Oleochemicals

SINGAPORE (ICIS)–Reliance Industries Ltd’s (RIL) oil-to-chemicals (O2C) business posted a 14.3% year-on-year drop in earnings in its fiscal first quarter ending June 2024 on poor chemicals margins, the Indian conglomerate said. O2C results in 10 million rupees (Rs) Apr-June 2024 Apr-June 2023 % Change Revenue 157,133 133,031 18.1 EBITDA 13,093 15,286 -14.3 Exports 71,463 69,006 3.6 – Revenue for the period rose primarily on the back of higher product prices in line with Brent crude price gains, and increased volumes due to strong domestic demand, the company said on 19 July. – Fiscal Q1 overall earnings before interest, tax, depreciation and amortisation (EBITDA) margin dropped to 8.3% from 11.5% in the same period of last year. – On a year-on-year basis, April-June domestic polymer and polyester demand increased by 8% and 5%, respectively. – RIL's consolidated group profit after tax fell by 4% year on year to Rp175 billion ($2.09 billion) in April-June 2024. Polymers- Fiscal Q1 polymer margins were down by 0.5% to 16.9% year on year due to firm naphtha prices. Product margin over naphtha April-June 2024 ($/tonne) April-June 2023 ($/tonne) % Change Polyethylene (PE) 330 397 -16.9% Polypropylene (PP) 318 381 -16.5% Polyvinyl chloride (PVC) 371 373 -0.5% Polyester – Paraxylene (PX) and monoethylene glycol (MEG) margins over naphtha decreased year on year due to higher naphtha prices. – "PTA [purified terephthalic acid] margins were impacted adversely due to high inventory with Chinese producers and increased competition," the company said. – On a year-on-year basis, domestic polyester demand in fiscal Q1 increased by 5%, driven by strong growth in PET, which was up 27% due to "higher demand from the beverage segment on account of summer season and elections". ($1 = Rs83.7)

22-Jul-2024

SINGAPORE (ICIS)–Malaysia's economy grew by 5.8% year on year in the second quarter, driven by stronger exports and an expansion in the services sector, official advance estimates showed on Friday. The second-quarter GDP print follows the stronger-than-expected annual growth of 4.2% in the first quarter of 2024, the Department of Statistics said in a statement. Manufacturing for the period posted a stronger annualized growth of 4.7% compared with the 1.9% pace set in the first quarter. On a quarter-on-quarter basis, Malaysia's economy grew by 0.7% in April-June, reversing the 3.1% contraction registered in Q1. Q2 exports grew faster by 5.8% year on year to ringgit (M$) 368.8 billion ($84 billion), compared with the 2.0% growth in the previous quarter. Malaysia’s services sector expanded by 5.6% year on year in the second quarter, accelerating from the 4.7% expansion in the first three months of 2024. In H1, the country’s GDP growth averaged 5.0%, stronger than the 4.1% growth posted in the same period last year. Malaysia is southeast Asia’s fifth-largest economy and a net exporter of polyolefins. The country is also one of the largest producers and exporters of oleochemical products worldwide, contributing about 20% to global capacity, according to the Malaysian Petrochemicals Association (MPA). ($1 = M$4.67) Thumbnail image: Petronas Towers in Kuala Lumpur, Malaysia (Source:C F Tham/AP/Shutterstock)

19-Jul-2024

HOUSTON (ICIS)–The ports of Houston and Freeport in Texas remain mostly closed on Tuesday while millions remain without power following Hurricane Beryl's landfall at the start of the week. Port Houston said all of its terminals will remain closed on Tuesday. Port Freeport said the Freeport Harbor Channel is closed. Gates 4 and 14 are closed, while Gate 8 is opened. Freeport LNG Development had shut down its LNG operations at Freeport on July 7. It can export 15 million tonnes/year. Loadings for LNG tankers slowed considerably on 8 July due to rough seas and suspension of pilot services at Calcasieu Pass and Sabine Pass. Both are in Louisiana. The port of Corpus Christi is scheduled to reopen on Tuesday. It is the third largest oil-exporting port in the world, and it is home to Corpus Christi Liquefaction, a terminal that can export 15 million tonnes/year of liquefied natural gas (LNG). MILLIONS REMAIN WITHOUT POWERBeryl made landfall on Sunday in Matagorda, Texas, as a Category 1 hurricane, with maximum sustained windspeeds of 80 miles/hour (130 km/hour). So far, much of its effect on chemical operations has been by interrupting power. On late Tuesday morning, Texas reported more than 2.82 million outages, according to the website poweroutage.us, which keeps track of power outages in the US. CenterPoint Energy, the main electrical transmission and distribution company in Houston, said more than 1.76 million customers remain affected by outages. Entergy, the main one for eastern Texas, said on Monday evening that 247,000 customers remained without power. Texas-New Mexico Power, which handles the areas around Freeport and Galveston said it 73,220 customers are affected by outages. BERYL CAUSED SOME CHEM SHUTDOWNSElectrical outages and precautions had caused some chemical companies and refiners to shut down units. Enterprise Products said bad weather caused a trip to a propane dehydrogenation (PDH) unit in Mont Belvieu, Texas. Marathon Petroleum reported power loss and multiple unit shutdowns at its Galveston Bay refinery. Dow shut down its operations in Seadrift, Texas, as a precaution. In Baytown, ExxonMobil said it is continuing to assess the site for possible damage as it resumes normal operations. The company anticipated minimal impact to production. Formosa Plastics shut down its Olefins 1 unit at Port Comfort, Texas. Interoceanic Corporation (IOC) said its affiliate, PCI Nitrogen, has halted ammonium sulphate (AS) and sulphuric acid production at its facility in Pasadena, Texas. Phillips 66 reported an upset at its refinery in Sweeney, Texas. The refiner did not say if it shut down any unit. Personnel had returned it to normal operations. CITGO reduced operating rates at its refinery in Corpus Christi, Texas. BASF Total Petrochemical's cracker in Port Arthur, Texas, produced off-spec material because of a suspected lightning strike. LIMITED RAIL DISRUPTIONSOn Monday, BNSF said its Pearland intermodal facility in Houston remained closed.  WEATHER FORECASTIn the late morning, Beryl had degraded into a post tropical cyclone with maximum sustained winds of 30 miles/hour, according to the National Hurricane Center. It was in the northeastern part of the US state of Arkansas, and meteorologists expected it would continue traveling in that direction towards Canada. Thumbnail shows flooding caused by Beryl. Image by Reginald Mathalone/NurPhoto/Shutterstock

09-Jul-2024

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 5 July 2024. OUTLOOK: Snug import supply supports Asia MEG amid slowing demand By Judith Wang 03-Jul-24 11:52 SINGAPORE (ICIS)–Monoethylene glycol (MEG) import supply in Asia for July is expected to stay snug in the near term, while demand looks set to slow down. INSIGHT: Methanol or ethylene, that is the question for China By Doris He 02-Jul-24 17:00 SINGAPORE (ICIS)–China’s methanol-to-olefins (MTO) industry has always been a focus of attention among methanol market players, as it accounts for half of overall demand. More attention has recently been shifted to ethylene, from the overall margins of a typical MTO plant in coastal regions. OUTLOOK: Asia nylon markets may slow down in H2 2024 on lengthened supply By Charmaine Lim 01-Jul-24 14:40 SINGAPORE (ICIS)–Nylon markets in Asia are expected to slow in H2 2024 compared to the first half of the year as the upcoming seasonal lull in Q3 approaches, with new capacities planned to start up in China this year. S Korea antidumping probe on China SM extends to Sept, discussions and hearings ongoing By Luffy Wu 01-Jul-24 15:22 SINGAPORE (ICIS)–The Korea Trade Commission is continuing with its anti-dumping probe against styrene monomer (SM) imports from China, with some discussions and hearings between the government and market players heard ongoing. PODCAST: China oxo-alcohols to face supply-demand pressure, new capacity to be a focus By Claire Gao 01-Jul-24 19:24 SINGAPORE (ICIS)–In this podcast, ICIS analyst Claire Gao explores the oxo-alcohols market overview and outlook. OUTLOOK: Persistent economic woes dampen Asia chemical freight demand By Hwee Hwee Tan 02-Jul-24 12:03 SINGAPORE (ICIS)–Asia’s chemical freight demand is dampened as macroeconomic doldrums were pulling back spot trades well into the third quarter despite reducing plant capacity losses for key liquid bulk products.

08-Jul-2024

SINGAPORE (ICIS)–A consortium consisting of four Asian petrochemical producers have agreed to establish a sustainable polyester fiber supply chain. Japan's Mitsubishi Corp, South Korea’s SK geo centric, Thailand’s Indorama Ventures Ltd (IVL), and India Glycols along with three other companies are part of the consortium, the companies said in a joint statement on Thursday. Japanese sports apparel firm Goldwin is the project owner of the initiative, while Finnish refiner Neste is also part of the consortium alongside Japan-based engineering firm Chiyoda Corp. Financial details of the project were not disclosed. The project aims to utilize renewable and bio-based materials as well as materials produced via carbon capture and utilization (CCU) to manufacture polyester fibers for THE NORTH FACE brand in Japan. Outdoor apparel and equipment brand THE NORTH FACE is operated by Goldwin in Japan. "After that, the launch of further products and brands of Goldwin will be considered," Chiyoda said in the statement. The polyester fiber produced from the project is planned to be used by Goldwin for a part of THE NORTH FACE products, including sports uniforms in July this year. Chiyoda will supply CCU-based paraxylene (PX) to the supply chain, while Thai polyester producer IVL will contribute renewable CCU-based purified terephthalic acid (PTA). In March 2022, Chiyoda started producing carbon dioxide (CO2)-based PX at its pilot plant at the company's Koyasu Research Park in Kanagawa prefecture as part of a project linked with Japan's New Energy and Industrial Technology Development Organization (NED). SK geo centric and Neste will be supplying renewable PX and renewable naphtha, respectively. India Glycols, which produces monoethylene glycol (MEG), will supply bio-ethylene glycol made mainly from sugarcane. Toyobo MC Corporation (TMC) – a joint venture between Toyobo Co and Mitsubishi Corp – will be supplying renewable bio-CCU polyethylene terephthalate (PET). Details on supply volumes from each of the consortium partners were not disclosed. Thumbnail photo: A generic polyester clothing label (Sandvik/imageBROKER/Shutterstock)

04-Jul-2024

LONDON (ICIS)–Inflation in the eurozone resumed its downward trend in June, falling to 2.5% from 2.6% in the previous month, according to official data on Tuesday. The rate of inflation has been ticking down consistently over the past few months, with the exception of May which saw a 0.2 percentage point increase from April. June’s annual inflation was mainly driven by services, followed by food, alcohol & tobacco, non-energy industrial goods and energy, statistics agency Eurostat said in its flash estimate, which is subject to revision. The European Central Bank (ECB) cut its key interest rates for the first time since 2019 on 6 June as inflationary pressures broadly eased.

02-Jul-2024

SINGAPORE (ICIS)–In this podcast, ICIS analyst Claire Gao explores the oxo-alcohols market overview and outlook. Q2 oxo-alcohols prices largely fluctuate upwards amid low inventories, but decline at the end of the quarter Several new plants scheduled to start-up in Q3 may intensify competition Plentiful exports in up and downstream sectors in H1 2024; huge uncertainty in H2

01-Jul-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

SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 14 June. NEWS  INSIGHT: Brazil, Mexico currencies take a hit, energy policy under Sheinbaum remains in spotlight The Mexican peso continued sliding this week as the new President Elect Claudia Sheinbaum’s Morena party achieved the "super-majority" investors feared, which could open the door to one-party constitutional reforms, while her energy policy remains on the spotlight. Argentina’s inflation down to 276% in May, first fall in 10 months Argentina’s annual rate of inflation fell in May to 276.4%, down from April’s 289.4%, the country’s statistical office, Indec said, the first fall since July 2023 and six months after President Javier Milei took office. Higher import tariffs one leg of wider plan to save Brazil’s besieged chemicals producers – Abiquim Proposals to sharply increase chemicals import tariffs are only one of the three aspects Brazil’s chemicals producers have proposed to the government to save their "besieged” operations, according to the CEO at trade group Abiquim. Mexico’s petchems supply flowing despite Altamira disruption, but industry crisis could continue The drought affecting the Altamira petrochemicals hub in Mexico’s state of Tamaulipas is not yet affecting the supply of chemicals, but the water restrictions for industrial players could continue, sources said this week. Brazilian pulp producer Suzano to acquire 15% stake in Austria’s Lenzing Brazilian pulp producer Suzano has agreed to acquire a 15% stake in Austrian cellulosic fibres company Lenzing for €230 million, paying €39.70/share, officials said on Wednesday. Brazil fertilizers interactive trade flow map January-May 2024 The Ministry of Development, Industry and Foreign Trade for Brazil has released fertilizer trade figures for January-May 2024. Future disruption to Panama Canal will depend on El Nino intensity – expert Despite arrangements put in place to make the Panama Canal fit for a changing climate, future disruption at the Americas key shipping route will depend on a variable no-one can predict: the intensity of future El Niño weather phenomenon, according to an expert at maritime services provider CB Fenton on Tuesday. Mexico’s chemicals output up 7.2% in April, manufacturing up nearly 4.0% Mexico’s chemicals output rose by 7.2% in April, year on year, well above the 3.8% increase in overall manufacturing activity, the country’s statistical office Inegi said on Tuesday. Chemical tanker prices rise as much as 75% since 2020 on lack of liquidity – expert Chemicals tanker prices have risen globally 30-75% in the past four years on a lack of liquidity, an expert at Chile-headquartered chemicals bulk operator Ultratank said on Tuesday. Brazil’s inflation up to 3.93% in May; prices rise sharply in floods-hit state Brazil’s annual rate of inflation rose in May to 3.93%, up from 3.69% in April, with notable price rises registered in food products, especially in the floods-hit state of Rio Grande do Sul, the country’s statistical office IBGE said on Tuesday. Closures of high-cost assets to accelerate in Europe, northeast Asia – ICIS Announcements of closures for high-cost assets, especially in Europe and northeast Asia, are likely to accelerate in coming quarters as the global petrochemicals industry is forced to rationalize, according to an ICIS analyst on Tuesday. Venezuela’s Pequiven, Turkey’s Yildirim mull petchems, ammonia facilities Venezuelan state-owned petrochemicals producer Pequiven has signed an agreement with Turkey’s conglomerate Yildirim to consider building petrochemicals and ammonia facilities in the country, according to the Venezuelan Ministry of Economy. Chile’s Petroquim navigating better than peers pressure from Asian material – exec Polypropylene (PP) producer Petroquim is also facing pressure from lower-priced material sent from Asia, but the company’s “dedicated” service to customers has kept its sales spared from a larger hit, according to the commercial manager at the Chilean company. PRICINGLatAm PP international prices steady to higher on squeezed margins, higher freight rates International polypropylene (PP) prices were assessed as stable to higher across Latin American countries because of higher freight costs and squeezed margins. LatAm PE international prices steady to up on higher offers from abroad International polyethylene (PE) prices were assessed as steady to higher across the region on the back of higher offers from abroad. Plant status: Alpek Polyester’s Altamira plants ceases operations due to water scarcity in Mexico Mexico’s chemicals producer Alpek has declared force majeure for purified terephthalate acid (PTA) out of its 1 million tonnes/year facilities in Altamira, state of Tamaulipas, on the back of the severe drought which has restricted water supplies to industrial companies. Stable PET prices in Mexico prevail amid supply challenges Throughout this week, polyethylene terephthalate (PET) prices have remained stable in Mexico, as per market observations. However, industry participants believe that this stability might not last long.

17-Jun-2024

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 14 June. Steady demand keeps Europe butadiene prices firm, improved output but ongoing limitations European butadiene (BD) output may have improved with the resolution of a couple of unplanned outages in May but an ongoing turnaround in the Netherlands and some unplanned downtime in France, amid talk of other issues, is keeping spot availability constrained and spot pricing firm. ESA ’24: No easy fix for European spot sulphuric acid shortfall European sulphuric acid buyers are somewhat resigned as an ongoing shortage of spot acid continues – with little evidence in sight for any improvement in availability. Europe naphtha, Eurobob crack spreads suffer demand slump Northwest European open-specification naphtha (OSN) spot values recovered from losses sustained last week as upstream Brent crude prices rose. IPEX: Global spot index edges down on lower values across all regions The global spot ICIS Petrochemical Index (IPEX) fell by 0.7% in the week ending 7 June on losses across all regions, not least northwest Europe. Europe chems stocks, markets slump in wake of election upheaval Stocks markets in Europe slumped on Monday after EU parliamentary results pointed to a rise in prominence for Eurosceptic parties, with the announcement of a snap election in France and the resignation of the Belgian Prime Minister.

17-Jun-2024