Oxo-alcohols

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 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

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. Net import volumes may plunge in the short term because of overseas plant turnarounds and rising domestic supply, whether this can sustain depends on overseas plant operations and import arbitrage opportunities. In this latest podcast, ICIS editors Claire Gao and Jady Ma share the latest developments and expectations for what lies ahead. New oxo-alcohols capacities hit 1.3 million tonnes/year in July-Oct 2024 Oxo-alcohols supply to rise steadily in short term on few maintenance outages Oxo-alcohols net imports to decline on overseas plant turnarounds, rising domestic output

07-Nov-2024

LONDON (ICIS)–Throughout October, demand in the European oxo-alcohols and derivatives markets has been slow-paced and below initial expectations. Sluggishness is expected to persist throughout the remainder of Q4, influenced by various factors including wider economic weakness, geopolitical tensions, and end-of-year destocking. 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.  

29-Oct-2024

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 20 September. Sluggish demand keeps Europe oxo-alcohols prices stable despite some constraints Prices in the European oxo-alcohols spot market held steady for all grades this week, although some producers had supply constraints, as demand remained underwhelming. Africa PE/PP prices tumble on high stocks, fierce competition among sellers African polyethylene (PE) and polypropylene (PP) prices are stable to down this week, as buyers increasingly find themselves in a strong position. Europe BD supply likely to stay tight until year-end Several production events have shaped the European butadiene (BD) market in 2024, and this looks set to continue through the fourth quarter. Europe MA spot prices stable, but offers for October firming on reduced local output European maleic anhydride (MA) spot prices were stable last week, but offers for October delivery were firming. Urea short-term trend firms after India tender, but global demand still lacking A lack of buying interest at all import hubs except for India will keep any upside capped for urea, but the short-term trend has stabilized after National Fertilizers Limited (NFL) bought over a million tonnes.

23-Sep-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)–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

SINGAPORE (ICIS)–A severe shortage of containers and vessel space as commercial ships take a much longer route to avoid the Red Sea has sent freight rates skyrocketing in recent weeks, artificially propping up petrochemical prices even as demand remained generally weak. Some sellers offer on free on board (FOB) basis but no takers Freight costs for Chinese exports more than double India may suffer near-term shortage of select petrochemicals Across markets in Asia in recent weeks, industry players’ lament boils down to this exasperated hyperbole: “The freight rates are killing us!” It takes the fun out of witnessing some initial signs of recovery in external demand for global manufacturing giant China. Whatever export competitiveness Asia gained from having weaker currencies against the US dollar is being undermined by the high cost of shipping out of the region. The Chinese yuan recently fell to a six-month low, while the Japanese yen continues to trade at multi-year lows against the US dollar, which is firmly supported by higher-for-longer interest rates. Overseas demand for Chinese products, including petrochemicals, seems to be improving, but actual trades are being hampered by logistics woes stemming from the Red Sea crisis in the Middle East. Attacks on commercial ships have continued in the key shipping lane that connects Asia to Europe, the latest being on an oil tanker bound for China. Rerouting of ships to the Cape of Good Hope meant longer voyage times and much slower turnover of vessels and containers, thereby, creating a strong pressure on freight rates, which may persist for most of the year. “The race for capacity appears to have started, with shippers showing strong demand due to shippers moving significant cargo in the first four months of 2024 to avoid potential Q3 constraints​​,” Richard Fattal, chief commercial officer of London-based freight forwarder Zencargo said in a note on 20 May. “Combined with an average of 5% ongoing blanked sailings, there is a looming future of tighter capacity, higher rates and sellers’ market swings ahead,” he said. “With capacity shrinking in the face of resurgent port congestion, driven by equipment shortages in China and longer routes around the Cape of Good Hope,” Fattal said. For Q2, Zencargo is projecting more than a 13% contraction shipping capacity on the Asia-Europe routes compared with Q3 2023, “with alliances cancelling 5% of sailings between weeks 20 and 24 [H2 May to H1 June]”. “The effective capacity to Northern Europe, based on actual vessel departures from Asia, has decreased by 5.1% compared to a year ago,” it said, citing “the longer route taken by the majority of vessels via the Cape of Good Hope, despite a 17.8% increase in vessel capacity on the Asia-North Europe route”. For the Asia-Mediterranean route, however, the overall capacity has “increased by 10.5%, even with the diversions via the Cape” due to a 49.1% increase in total deployed capacity on this route compared to a year ago”, Zencargo said. WEST BUILDING WALLS AGAINST CHINA TRADES The July-September period is the peak season for Chinese shipments to the west, ahead of the Christmas season in December, according to Wang Guowen, director at Shenzen Logistics and Supply Chain Management Research. Possibly driving up US’ overall demand for Chinese goods, which exerts upward pressure on shipping costs, is the impending tariff hike on imports of selected products from China, including electric vehicles (EVs) and battery materials. For Chinese EVs, the US import tariffs would quadruple to 100% from 1 August, which is tantamount to a ban. European countries appear to be considering similar protectionist measures against China, whose overcapacity is deemed to be killing domestic industries in the west. “Western countries' implementation of tariffs and tax structures on Chinese-manufactured automotive and EV exports is anticipated to significantly impact the shipping sector by potentially reducing vessel demand,” online container and leasing platform Container xChange said in a recent note. To bypass these trade barriers, Chinese automotive and EV makers “are accelerating efforts to internationalize their manufacturing, assembly, and distribution processes”, it said, adding that “immediate effects are already evident, as manufacturers are hastening to ship EVs to avoid impending tariffs and uncertainties”. In the global petrochemical scene, manufacturing facilities in the US and Europe, as well as in parts of northeast Asia are shutting down amid China’s overcapacity. Technically, reduced production elsewhere would open up new markets for China’s excess capacity, if not for the surging freight rates, which further deter trades while demand recovery remains fragile. China’s overall exports have remained soft, posting low single-digit annualised growths in three of the first four months of 2024, with one month in contraction. HEADACHE FOR INDIA PETROCHEMICAL IMPORTERS Petrochemical end-users in India are facing long waiting time to get their hands on imports from China. “Now, no shipping lines will confirm fresh Q2 shipment booking, even after dishing out quotes that are three to four times higher than Q1,” an India-based styrene butadiene rubber (SBR) importer said. A phenol trader said: “June vessel arrangements are more troublesome this year because of the Red Sea issues and also China's exports have been weak especially in the past two months, so fewer vessels are being arranged to China.” India is possibly facing a near-term shortage of purified terephthalic acid (PTA), since northeast/southeast Asian suppliers are struggling to export to the south Asian market. Freight rates from both Taiwan and Thailand to India nearly doubled from April, with voyage time for some shipments taking as long as 90 days, up from the usual 30-40 days. For polyethylene (PE) and polypropylene (PP), cargoes from the Middle East heading to the south Asian markets of India and Pakistan are also being delayed, amid congestion at the ports of Salalah in Oman, Dammam in Saudi Arabia and Jebel Ali in the UAE. For polymeric methylene diphenyl diisocyanate (PMDI) of northeast Asian origin, offers to India have spiked amid tightened regional supply, with delays in getting cargoes from South Korea. SURGING SHIPPING COSTS KILLING SPOT TRADESSpot petrochemical trades are being stalled by constantly changing freight rates on a weekly basis. In the polypropylene (PP) market, some Chinese suppliers have stopped offering on a cost, insurance and freight (CIF) basis, and will only offer on FOB basis because of the risks. For the China-to-Vietnam and the Vietnam-to-Indonesia routes, freight rates have nearly tripled, market players said. Buyers are less willing to discuss on an FOB basis, unwilling to shoulder an expected high cost since most of them do not have their own regular shipper. For soda ash, offers of Turkey-origin dense grade cargoes for 1,000-tonne lots to southeast Asia for Q3 shipments rose to around $300/tonne CFR, up by $20-30/tonne compared with May shipments. Importers of the material across Asia were largely staying on the side lines, with some of them experiencing delays in receiving Turkish cargoes. “Discussion levels are firming up due to freight costs,” said an end-user, adding that the “Red Sea issue is getting worse and lots of shipments from Europe and USA are stuck.” The same is true for the southeast Asian PE market given delays in arrivals of Middle East-origin cargoes and amid perceptions of shorter supply. In the oxo-alcohols markets, producers in Asia are under strong pressure to offload cargoes at lower prices given difficulty in moving volumes to their usual export outlets. Freight rates on chemical tankers are also on the rise amid the Red Sea crisis, sources from Asia’s monoethylene glycol market, resulting in postponing of cargo-loading by some producers. “The freight rates are quite high now, and we have to optimize our vessel availability,” a major MEG producer said. FURTHER FREIGHT SPIKES LIKELY IN JUNE H2 is typically “a busier, more competitive, and profitable season for the shipping industry”, with many container sellers are “currently holding onto their inventory” in anticipation of better demand, said Christian Roeloffs, co-founder and CEO of Container xChange, in a note in May. "In an environment of heightened market volatility and encouraging demand recovery for global trade, container traders are gearing up for the second half of 2024, where we expect a cyclical rise in demand,” he said. “This combination of heavier-than-expected demand for freight and anticipation of further demand surges in the second half of 2024 is driving up container trading prices in China,” Roeloffs added. In a recently conducted survey of container traders and leasing companies by Container xChange, it noted that a majority of the respondents reported “extremely high prices for 40 ft high cube containers in China”. On 21 May, the average one-way leasing rates quoted in the market rose to as high as $2,480 for 40 HC in China for US-bound shipments, more than double the rate at the start of the month at around $950, it said. With ceasefire between Israel and Palestinian militant Hamas in Gaza proving elusive and the threat of a wider Middle East conflict still hanging, it looks like high freight rates are here to stay for an extended period. Insight article by Pearl Bantillo With contributions from Nurluqman Suratman, Fanny Zhang, Nadim Salamoun, Judith Wang, Helen Lee, Ai Teng Lim, Samuel Wong, Julia Tan, Izham Ahmad, Jackie Wong, Shannen Ng, Helen Yan and Clive Ong

29-May-2024

SINGAPORE (ICIS)–Asia's oxo-alcohols buyers maintained a wait-and-watch approach on the market amid possibility of added plant capacities in China. The acrylonitrile (ACN) market continues to see limited spot demand in northeast Asia. Even with recent higher production rates at downstream acrylonitrile-butadiene-styrene (ABS) plants, ACN producers were unlikely to increase operating rates. For the acrylates downstream, butyl-A market in Asia continues to take direction from Chinese domestic prices. With India's Bureau of Indian Standards (BIS) requirements preventing Chinese-origin imports, cargoes from China were flowing into southeast Asia and northeast Asia. In this podcast, ICIS editors Julia Tan and Corey Chew discuss trends in the Asia propylene (C3) and derivatives markets. (This podcast first ran on 15 May.) Visit ICIS during APIC ’24 on 30-31 May at Booth 13, Grand Ballroom Foyer of the Grand InterContinental Seoul Parnas in South Korea. Book a meeting with ICIS here.

28-May-2024