Engineering plastics (POM, PBT)

HOUSTON (ICIS)–US LSB Industries said it was able to complete a successful turnaround of their Pryor, Oklahoma, fertilizer facility. The company said in a third quarter update that the investments at Pryor were focused not only on improving its reliability and daily ammonia production volume, but also included the debottlenecking of the facility's urea plant. LSB expects this effort will result in an incremental of 75,000 short tons annually of UAN output. At the El Dorado, Arkansas, facility the producer said it completed the construction of an additional 5,000 short tons of nitric acid storage which is providing the ability to capitalize on incremental sales opportunities not previously available. A turnaround at the Cherokee, Alabama, facility will take place this November and a turnaround at El Dorado is scheduled for the third quarter of 2025, with the primary goal being increased volumes. LSB said it continues to make progress on its two energy transition projects and is expecting to start producing low carbon products at El Dorado beginning in 2026 pending regulatory approval. Regarding the Houston Ship Channel project, the company said it has completed the pre-front end engineering design and is working through the results as well as engaging with potential customers and preparing to select an engineering contractor for the final study. It expects to start that effort during the first half of 2025 with completion by mid-2026. Looking at fertilizer market conditions the producer said the ammonia market is healthy, and pricing has been strong driven by many factors including tight US supply dynamics along with geopolitical concerns and extended turnarounds and outages reducing global inventories LSB also cited the delayed start-up of new production capacity in the US Gulf and an export terminal in Russia For UAN the producer said pricing remains solid due to low inventories in the distribution channel following both spring applications and summer fill program with there being historically low imports and strong exports As it looks ahead it feels there is potential pent-up demand at the retailer and producer level which could lead to favorable order volumes and pricing in the first half of 2025.

30-Oct-2024

LONDON (ICIS)—The UK government will support the use of mass balance for chemical recycling under the UK plastic packaging tax using a fuel-exempt accounting approach at site-level, it published in a consultation response late on Wednesday. The original consultation on “Plastic Packaging Tax – chemical recycling and adoption of a mass balance approach” was conducted from 18 July-10 October 2023. “Chemical recycling can complement the use of mechanical recycling technologies by enabling more types of plastic to be recycled and by producing a higher grade of recycled plastic, which can be used in regulated sectors such as food contact packaging. Chemical recycling therefore has the potential to help increase rates of plastic recycling,” the UK government said in its consultation response. As part of the consultation response, the government also announced that it will phase out the use of pre-consumer material as contributing towards recycled content thresholds in tax calculations. Under the UK Plastic Packaging tax, any packaging which is predominantly plastic by weight, and that does not contain at least 30% recycled material is subject to a charge of £217.85/tonne on the total weight of the packaging. When the tax was introduced, both chemical and mechanical recycling were accepted as contributing toward the target, but there was no decision on the acceptance of mass balance. In mass-balance, a certified volume of renewable or recycled material is input across a production run but may not be evenly distributed across each individual product. For example, a plant may use 30% recycled material overall, but one piece of produced packaging could contain 100% recycled material, and the next 100% virgin material, or any mix between those two extremes. Via this method, market players are able to state that they use a certain percentage of recycled or renewable material in their products, without having to prove that percentage in each individual product produced. Mass-balance is widely used in a number of industries and is not exclusive to either mechanical or chemical recycling. There have been different proposed accounting rules for mass-balance, all of which alter the possible recycled polymer output allocations, and therefore profitability throughout the chain, pyrolysis oil’s competitive position against mechanical recycling, and the sector’s attractiveness to investors. Under fuel exempt mass balance accounting rules, volumes used in fuel applications would not be attributable as recycled material, but material not ending up in fuels would be freely attributable across the value chain. Given that pyrolysis oil  – the dominant form of chemical recycling in Europe – is used as a naphtha substitute in a cracker, many see acceptance of mass-balance as an essential enabler for chemical recycling to count towards recycling content thresholds. The UK government will not adopt definitions of chemical recycling under ISO standard 15270:2008, arguing that definitions of chemical recycling must be process and technology neutral. “The government intends to introduce a definition of chemical recycling in line with the proposed definition by the European Coalition for Chemical Recycling, for the purpose of the tax. This will enable businesses to use a mass balance approach to account for recycled material produced from any technology or process that meets the definition of chemical recycling,” the government stated. The government also said that differing units of measurement may be used at different parts of the supply chain. For example, mass being used at polymer and packaging level, and a Lower Heating Value approach used at refinery level. The government further stated that accredited certification schemes will be necessary to audit and certify the mass balance volumes, and it intends to accredit multiple certification schemes. The government also signaled that while it is not currently making changes to medical exemptions under the tax at present it intends to remove this exemption once more chemically recycled plastic is available. “Producers and importers of medical packaging are encouraged to start considering how to include more recycled plastic in their packaging as chemical recycling capacity, feedstock levels, recyclate availability increase, and advancements in technology are developed,” it stated. There was no timeframe announced for when these changes would take place. Clarity on the UKs approach to mass balance will be welcomed by the market. Despite structural tightness of pyrolysis oil in Europe, buying interest in 2024 to date has been lower than that seen in 2023 largely due to ongoing legal uncertainty over approaches to mass balance accounting.  Legal uncertainty was one of the factors cited by Quantafuel in August for the cancellation of its 100,000 tonne/year pyrolysis-based chemical recycling project in Sunderland. On 16 July the British Plastics Federation (BPF) submitted a joint letter it had coordinated to the incoming Exchequer Secretary James Murray MP, calling for an urgent response to the previous government’s mass balance consultation. ICIS covers 3 grades of pyrolysis oil in its Mixed Plastic Waste and Pyrolysis Oil Europe pricing service . ICIS also offers mechanical recycling, waste bale, biodiesel, hydrogen, and virgin price coverage, giving you the complete picture across the sustainability value chain. For more information, please contact Mark Victory at mark.victory@icis.com.

30-Oct-2024

SINGAPORE (ICIS)–Sumitomo Chemical trimmed its fiscal H1 to September 2024 net loss to Japanese yen (Y) 6.5 billion ($42 million), aided by sales growth of about 5%, while it seeks to rationalize operations to boost profitability. Return to profit expected for year-to-March 2025 IT-related chemicals' fiscal H1 core operating profit more than doubles Chiba Works LDPE output to fall by 20,000 tonne/year in billion yen (Y) Apr-Sept 2024 Apr-Sept 2023 % change Yr-to-March 2025 (revised forecast) Yr-to-March 2024 (actual) Sales revenue     1,241.4     1,186.9             4.6 2,600.0 2,446.9 Core operating profit           29.5        -96.7 – 100.0 -149.0 Operating income         121.2      -133.7 – 180.0 -488.8 Net income           -6.5         -76.3 – -25.0 -311.8 Revenues for the period increased on higher selling prices of synthetic resins,  methyl methacrylate (MMA) and various industrial chemicals due to higher raw material prices, the company said in a statement. Sumitomo Chemical's Essential Chemicals & Plastics segment posted a lower core operating loss of Y36.7 billion, with sales up by 3.3% year on year to Y403 billion, it said. However, it noted that earnings were weighed down by a deterioration in the financial performance of its 37.5%-owned affiliate Saudi Arabia's Rabigh Refining and Petrochemical Co. Meanwhile, IT-related chemicals posted a 10% increase in sales to Y224.3 billion, with core operating income more than doubling to Y37.5 billion, on the back of strong demand for display-related materials and processing materials for semiconductors, it said. For the whole of fiscal year ending March 2025, Sumitomo Chemical lowered its sales forecast by Y70 billion to Y2.6 trillion, but raised its net profit forecast by Y5 billion to Y25 billion. The forecast marks a return to profitability for Sumitomo Chemicals, which incurred a Y312 billion net loss in the previous fiscal year. LDPE OUTPUT CUT BY END-MARCH 2025In a separate statement on 29 October, the company announced plans to reduce its low density polyethylene (LDPE) production at Chiba Works by 20,000 tonnes/year, citing declining domestic demand. Operations at a portion of the company’s LDPE facilities at the site will be suspended by March 2025 – the end of its current fiscal year. Sumitomo Chemical has an LDPE plant in Chiba prefecture with a 172,000 tonne/year capacity, according to ICIS Supply and Demand Database. “The company expects this measure, combined with the various rationalization efforts that it has implemented thus far, to lead to improving the overall operating rate of the remaining facilities,” Sumitomo Chemical said. Japan’s LDPE demand “is not anticipated to have significant future growth”, it said, citing a declining population and an ageing society with a low birth rate. Sumitomo Chemical said that it is “accelerating business restructuring as part of its short-term intensive performance improvement measures”. Other measures include improving the company’s product portfolio “to cater to high value-added areas”, as well as working on fixed cost reduction at its remaining facilities, including a joint study with Maruzen Petrochemical to optimize operations of their joint venture Keiyo Ethylene. The Japanese producer said that it “will steadily advance these measures to ensure a V-shaped recovery in fiscal 2024, while also carrying out fundamental structural reforms”. Focus article by Pearl Bantillo ($1 = Y153.3) (adds paragraphs 8-15 with recasts throughout)

30-Oct-2024

SINGAPORE (ICIS)–Sumitomo Chemical trimmed its fiscal first-half net loss to Japanese yen (Y) 6.5 billion, aided by about a 5% growth in sales, the Japan-based producer said on Wednesday. in billion yen (Y) Apr-Sept 2024 Apr-Sept 2023 % change Yr-to-March 2025 (revised forecast) Yr-to-March 2024 (actual) Sales revenue     1,241.4     1,186.9             4.6 2,600.0 2,446.9 Core operating profit           29.5        -96.7 – 100.0 -149.0 Operating income         121.2      -133.7 – 180.0 -488.8 Net income           -6.5         -76.3 – -25.0 -311.8 Revenues for the period increased on higher selling prices of synthetic resins, methyl methacrylate (MMA) and various industrial chemicals increased due to higher raw material prices, the company said in a statement. Its essential chemicals & plastics segment posted a lower core operating loss of Y36.7 billion, with sales up by 3.3% year on year to Y403 billion, it said. However, it noted that earnings were weighed down by a deterioration of financial performance by its 37.5%-owned affiliate Saudi Arabia's Rabigh Refining and Petrochemical Co. Meanwhile, IT-related chemicals posted a 10% increase in sales to Y224.3 billion, with core operating income more than doubling to Y37.5 billion, on the back of strong demand for display-related materials and processing materials for semiconductors, it said. For the whole of fiscal year ending March 2025, Sumitomo Chemical lowered its sales forecast by Y70 billion to Y2.6 trillion, but raised its net profit forecast by Y5 billion to Y25 billion. The forecasts mark a return to profitability for Sumitomo Chemicals, which had incurred a Y312 billion net loss in the previous fiscal year. ($1 = Y153.3)

30-Oct-2024

HOUSTON (ICIS)–Union dock workers and US East Coast port operators will resume negotiations on a new master agreement in November, according to a joint statement from both parties. The International Longshoremen’s Association (ILA), representing the dock workers, and the United States Maritime Alliance (USMX), which represents the ports, reached a tentative agreement on 3 October that ended a three-day strike. The strike was paused until 15 January after parties agreed on the salary portion of the agreement, essentially meeting in the middle. But the union remains adamant against any full or partial automation at ports that could threaten union jobs. The respective negotiating committees will meet in New Jersey, where they will look to agree on terms for a new contract that can be presented to the full ILA Wage Scale Committee for approval, and later, to ILA membership for ratification, the statement said. “The ILA and USMX welcome the opportunity to return to the bargaining table and get a new agreement in place as soon as possible,” the parties said. The two sides will not discuss details of negotiations with the media prior to these meetings. IMPACTS TO CHEM MARKETS The short strike had some impact on the US chemicals industry, with polyethylene (PE) exports to Brazil being put on hold in the lead up to the work stoppage. The polyvinyl chloride (PVC) industry was concerned as all US Gulf PVC exports move out of one of the impacted East Coast ports. In the polyethylene terephthalate (PET) market, imports of PET resins were diverted to the US West Coast in anticipation of the work stoppage. The dock workers do not handle liquid chemical tankers, as most terminals that handle liquid chemical tankers are privately owned and do not necessarily use union labor. Also, tankers do not require as much labor as container or dry cargo vessels, which must be loaded and unloaded with cranes and require labor for forklifts and trucks. But 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. Visit the ICIS Logistics – impact on chemicals and energy topic page Thumbnail image shows a container ship. Photo by Shutterstock

28-Oct-2024

HOUSTON (ICIS)–Agrimin Limited said their Mackay potash project in Western Australia is continuing to advance towards a final investment decision and that the development is now in the stage three assessment with the environmental regulators. The project is planned to be able to manufacture standard and granular sulphate of potash (SOP) products with its definitive feasibility study (DFS), completed in July 2020, showing that once in operation it could be the world’s lowest cost source of seaborne SOP. In a quarterly update on activities, the company said the timeline from the Western Australian Environmental Protection Authority is still expected to come in 2024, with supplementary government approval expected to follow in the first half of 2025. Agrimin said it is also progressing on the other secondary approvals and licenses necessary for the project with the Department of Energy, Mines, Industry Regulation and Safety and the Department of Water and Environmental Regulation. Regarding the final investment decision, the company said it is undertaking activities to reach that status including engineering efforts with advanced process testing and preparation for contractor involvement. It is also engaged in execution planning with a focus on critical path analysis and mitigation including earliest possible environmental surveys and baseline monitoring. Agrimin said it will also be working on funding for the project including potential strategic partnerships.

28-Oct-2024

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 25 October. Asia's naphtha market eyes demand uptick By Li Peng Seng 21-Oct-24 11:38 SINGAPORE (ICIS)–Asia's naphtha intermonth spread was near a two-month high recently and it may be able to hold firm in the near term on reduced arbitrage volumes in November and anticipated demand growth ahead. Energy transition plan reset needed with renewed focus on Asia – Aramco President By Jonathan Yee 21-Oct-24 14:22 SINGAPORE (ICIS)–Saudi Aramco chief Amin Nasser on Monday called for a new energy transition plan that considers the needs of all countries, specifically those in Asia and the broader Global South, amid growing oil demand. Asia ACN regional producers bullish on tighter supply; India’s BIS deadline nears By Corey Chew 22-Oct-24 11:07 SINGAPORE (ICIS)–Asia acrylonitrile (ACN) prices saw a recent uptrend the past two weeks, with plants of key regional producers in Taiwan and South Korea under planned maintenance. PODCAST: Macroeconomic pressure continues to weigh on Asia recycling sentiment By Damini Dabholkar 22-Oct-24 17:13 SINGAPORE (ICIS)–The short-term demand outlook for recycled polymers from Asia remains sluggish especially for low-value grades, mainly due to poor economics and brand users’ preference of cheaper virgin plastics. Emerging Asian economies’ strong growth to subside amid China slowdown – IMF By Nurluqman Suratman 23-Oct-24 12:07 SINGAPORE (ICIS)–Emerging Asian economies are expected to see strong economic growth subside, partly due to a sustained slowdown in China, the International Monetary Fund (IMF) said on Tuesday. PODCAST: Asia methanol impacted by geopolitical uncertainty, supply cuts expected in Q4 By Damini Dabholkar 24-Oct-24 23:00 SINGAPORE (ICIS)–Asian methanol markets in recent weeks were driven more by sentiment than changes in fundamentals as participants respond to an escalation of the conflict in the Middle East. However, some supply changes in coming months are expected to alter the landscape in Q1 2025. Supply glut casts shadow over Asia PC market recovery By Li Peng Seng 25-Oct-24 13:08 SINGAPORE (ICIS)–China's polycarbonates (PC) spot demand has remained sluggish as ample supplies have kept purchases on a need-to basis, and this trend will persist through yearend.

28-Oct-2024

LONDON (ICIS)–Senior editors Caroline Murray and Matt Tudball interviewed Marco Piscitelli, founder and CEO of International Gate, at the company’s customer event in Verona, Italy on 23 October to get his views some of the key topics impacting the European polyethylene terephthalate (PET) and recycled PET (R-PET) markets, including: ‘Theoretical’ global oversupply of PET and how freight, energy costs and economics all play a part in the market The importance of customers finding the right partners to navigate challenges in 2025 The ‘Recycling Revolution’ and the impact of the Single Use Plastics Directive (SUPD) The ‘chaos’ around the lack of legislative clarity facing the PET and R-PET markets in 2025 Suitability of single pellet solutions (SPS) for brands with high recycled content targets.

25-Oct-2024

SINGAPORE (ICIS)–Fossil fuels will still account for a huge portion of southeast Asia's energy mix, projected at 70% by the end of the decade, but carbon capture and storage (CCS) projects should help the region achieve its emissions goal. SE Asia not hitting renewable energy targets CCS deemed most cost-effective means to hit emission targets Subsidies key to promote CCS investments Currently, the region relies on coal, oil and gas for about 80% of its energy requirement amid strong economic growth, with the share of renewable energy low at less than a fifth of the total. Southeast Asia has only achieved 16% of renewable energy in its current energy mix, well below the 22% target by 2035, ASEAN Centre for Energy (ACE) deputy executive director Beni Suryadi at the recently concluded Asian Downstream Summit in Singapore. The Asian Downstream Summit on 23-24 October was held during the Singapore International Energy Week (SIEW) conference, which ends Friday. Economic development and geopolitical uncertainties have played roles in the region’s inability to achieve the targeted energy mix, he said. Southeast Asia is expected to become the world’s fourth largest regional economy in 2030, he said. Against this backdrop, CCS is expected help the region ensure energy security while helping it to become carbon neutral, Suryadi said. CCS will be the “most cost-efficient” support for energy security in the region, but the energy transition will need significant financial and technical support, said Pattabhi Raman Narayanan, advisor at engineering consultancy Becht Canada. Raman also stressed the importance of international cooperation in this undertaking. GOVERNMENT SUPPORT NEEDED FOR CCS PROJECTS The main challenges facing countries in southeast Asia in implementing CCS include cost of capture, cost of shipping and bankability. To encourage more investment in carbon capture technology, governments may be required to step in and offer subsidies, as is currently the case in Europe, said Neeraj Kumar, director of commercial chemicals and business development at Vopak Terminals Singapore, a unit of Dutch logistics firm Vopak. Infrastructure also needs to be built up, he added. “To begin any project, to have a long-term infrastructure … we do need a long-term commitment. We are talking about 15, 20 years of commitment to make that value chain sustainable, to pay for it,” Kumar said. “The government needs to step in and coordinate the first three people to make that jump (and invest in CCS).” Singapore has taken the first step. The city-state announced in March this year that it is partnering a consortium formed by global energy majors ExxonMobil and Shell to study the feasibility of a cross-border CCS project and start development by 2030. Indonesia’s state-owned energy company Pertamina is also working with ExxonMobil to advance an evaluation on a CCS hub as of May 2024, while its government has agreed with Singapore to collaborate on cross-border CCS. Meanwhile, Malaysia’s state-owned Petronas in June 2024 agreed to collaborate with Norway-based risk management firm DNV to develop CCS value chains across southeast Asia. Separately, the Paris-based International Energy Agency (IEA) said on 22 October that southeast Asia needs to increase its clean energy investments to $190 billion by 2035 to achieve its climate goals. Focus article by Jonathan Yee

25-Oct-2024

HOUSTON (ICIS)–US recycled plastics Senior Editor Emily Friedman and Americas recycled plastics Analyst Josh Dill, reflect on their experiences and key takeaways from the 2024 Paper and Plastics Recycling Conference held in Chicago, Illinois this week. Listen in as they dive into various topics regarding material recovery facilities (MRFs), extended producer responsibility (EPR), recycled content brand commitments, chemical recycling and more.

24-Oct-2024