dropped over the weekend due to lack of quorum. INSIGHT: India poised to take up growing role in Asia ethylene ecosystem By Josh Quah 09-Dec-24 18:22 SINGAPORE (ICIS)–As far as the numbers on paper go, India may not look like a conspicuous power in the ethylene markets. The south Asian country imported around 76,400 tonnes of ethylene in 2022, a figure that dropped to around 51,800 tonnes in 2023. China Nov export growth slows to 6.7% on year; imports fall 3.9% By Jonathan Yee 10-Dec-24 15:37 SINGAPORE (ICIS)–China's exports in November grew at a slower year-on-year rate of 6.7% to $312.3 billion amid trading headwinds from a potential wave of tariffs to be levied by the incoming US administration. INSIGHT: Key takeaways for 2025 petrochemical market outlook at ICIS China customer day By Jenny Yi 10-Dec-24 19:15 SINGAPORE (ICIS)–A slow projected global recovery, the growing prominence of Africa and southern America for producers, and a bearish outlook for Asia olefins and aromatics prices in 2025 were among the topics discussed at the ICIS China Customer Day event in Shanghai on 21 November. Asian SBR import offers see support from firming upstream markets By Ai Teng Lim 11-Dec-24 13:18 SINGAPORE (ICIS)–Asian styrene-butadiene-rubber (SBR) producers are seeking to sell higher, citing upstream cost push. China to adopt looser monetary policy in 2025 as US tariffs loom By Jonathan Yee 11-Dec-24 15:36 SINGAPORE (ICIS)–China is expected to implement a “more proactive fiscal policy” and a “moderately loose” monetary policy for next year, according to the country’s top officials, amid economic headwinds and looming heavy tariffs from the US. UAE to impose 15% minimum top-up tax on large multinationals from Jan ‘25 By Jonathan Yee 12-Dec-24 12:28 SINGAPORE (ICIS)–The UAE will impose a minimum top-up tax (DMTT) on large multinational companies, to align its tax system to global standards. Strong PKO cost supports Asia fatty alcohol mid-cuts C12-14 By Helen Yan 12-Dec-24 13:50 SINGAPORE (ICIS)–Elevated feedstock palm kernel oil (PKO) prices and demand heading into 2025 are supporting Asia’s fatty alcohol mid-cuts C12-14 market. INSIGHT: Shift in rules on China phosphate ferts exports hit market sentiment By Rita Wang 12-Dec-24 19:50 SINGAPORE (ICIS)–A shift in the customs rules in China means that phosphate fertilizers will only be sold on the domestic market for the time being. However, sluggish demand as players work through winter reserves could stand to weigh on pricing. China domestic BD gains boost Asian market discussions By Ai Teng Lim 13-Dec-24 11:54 SINGAPORE (ICIS)–Sentiment is more upbeat this week in Asia’s spot butadiene (BD) import market amid recent strong gains in China’s domestic market.

16-Dec-2024

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson: It is that time of the year again when analysts need to put their reputations on the line and make forecasts for the following year. So, see below five forecasts for 2025 with detailed descriptions as follows: There will be enough new capacity coming onstream next year to push China closer to self-sufficiency in some chemicals and polymers such as polypropylene (PP). The boat has already sailed on products such as purified terephthalic acid (PTA) and styrene where China has, in recent years, swung into net export positions. What will further bolster China’s self-sufficiency will be China’s long-term decline in demand growth. China’s operating rates will be higher than sometimes assumed, as it will prioritize self-sufficiency, and potentially more exports (see point 3) over individual plant economics. We are seeing a long-term shift in global growth momentum to the much more populous and much more youthful mega region of the Developing World ex-China. Part of this process involves relocation of manufacturing capacity from China to countries such as Turkey, Mexico, Vietnam and India for cost and geopolitical reasons, and this will continue in 2025. Deals will be done by the Trump administration on tariffs as competitively priced imports will have to come from somewhere – and because of the intricate and complex integration of manufacturing supply chains. Since 2021 and the Evergrande Turning Point, China had doubled down on exports up and down manufacturing chains, reducing the room for competitors in low, medium and high-value industries. This includes its switch to net export positions in products such as PTA and styrene, and the potential for this to happen in products such as PP,  acrylonitrile butadiene styrene (ABS) and polycarbonate (PC). I, therefore, believe that antidumping, tariff and other protectionist measures against China will accelerate in 2025. China will respond in kind. First came the pandemic-related disruptions to global container shipping and, since February of this year, we’ve had to contend with the Houthi attacks on shipping that have disrupted access to the Suez Canal via the Red Sea. Access to cost-efficient and prompt logistics will remain a key competitive advantage in 2025 for chemicals companies as global trade flows will remain disrupted for whatever reasons. The ICIS numbers tell us that because of disappointing Chinese demand, and the scale of global capacity closures required to bring markets back into balance, a new upcycle in 2025 is a very remote possibility. Expect no upswing for at least the next three years because of the scale of the shutdowns necessary. I could be wrong, of course. I’ve been advised not to keep saying this, but I disagree as nobody likes somebody who never concedes when they are wrong, moves on from the history of where and when they have been wrong, and assumes that they will always be right in the future. 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.

11-Dec-2024

SINGAPORE (ICIS)–China is expected to implement a “more proactive fiscal policy” and a “moderately loose” monetary policy for next year, according to the country’s top officials, amid economic headwinds and looming heavy tariffs from the US. Central bank likely to cut key interest rates, banks’ reserve requirements China 2025 GDP growth forecast to slow to 4.3% in 2025 – UOB New US-China trade war in the offing The policy shift was announced following a meeting by the Political Bureau of the Communist Party of China (Politburo) and was meant to boost overall consumption in the world’s second-biggest economy. The change in monetary policy stance was the first since 2011 amid flagging economic growth and the prospect of high tariffs that will be imposed on Chinese goods by the US next year, with Donald Trump coming back to assume control of the White House for the next four years from 20 January 2025. The policy shift was announced ahead of the annual Central Economic Work Conference (CEWC), which kicked off on Wednesday. China’s growth targets and stimulus plans for 2025 will be hammered out at the meeting which will then be released at the National People's Congress (NPC) in March 2025. “The Politburo signalled that China’s growth target of ‘around 5%’ this year will be met and the ‘main objectives and tasks for the year's economic and social development will be successfully accomplished’,” UOB Global Economics & Markets Research economists said in a note on 10 December. “We think the focus will be on releasing long-term liquidity via reserve requirement ratio (RRR) reductions,” said the economists. MORE STIMULUS REQUIRED China had set a target of 5.0% GDP growth for 2024 but has struggled to hit that benchmark all year as high youth unemployment and weaker demand hit production levels. Fiscal stimulus measures were introduced around end-September, but were deemed insufficient for China to achieve its GDP growth target of around 5% in 2024. “Stimulus directed at promoting consumption would likely have a larger impact than investments or big infrastructure projects,” the UOB note added. November economic data suggest a slow recovery in demand, but it appears unlikely that it will recover sufficiently to achieve the growth target next year if additional US tariffs were imposed in 2025. Official data showed that China’s consumer price index (CPI) increased by 0.2% year on year, a five-month low. Meanwhile, China's exports in November grew at a slower year-on-year rate of 6.7% to $312.3 billion, while imports fell 3.9% year on year on weaker domestic demand. Amid flagging Chinese demand, Saudi Arabia, the world’s largest crude exporter, cut its January Official Selling Price (OSP) for its benchmark Arab Light crude to the lowest level in four years. The January OSP for Arab Light was cut by 80 cents/barrel to Oman/Dubai average plus 90 cents/barrel, the lowest level for buyers in Asia since January 2021. US-CHINA TRADE WAR 2.0 LOOMS As China struggles to turn its economic fortunes around, it faces a difficult 2025 and a hostile US administration under Trump. Trump’s first term as US president in 2017-2021 was characterized by a trade war launched against China. UOB Global Economics & Markets Research economists are projecting China’s GDP growth to slow to 4.3% in 2025 from 4.9% this year, “with potentially more punitive US tariffs posing downside risks next year”. A consequential weakness of the Chinese yuan from a looser monetary policy, meanwhile, makes the country’s exports more competitive. Like most Asian economies, China is export-oriented and counts the US as a major market. For the first 11 months of 2024, China’s total exports increased by 5.4% year on year to $3.2 trillion amid a global economic slowdown, while imports rose at a slower pace of 1.2% over the same period to $2.4 trillion. China remains a major importer of petrochemicals, but heavy capacity expansions accompanied with weak domestic demand in recent years has turned it into a net exporter of selected products, including purified terephthalic acid (PTA). Focus article by Jonathan Yee

11-Dec-2024

MUSCAT (ICIS)–Thailand’s PTT Global Chemical (PTTGC) is expected to begin producing sustainable aviation fuel (SAF) at its refinery in Map Ta Phut early next year, the company’s CEO Narongsak Jivakanun said. “We are commissioning, although it is on a small scale, but it is an important step – SAF [production] in Q1 next year using our existing oil refinery but blended with non-fossil fuel based raw material,” Jivakanun told ICIS on the sidelines of the 18th Annual Gulf Petrochemicals and Chemicals (GPCA) Forum in Muscat, Oman. The company plans to produce 500,000 liters of SAF per month, using up to 1,700 tonnes of used cooking oil per month as feedstock. SAF is used as a direct replacement for traditional fossil-based jet fuel to power aircraft. Moreover, by leveraging the mass balance approach, the change in how the refinery accommodates use of alternative feedstock in the production of SAF enables it to claim a portion of its downstream aromatics, polymers, and olefins output as non-fossil chemical products, he said. PTTGC is the first Thai company to upgrade its refinery with advanced technology to accommodate used cooking oil as feedstock. The company’s biorefinery project is a component of the company's three-pronged growth strategy – “Step Change, Step Out and Step Up” – which, in part, prioritizes business sustainability through decarbonization efforts, according to Jivakanun. PTTGC is also on track to fully start up a new fully integrated polylactic acid (PLA) unit at the Nakhon Sawan Biocomplex (NBC) by the end of next year, he said. The PLA project is being carried out by NatureWorks, the equal joint venture firm between the US’ Cargill and PTTGC and will use sugarcane sourced locally as feedstock. THAI SPECIALTIES HUB AMBITIONS  Allnex, a global specialty chemicals subsidiary of PTTGC, is currently planning to expand its specialty resins production in Map Ta Phut with an aim to develop the site to become a hub for selected coating resins serving the southeast Asia region, according to Jivakanun. “The plan is to develop a hub in Map Ta Phut so that they can share the infrastructure that [PTT]GC already has, utilities, the engineering and operational support," he said. "Expertise sharing between GC and allnex will enhance potential of value engineering resulted in cost savings into the project." The project is in the stage of finalizing the scope with an aim to produce specialty resins that most fit customer demands and requirements Allnex specializes in the production of industrial coating resins and additives. “We will go through the feasibility study as usual and we aim to confirm the investment for allnex Map Ta Phut hub within next year," Jivakanun added. Interview article by Nurluqman Suratman

04-Dec-2024

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 29 November. Final round of UN plastics treaty talks begin in South Korea By Nurluqman Suratman 25-Nov-24 12:23 SINGAPORE (ICIS)–The fifth and final round of United Nations (UN)-led negotiations for a global plastics treaty to combat plastic pollution kicked off in Busan, South Korea, on Monday. INSIGHT: China cuts PV export tax rebate; EVA sector faces margin squeeze By Joanne Wang 25-Nov-24 18:04 SINGAPORE (ICIS)–China's Ministry of Finance and the State Administration of Taxation announced on 15 November a reduction in export tax rebate rate for solar products, including photovoltaic (PV), batteries and other certain products, from 13% to 9%. Asia petrochemical shares slip; Trump eyes 10% new tariffs for China By Nurluqman Suratman 26-Nov-24 12:00 SINGAPORE (ICIS)–Asian petrochemical shares were mostly lower on Tuesday after US President-elect Donald Trump threatened to impose an additional 10% tariffs on Chinese goods. Asia fatty alcohol mid-cuts demand weighed down by feedstock PKO volatility By Helen Yan 27-Nov-24 10:23 SINGAPORE (ICIS)–Asia’s fatty alcohol mid-cuts market is likely to see a lull in spot activities in the near term as a widening buy-sell price gap has hampered trades. World Plastics Council, Global Plastics Alliance urge governments to secure UN plastics treaty By Nurluqman Suratman 27-Nov-24 12:12 SINGAPORE (ICIS)–The World Plastics Council (WPC) and Global Plastics Alliance (GPA) members are urging governments to finalize a landmark treaty to end plastic pollution through scaled-up waste management and recycling, while respecting countries’ differing needs. Thailand to compete for spot Asia ACN, MMA as PTTAC plants close By Jonathan Yee 27-Nov-24 15:22 SINGAPORE (ICIS)–Thailand will have to tap the spot Asian markets for acrylonitrile (ACN) and methyl methacrylate (MMA) for its domestic requirements starting 2025 following closures of PTT Asahi Chemical (PTTAC)’s plants in Map Ta Phut. S Korea central bank cuts key interest rate anew; trims GDP forecasts By Jonathan Yee 28-Nov-24 11:56 SINGAPORE (ICIS)–South Korea’s central bank on Thursday made a surprise cut to its key interest rate, following a similar move in the previous month, amid concerns over economic implications of the US’ impending tariffs on all foreign goods. Asia butac, etac markets languish in slow demand By Melanie Wee 29-Nov-24 13:44 SINGAPORE (ICIS)–Asia-Pacific butyl acetate (butac) markets were undermined by slowing demand entering the year-end lull against a backdrop of ample regional supply.

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 nearly 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. (recast and adds "nearly", paragraph 17)

27-Nov-2024

LONDON (ICIS)–Europe adipic acid and downstream nylon 6,6 markets face bleak prospects for demand in December, followed by a broadly flat outlook in 2025, with overall weak consumption from key derivative markets. Over the past few months, very slow demand and ample supply have continued to dominate European markets alongside rising costs of production. In this latest podcast, ICIS editors Meeta Ramnani and Marta Fern share the latest developments and expectations for what lies ahead. Seasonal destocking to weaken buying interest further in December Demand could stay low in 2025; recovery depends on macroeconomic factors Q1 2025 could bring restocking; its magnitude unclear Asian adipic acid import volumes likely to increase in Q1

21-Nov-2024

SINGAPORE (ICIS)–Avantium has signed a multi-year collaboration agreement to pilot the production of polylactic-co-glycolic acid (PLGA) from carbon dioxide (CO2), with Thai producer SCG Chemicals (SCGC), the Netherlands-based circular polymer materials firm said on Wednesday. PLGA is a biodegradable, recyclable polyester which is an alternative for conventional fossil-based polyesters. "Under this agreement, SCGC will provide support for all stages of technology development," Avantium said in a statement. Financial details of the deal were not disclosed. "Additionally, SCGC will work with Avantium on developing various PLGA applications, aiming to bring these sustainable solutions to market." Avantium and SCGC have spent the past year exploring the properties of PLGA to perfect its formulation for large-scale polymer applications, with a focus on barrier properties, recyclability, and environmental impact. As part of the collaboration, Avantium grants SCGC an option to negotiate license deal to utilize its Volta technology, including PLGA production, within southeast Asia. Avantium’s Volta technology uses electrochemistry to convert CO2 to high-value products and chemical building blocks including glycolic acid. Glycolic acid, combined with lactic acid, can be used to produce PLGA polyester in existing manufacturing assets.

20-Nov-2024

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 8 November. Oil up by more than $1/bbl as OPEC+ delays output hike By Jonathan Yee 04-Nov-24 12:46 SINGAPORE (ICIS)–Oil prices rose by more than $1/barrel on Monday as oil cartel OPEC and its allies (OPEC+) delayed a planned December production increase by a month, and amid fears of an escalating conflict between Iran and Israel. India petrochemical demand enters seasonal lull post-holiday By Jonathan Yee 04-Nov-24 13:26 SINGAPORE (ICIS)–Oversupply and higher freight costs are driving down petrochemicals demand in India, with trades likely to remain subdued after the Diwali holidays. Saudi SABIC cuts 2024 capex; higher-margin investments eyed By Nurluqman Suratman 05-Nov-24 17:17 SINGAPORE (ICIS)–Saudi petrochemical giant SABIC has lowered its capital expenditure (capex) guidance for 2024 as it prioritizes investments in higher-margin opportunities to mitigate overcapacity in the face of poor global demand. Oil prices fall more than $1/barrel ahead of US election results By Nurluqman Suratman 06-Nov-24 15:32 SINGAPORE (ICIS)–Crude oil prices fell by more than $1/barrel on Wednesday in Asia following a rally in the US dollar as polls in the 2024 US presidential elections closed. INSIGHT: Asia faces tariff hikes after Trump's re-election By Nurluqman Suratman 07-Nov-24 14:40 SINGAPORE (ICIS)–Donald Trump's re-election as US president sets the stage for economic turbulence in Asia as regional businesses brace for significant increases in US tariffs. INSIGHT: Trump’s win to hit China economy as decoupling intensifies By Fanny Zhang 07-Nov-24 17:32 SINGAPORE (ICIS)–Donald Trump’s return to the White House could intensify trade frictions with China, fostering decoupling of the world’s two biggest economies, with Chinese exporters looking at making advance shipments to the US before new tariffs are imposed. PODCAST: China oxo-alcohols output to hit record high on new capacities By Claire Gao 07-Nov-24 19:00 SINGAPORE (ICIS)–China's oxo-alcohols market will face a supply glut in the face of intensive new plant start-ups and tepid downstream demand. China Oct exports rise 12.7% as tariff fears spur frontloading By Jonathan Yee 08-Nov-24 12:56 SINGAPORE (ICIS)–China's exports surged 12.7% year on year to $309 billion in October, driven by low base effects and a rush to ship goods ahead of a potential wave of tariffs from Donald Trump’s renewed US presidency.

11-Nov-2024