Xylenes

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 19 July. Europe PX to face weaker downstream demand, support from higher freight costs The European paraxylene (PX) industry is heading towards the second half of the year sandwiched between the news of structural downstream production cuts and the temporary support from high freight rates from Asia, which is making domestic production of PX derivatives more appealing than imports. Ursula von der Leyen wins second term for top EU job, stresses need for EU competitiveness Ursula von der Leyen on Thursday secured her re-election to a second five-year term as President of the European Commission, and identified competitiveness as the most pressing issue facing the EU. Europe BDO demand recovery in 2024 unlikely, logistics disruptions in focus After the uptick in domestic consumption during H1 2024 compared to prior expectations, the European butanediol (BDO) market is expecting a return to lacklustre demand trends with trade flow challenges still a key factor in dynamics. Europe MX H2 demand remains mired in deep waters Demand for mixed xylenes (MX) in the European market was subdued in the first half of the year, with the outlook remaining bearish for the rest of 2024. Europe shows shoots of recovery as market bottoms out – IMF Strong service sector performance and robust exports through 2024 amid cooling inflation points to the eurozone economy bottoming out following the emergence of tentative green shoots during the first quarter of the year, the IMF said. Freight chaos, trade dispute could support EU epoxy in H2, rebound unlikely Deep-sea freight and logistical challenges, along with the EU antidumping probe on several Asian epoxy imports could trigger shifts in favour of local sourcing in the second half of the year, although optimism remains low regarding any recovery in a still difficult climate.

22-Jul-2024

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

Seeks optimization opportunities Saudi Aramco also said interested in Tellurian Woodside has busy development plans SINGAPORE (ICIS)–Australian producer Woodside Energy said it would buy all outstanding shares of US LNG developer Tellurian and Driftwood LNG for approximately $900 million at $1.00 per share in an all-cash deal for a transaction valued at $1.2 billion, according to a 22 July news release . “It adds a scalable US LNG development opportunity to our existing approximately 10mtpa of equity LNG in Australia. Having a complementary US position would allow us to better serve customers globally and capture further marketing optimisation opportunities across both the Atlantic and Pacific Basins,” Woodside CEO Meg O’Neill said in the release. “The Driftwood LNG development opportunity is competitively advantaged. Woodside expects to leverage its global LNG expertise to unlock this fully permitted development and expand our relationship with Bechtel, which is the EPC contractor for both Driftwood LNG and our Pluto Train 2 project in Australia.” Tellurian’s board recommended shareholders approve the transaction and provided further details in a news release. As reported, ICIS noted that Tellurian was in play in late June, and  Woodside was said to be vying with Saudi Aramco for the project. Tellurian has struggled for years with the proposed 27.6mtpa Driftwood project, going through management and financial changes that included cancellation of LNG supply deals. But Driftwood, near Lake Charles, Louisiana, is a fully permitted, pre-final investment decision (FID) prospect, that includes Phase 1 (11mtpa) and Phase 2 (5.5mtpa). Woodside is likely targeting FID readiness for Phase 1 from the first quarter of 2025. O'Neill repeated to an investor briefing on 22 July that the transaction positions Woodside to be a "global LNG powerhouse". The company aims to use a mix of offtake from Driftwood into its own marketing portfolio and retain tolling volumes while it works on selecting "high-quality partners" to scale up initial operations and eventually sell down its stake to around 50%, O'Neill told investors on a call. Sources said Saudi Aramco could be among possible investors. Woodside reports second quarter earnings on 23 July. BUSY WOODSIDE Last week, Woodside said that talks with Timor Leste (East Timor) on developing a “mutually beneficial and commercially viable “Greater Sunrise field has made progress with finer details to be unveiled in a concept Study being undertaken by Wood PL due “no later than the fourth quarter of this year.” The Democratic Republic of Timor-Leste and the Commonwealth of Australia, along with the Sunrise Joint Venture (comprising TimorGAP (56.56%), Woodside (33.44% and Operator), and Osaka Gas (10%)) are pleased to provide an update on Greater Sunrise negotiations. Offshore natural gas and condensate resources were first discovered in 1974, and located near a feed gas source to Australia at Bayu-Undan, which faces declining supply. Yet, the fields remain undeveloped as the stakeholders differ on the fiscal terms and the location of the downstream operations. According to a report released in May 2018 by the Permanent Court of Arbitration, the pipeline from the fields would either go to the existing 3.7mtpa Darwin LNG export project in Australia or to a greenfield 5mtpa Timor LNG project at Beaco on the south coast of Timor-Leste. The failure in reaching an agreement ended up having global portfolio major Shell and US supplier ConocoPhillips selling their shares to Timor Gas & Petroleo (Timor Gap) in late 2018. Timor Gap senior officials have expressed their determination regarding getting gas pumped to their island as it is “essential to Timor-Leste’s future economic growth and development”. In June, Woodside announced a revised leadership structure aiming for a simplified operating model to aggregate project execution, integrate traditional and new energy growth and opportunity, streamline corporate strategy activities, and establish a dedicated senior team for human resources, legal and external affairs. In May, the Japan Bank for International Cooperation (JBIC) signed a $1 billion loan agreement with a unit of Woodside that along with loans from private financial institutions raises $1.45 billion to assist Woodside in developing the Scarborough Energy Project , according to a statement from JBIC. The 8mtpa Scarborough energy project has targeted the first LNG cargo in 2026, according to Woodside. (Adds further O'Neill comments)

22-Jul-2024

SAO PAULO (ICIS)–Brazil’s annual rate of inflation rose over the 4% mark in June as the Brazilian real depreciated and prices for food and health services rose strongly, the country’s statistics office IBGE said on Wednesday. Brazil’s annual National Consumer Price Index (IPCA in its Portuguese acronym) rose in June to 4.23%, up from May’s 3.93%. In May, inflation had already risen partly after severe flooding in Rio Grande do Sul caused generalized food price rises in the southernmost state. Financial analysts had already warned in May than higher-than-expected price rises could prompt the central bank to halt interest rates cuts for the rest of 2024, hoping to contain the latest upticks in inflation. On Wednesday, June further uptick prompted some of them to suggest there were growing chances there would not be any cuts to interest rates until 2026. THREE MONTHS ON THE MARCHAs well as the increase in the annual rate of inflation to 4.23%, the IPCA also rose month on month, with monthly inflation at 0.21%, down from May’s 0.46%. Prices for food consumed at home rose by 0.47% in June, compared with May, and prices for health service rose by 0.54%. Transportation prices fell 0.19% in June, month on month, airfares posting the sharpest drop, down 9.88%. Fuel prices had mixed changes, with gasoline and ethanol prices rising, while diesel and vehicle gas prices fell. Gray columns: forecast Source: IBGE via Trading Economics At the beginning of 2024, there were expectations that inflation would seasonally rise in the second half of the year, but the increases have materialized sooner and stronger than expected. Petrochemicals-intensive manufacturing companies insist high interest rates continue to be a drag in their sales, as consumers shy away from big ticket purchases of durable goods, posting them until borrowing costs come down. RATES AT 10.5% UNTIL 2026?On Wednesday, financial analysts, most of whom were assuming the central bank would resume its monetary policy easing in early 2025 once the latest upticks in inflation had been contained, have now turned more pessimist. UK-headquartered Capital Economics said it was “hard to see any scope” for cuts to the Selic, the main benchmark, in 2024 but added there was even a “growing risk” there will not be cuts in 2025 either. In June, the central bank’s monetary policy committee (Copom) decided to keep the Selic unchanged at 10.5% after several cuts in a few months since August 2023, when it peaked at 13.75%. SELIC Source: Banco Central do Brazil via Trading Economics In June, investors’ weariness about President Luiz Inacio Lula da Silva intentions to increase public spending, potentially widening the fiscal deficit, spooked currency traders and the real (R) depreciating over the month. It reached a low on 2 July at $1/R5.70, although it has recovered since to around $1/R5.41 on Wednesday afternoon. The current fiscal deficit – and the prospect of it widening – was not helped by public spats, first, between members of Lula’s coalition cabinet nor by the President’s remarks criticizing the central bank and its president, quite outside the norm not to interfere with the institution’s independence. In the end, Lula’s comments and his ministers’ public disagreements on fiscal targets may have caused the cabinet’s main wish – lowering rates to increase consumption and jobs in manufacturing – caused the exact opposite effect. “The recent weakness in the real and mounting fiscal concerns means that there is no chance that Copom will restart its easing cycle at its meeting later this month. Rates are likely to be left unchanged throughout this year and there is a growing risk of no cuts next year either,” said analysts at Capital Economics. “Of some comfort to Copom will be that the strength in core services inflation in May unwound … And more to the point, higher headline inflation will compound concerns at the central bank, particularly given the worsening fiscal position and recent fall in the real.” REAL VERSUS DOLLAR Source: Trading Economics  Earlier in the week, before June inflation figures came out, economists surveyed by the central bank every week had already turned pessimistic as well about inflation falls slowing down and cuts being cut less than previously expected. However, they do still expect cuts in 2025 – on average, they expect the Selic to close 2025 at 9.50%, although that was an increase from their expectations a month ago. They now also expect inflation to end up higher both years – at 4.02% in 2024 and 3.88% in 2025. Expectations for GDP growth remain practically unchanged at 2.10% for 2024 and 1.97% for 2025. Expectations for the dollar/real exchange rate also remain practically unchanged, with the economists surveyed by the central bank expecting the real to close 2024 and 2025 at $1/R5.20. BRAZIL GDP Quarter on quarter Source: IBGE via Trading Economic  Focus article by Jonathan Lopez

10-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

UPDATED: On 27 June 2024, ICIS updated this analysis to include a review of the impact that manifesto pledges could have on UK power prices On 24 June 2024, ICIS updated this analysis to include a review of the renewable capacity pledges from manifestos and their likelihood of being met On 21 June 2024, ICIS updated this analysis to include a breakdown of the impact of new gas licenses on British gas supply On 20 June 2024, ICIS updated this analysis to include the Scottish National Party's manifesto plans for energy. The manifesto table now includes these details Initial analysis published with detailed table reviewing energy policies from announced manifesto pledges, original analyses covering nuclear power and gas-fired power generation, a UK election special episode of the ICIS Hydrogen Insights podcast LONDON (ICIS) — On 4 July 2024 the UK public will elect a new government, but what do the different parties have in store for energy? The following analysis reflect core pledges from manifestos and reviews those pledges in detail using ICIS data and insights. This analysis of UK political pledges and announcements will be continuously updated by the ICIS energy editorial team. Lead authors include: UK power reporter Anna Coulson, British gas reporter Matthew Farmer. UK ELECTION PLEDGES UNLIKELY TO IMPACT POWER PRICES UK power prices out to 2030 could remain relatively unchanged regardless of which party wins the UK election ICIS analytics forecasts UK power prices to range between £46-85/MWh in 2030 LONDON (ICIS)–UK power prices could remain relatively unchanged to 2030 regardless of which political party wins in the UK’s general election on 4 July, ICIS analysis shows. The development of the power market and new capacity faces continued hurdles, despite numerous parties intending to rein in energy prices according to their manifestos. An analysis of the Conservative, Labour, Liberal Democrat, Green Party, Reform UK, Scottish National Party (SNP) and Plaid Cymru manifestos shows that all parties present different policies aimed at helping manage energy bills. Some policies presented by the main parties suggest direct consumer initiatives, such as Labour’s plan to issue grants and loans for insulation, or the Green Party policy pledge to develop an insulation scheme, or the SNP’s financial relief for consumers in the Highlands and Islands of Scotland. However, some policies seek to address the wholesale power market through measures such as new licenses for gas-fired power generation or the build-out of renewable capacity. Renewables, volatility and risk Broadly speaking, energy policies proposed by UK parties present three different paths. Firstly, there are policies focused primarily on expanding renewable capacity as ageing gas-fired and nuclear power plants are decommissioned. Such policies would lead to periods of lower power prices, but balancing this would drive more volatility across short-term power prices. This pathway is most closely resembled by the Green Party, which has ambitious targets for renewable deployment by 2035. As the party plans to phase out existing nuclear power and stop the development of new plants, this would increase price volatility as nuclear would no longer operate as a baseload source of generation. The Green Party’s manifesto did not specify a timeline for the nuclear plans; therefore, it is difficult to determine when this could affect UK power prices. However, the party states it would rapidly expand energy storage capacity, which would balance renewable energy intermittency, although more detailed plans are not specified in the party’s manifesto. The SNP also intends to develop renewable energy, outlining “significant growth” in renewables alongside expansion in storage for energy. The Liberal Democrats also lean towards renewable development but present a decentralized approach when considering solar. The party would seek to build solar panels on new homes, therefore reducing power demand for residential offtake. A more central approach can be seen from both the Conservative and Labour parties, which both present clear plans for renewable growth, but also consider building new nuclear capacity or, in the case of Labour, also extending the life of the existing nuclear fleet. Furthermore, the Labour party intends to maintain a strategic reserve of gas-fired power plant which could limit price volatility but would result in higher power prices linked to natural gas prices. The Conservatives plan to build new gas power stations which would also reduce price volatility but would create an even stronger link to gas prices. However, the party’s manifesto did not state how much capacity would be added and when, therefore it is hard to determine when this could impact prices. Finally, the third pathway is presented by Reform UK, which presents plans to fast-track small-modular reactor (SMR) build out for nuclear capacity while reviewing the potential for tidal power, both baseload generation-supporting activities. Further, with the party’s intention to explore new UK gas field licenses, gas-fired power supply could remain in the mix into the future. ICIS analyst view Despite multiple power market pledges, the potential for manifesto points to translate into price movements appears limited, according to ICIS analyst Robbie Jackson-Stroud. Jackson-Stroud notes that the development and construction of new capacity, such as gas-fired power plants, requires time to agree upon at a policy level, plan and then construction. Adding to this, “cost constraints in the current climate are the driver of investment in renewable capacity, and a change of party does not shift that,” he added. Regardless of the party to come out as winner of the 4 July elections, there may simply not be enough time to deploy new capacity for wholesale power prices to ease, be that renewables or fossil-fuel based generation. Considering the challenges facing parties in delivering power-market change ahead of 2030, it is unlikely that they would present notable shifts to forecasted power prices before the next decade. ICIS long-term power data indicates that in 2030, depending on the development of the carbon price, UK power prices are expected to range between £46-85/MWh. In comparison, ICIS price assessments show that the UK power front-month baseload price averaged £66.62/MWh between January to June this year, which is £49.34/MWh lower than the same period last year. The drop in price is due to more stable market conditions this year in the UK and on the continent. UK PARTIES COULD STRUGGLE TO MEET RENEWABLE CAPACITY ELECTION PLEDGES – Added to analysis 24 June 2024 UK parties unlikely to meet capacity targets Key to onshore wind would be change to regulation Offshore wind could struggle following recent CfD round LONDON (ICIS)–For the UK general election, Labour, the Conservatives and the Green Party are the only three of the main parties to present outright capacity targets for renewable energy deployment across their manifestos. However, ICIS data and analyst insight suggests that meeting such targets could face difficulties due to recent setbacks in the UK’s Contracts for Difference (CfD) bidding process and restrictive regulation for onshore wind. The Labour party manifesto states it will double onshore wind, triple solar power, and quadruple offshore wind by 2030. To present an idea of this, ICIS has multiplied its forecasted capacity for these technologies in the UK by the end of 2024 by their respective factors according to Labour’s pledges. Actual intended capacity may vary. ICIS had contacted the Labour party for comment but received no response by the time of publication. Onshore wind Labour plans to double onshore wind capacity by 2030, while the Green Party would deploy 53GW of capacity by 2035. The Liberal Democrats would ‘remove the Conservative’s unnecessary restrictions on new wind power’, likely referring to the requirements the current government introduced in 2015 and changes to the law in 2016. Planning policies were updated in September 2023 to allow locations suitable for new wind farms to be identified in several ways, rather than only in the area’s development plan. However, decisions continue to be made by local planning authorities which differs to the process for other infrastructure projects where decisions on major projects are made by the Secretary of State. The current government does not have an onshore wind capacity target and the Conservative’s manifesto has no mention of one however, it does state that the party will ensure democratic consent for onshore wind. ICIS analytics forecasts 25.85GW of onshore wind capacity in 2030 and in 2035, under a base case scenario, which is below Labour and the Green Party’s targets. ICIS analyst, Robbie Jackson-Stroud, stated that planning permission is one of the main challenges onshore wind projects face. “Costs for turbines have also risen and so they are then squeezed into a CfD funding pot where they have to compete with solar”, he added. Jackson-Stroud noted that onshore wind could be a key component to the development of renewable capacity in the UK, changes to regulation permitting. “One aspect that is likely to change is regulation and approval of onshore wind projects, which require less budget and time to build. However, it is difficult to envisage a new government being timely enough to sufficiently improve the approval process and have enough projects apply to shift onshore capacity before 2030. It should be noted, however, how much potential a change to regulation would have to long term capacities, and you can expect more capacity in the 2030s”, Jackson-Stroud said. Offshore wind The Conservatives, Labour and the Green party all position offshore wind as a key technology to support the decarbonization of the UK’s power system. However, achieving such targets appears difficult following an unsuccessful fifth auction of the CfD scheme in 2023, in which there were no bids for offshore wind amid a low strike price. The current government increased the strike price for the upcoming sixth auction round, raising the maximum strike price from £44/MWh to £73/MWh. Jackson-Stroud highlighted the difficulty facing the next wave of auctions when considering 2030 targets. “Both parties [Labour and the Conservatives] have pledged unachievable targets without a huge budget increase for the CfD. Taking into account the time it takes to build offshore wind sites (that are getting increasingly larger on average) there are only two CfD auctions at most that can fund capacity to come online by 2030. “There is roughly 27GW of offshore wind already under CfD, under construction or operational, suggesting the need for a further 23GW across two auctions, which would be a record at a time where costs are higher than they have ever been. While the budget for the latest round has been raised to an all-time high of £800m for offshore and £1.2bn total, this would still procure only 12GW of wind in even the most conservative estimates. "This means regardless of Labour increasing 2030 targets for offshore, even the 50GW already in place will not be met, and a change of party doesn’t change the blockers to this," Jackson-Stroud said. ICIS analytics forecasts that offshore wind capacity will be 39GW in 2030 under a base case scenario, therefore falling short of the Conservative and Labour party targets. Similarly, offshore wind capacity is forecast to be 48.04GW in 2035 under a base case scenario, well below the Green Party’s target. Solar Labour plan to triple solar capacity by 2030, while the Green Party and Conservatives have set targets for 2035, 100GW and 70GW respectively based on manifesto and recent policy announcements. However, reaching such targets may prove challenging based on recent CfD results. ICIS analyst Matthew Jones previously noted that for the UK to meet its 70GW by 2035 target, CfD capacity awards would need to average 4.5GW/year. However, over the last two CfD rounds, just 2.2GW was awarded in each. Further, ICIS analytics forecasts 42.97GW of solar capacity by 2030, and 48.54GW by 2035, under a base case scenario, therefore missing the Labour, Conservative and Green Party targets. Since the closure of the renewable obligation and feed-in tariff schemes, the CfD scheme is the only subsidized route to market for solar. The forecast models cited in this story are available as part of ICIS Power Foresight. If you would like to learn more about ICIS Power Foresight, please contact head of power analytics Matthew Jones at Matthew.Jones@icis.com UKCS LICENSING – Added to analysis 21 June 2024 Several parties have committed to end the issuing of new licenses for extraction of oil and gas on the UK continental shelf (UKCS), however ICIS analysis shows the inclusion of new licenses may have a minimal impact in mitigating output decline. Gas production on the UKCS started declining in 2000, but held steady during the 2010s. It currently accounts for approximately 40% of Britain’s gas supply mix, with the bulk of remaining volumes coming through Norwegian imports and LNG. From the late 2020s, UKCS production is expected to decline by approximately 6% per year. Licenses on new discoveries would not reverse the decline in British production expected in coming years. However, they would have accounted for another 0.80 billion cubic meters (bcm) of British gas production in 2030, increasing to 1.5bcm in 2035. In contrast to the other parties, the Conservatives and Reform UK have committed to annual licensing rounds and “fast-track” licenses, respectively. Both have done so with a justification of maintaining British energy independence, citing the rising price of energy caused by the full-scale Russian invasion of Ukraine. GAS-FIRED POWER DEMAND LIKELY UNMOVED Both the Conservatives and the Labour party show support for the continued use of gas for power generation, bolstering a key area of demand for British gas market participants. However, of the two parties, the Conservatives presented a more bullish mentality by noting intensions for new gas plants, aligning with previous announcements to support new capacity. Labour meanwhile take a muted approach, noting the need for a strategic reserve of gas for power generation. Both Labour and the Conservatives have therefore presented policy that could reduce power-market price volatility as renewable capacity grows, with gas offering baseload generation at periods of low renewable output. Gas demand for power to remain From a gas-market perspective, the use of gas for power amounts to a large share of overall demand. In 2023, gas offtake for power accounted for 26% of total gas demand. The UK is heavily reliant on gas-fired power generation, with it contributing 26% of the UK’s electricity mix in the period 1 January to 31 May 2024, according to data from National Grid. Similarly, gas-fired generation provided an average 36.3% of the mix over the 2019-23 period, therefore making a significant contribution to the UK’s electricity stack. While the capacity of new gas generation is not mentioned in the Conservative party’s manifesto, ICIS analytics forecast data indicates that gas capacity is set to increase through to 2026, under a base case scenario. This would suggest that offtake for power generation could well remain a key share of overall gas demand under either a Conversative or a Labour government. Further, ICIS data shows that there will be 7.92GW of gas capacity in 2050 under a base case scenario, which itself raises uncertainty around the prospect of pledges to decarbonize power grids by around the 2030s. NUCLEAR Nuclear power represented a large focus for the Labour, Conservative and Reform UK parties, which each announced plans to increase nuclear capacity through a mix of measures, such as plant life extensions, new large-scale projects, or Small Modular Reactors (SMRs). Despite this, the overall pledges presented for the election suggests need for further capacity build-out in the run up to 2050 in order to meet the government's target. While the Conservative’s manifesto did not mention a specific nuclear capacity target, the current government has a target to reach 24GW of nuclear capacity by 2050. ICIS analytics forecasts that, under a base case scenario, nuclear capacity will be 12.76GW by 2050. Plant life extensions Although Labour’s manifesto did not provide details on which nuclear plants it intended to focus on for life extensions, or for how long, the intension is in line with former market announcements from EDF, which stated plans in January 2024 to extend the lives of five UK nuclear plants. EDF plans to invest an additional £1.3bn in these power stations over 2024-26, with the aim to maintain output from the four advanced gas-cooled reactors (AGR) for as long as possible, and for the Sizewell B plant to operate for an additional 20 years. The lifetimes of the four AGR stations would be reviewed by the end of 2024. New capacity From a new capacity perspective Labour pledged to get the 3.2GW Hinkley Point C project over the line and that new nuclear power stations, such as the 3.2GW Sizewell C project, will play a key role in helping the UK to achieve energy security and clean power. In January, the Conservatives announced plans for a new large-scale nuclear power plant, which would be as large as Hinkley Point C or Sizewell C, which are both 3.2GW in capacity. The current government announced in May that Wylfa would be the preferred site for this new plant however, a commissioning date is still to be confirmed. This aligns with the party’s manifesto pledge to deliver a new gigawatt power plant at the same location. The new plant in Wales could well boost UK nuclear capacity, but it would still present a capacity gap between the current ICIS forecast for 2050 and the government’s target of 24GW. Small modular reactors Labour, the Conservatives, and Reform UK all mention SMRs in their manifestos however, the Conservatives will approve two new fleets of SMRs within the first 100 days of the next parliament. This is likely through the competitive process that Great British Nuclear (GBN) launched in 2023 to select SMR technologies best placed to be operational by the mid-2030s. GBN plans to announce successful bidders for the competition by the end of 2024 and to take two SMR projects to a final investment decision by 2029. However, it must be noted that SMRs are a new technology, and none are commissioned yet in Europe.    HYDROGEN In this UK general election special, ICIS hydrogen editor speaks with Rob Dale, founder and director of UK consultancy Beyond2050, which aims at supporting market participants in achieving their energy and sustainability goals. Over the course of the episode, Jake and Rob review which parties have committed to hydrogen for the election and what makes this election the biggest for hydrogen so far.

02-Jul-2024

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended Friday 28 July. Soft MA demand pressures prices lower, Red Sea tensions cap supply European maleic anhydride (MA) spot prices have softened as availability improved while poor demand slowed orders for July deliveries. Europe capro supply could be more balanced in July Following the severe shortages the European caprolactam (capro) market has struggled with over the past few months, supply is expected to be more balanced with demand in July. Europe orthoxylene sentiment for July stable-to-soft as feedstock costs show a mixed trend Europe orthoxylene (OX) contract price discussions for July are due to start next week amid persistently weak demand and mixed feedstock xylenes movements. Covestro to save €400m/year by 2028 through focus on digitalization, AI Covestro will save €400 million annually in material and personnel costs by the end of 2028 through a transformation programme focused on digitalization and artificial intelligence, it said on Tuesday. ADNOC and Covestro in concrete negotiations following €11.7bn offer Covestro and ADNOC have begun concrete negotiations on a possible investment by the Abu Dhabi oil company that would value the German chemical producer’s equity at €11.7bn, Covestro said on Monday.

01-Jul-2024

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 28 June 2024. Asia melamine sees uptick on tighter supply; demand recovery uncertain By Joy Foo 28-Jun-24 12:54 SINGAPORE (ICIS)–Asia’s melamine spot market for China-origin product faced some pressure from early June due to lagging demand. China MEG market supported by limited import arrivals By Cindy Qiu 26-Jun-24 12:20 SINGAPORE (ICIS)–China’s monoethylene glycol (MEG) prices rose after falling in June, reflecting supply-demand dynamics, but the price growth may be capped by increasing domestic supply and curtailed downstream polyester production, despite limited import arrivals expected in July. India’s BPA import price surges; freight continues to exert pressure By Li Peng Seng 24-Jun-24 11:53 SINGAPORE (ICIS)–India’s bisphenol A (BPA) average import price hit its highest level in nearly 20 months recently due to firm ocean freight rates, a phenomenon that is expected to persist in the short term as vessel space is likely to stay tight. PODCAST: Asia base oils supply, demand to gradually rise in H2 By Damini Dabholkar 26-Jun-24 18:13 SINGAPORE (ICIS)–Asia’s base oils supply is expected to improve slightly in H2 2024, while a seasonal peak in overall demand is due to kick off in the later part of Q3. INSIGHT: Asia isocyanates H1 performance mixed, poor expectations for Q3 By Shannen Ng 26-Jun-24 14:30 SINGAPORE (ICIS)–Demand in Asia’s import markets for polymeric methylene diphenyl diisocyanate (PMDI) and toluene diisocyanate (TDI) is likely to remain limited in the upcoming summer months of July and August, and the outlook for late Q3 is uncertain. Chemanol to supply methanol to Saudi Amiral project over 20 years By Pearl Bantillo 25-Jun-24 12:52 SINGAPORE (ICIS)–Saudi Arabia's Methanol Chemicals Co (Chemanol) has signed a 20-year deal to supply methanol to the Amiral petrochemical project of Saudi Aramco Total Refining and Petrochemical Co (SATORP).

01-Jul-2024

SINGAPORE (ICIS)–Saudi Arabia's Methanol Chemicals Co (Chemanol) has signed a 20-year deal to supply methanol to the Amiral petrochemical project of Saudi Aramco Total Refining and Petrochemical Co (SATORP). Under the agreement, Chemanol will supply 100,000 tonnes of methanol to SATORP on an annual basis when the complex starts up in three years' time, Chemanol said in a filing on the Saudi Stock Exchange. “The commercial operation [of Amiral complex] and supply [of methanol] are planned to start by the end of 2027,” Chemanol said. It added that "the financial impact of this agreement is currently indeterminable due to the changes in market conditions and product prices at the time of starting to supply the methanol". SATORP, a joint venture between energy giant Saudi Aramco and French TotalEnergies, is expanding operations via building the $11bn Amiral complex in Jubail. The complex is expected to have a mixed-feed cracker and utilities, with a nameplate capacity of 1.65m tonnes/year of ethylene and related industrial gases. Engineering, procurement, and construction (EPC) contracts for the Amiral project were awarded in June 2023 to South Korea’s Hyundai Engineering & Construction. Aramco owns 62.5% of SATORP, while TotalEnergies holds the remaining stake of 37.5%. The companies made a final investment decision on Amiral in December 2022, to enable SATORP’s Jubail refinery to advance Aramco’s liquids-to-chemicals strategy. Amiral will enable SATORP to convert internally produced refinery off-gases and naphtha, as well as ethane and natural gasoline supplied by Aramco, into higher value chemicals. Thumbnail image: At a port in Jeddah, Saudi Arabia, 15 May 2023. (Ute Grabowsky/imageBROKER/Shutterstock)

25-Jun-2024

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 22 June 2024. Malaysia May chemical exports rise 0.8% as overall trade continues recovery By Nurluqman Suratman 21-Jun-24 13:47 SINGAPORE (ICIS)–Malaysia's exports of chemicals and chemical products rose by 0.8% year on year to ringgit (M$) 6.31 billion in May amid signs that its overall trade weakness has bottomed out. Asia ACN sees continuation of tight supply, weak demand By Corey Chew 20-Jun-24 11:52 SINGAPORE (ICIS)–The acrylonitrile (ACN) market recently saw a slight decrease in price for both the northeast Asia and India markets. Thai bio-ethylene plant key to growing SCG Chemicals' green plastics portfolio By Nurluqman Suratman 19-Jun-24 13:15 SINGAPORE (ICIS)–Thailand's SCG Chemicals (SCGC) has obtained government approval for its 200,000 tonne/year joint venture bio-ethylene plant in Map Ta Phut, paving the way for the company to reach its target of producing 1m tonnes/year of green polymers by 2030. INSIGHT: Mixed outlook for Asia chemical prices in June – ICIS analysts By Lina Xu 18-Jun-24 12:00 SINGAPORE (ICIS)–There is a mixed outlook for petrochemical prices in Asia in June. Upward support comes from unplanned shutdowns and policy implications. Downward pressure is largely results from seasonal factors. INSIGHT: Asia petrochemical markets grapple with surging shipping costs By Nurluqman Suratman 14-Jun-24 13:54 SINGAPORE (ICIS)–Spot prices of most petrochemicals in Asia have spiked on the back of surging freight and container costs, as logistics challenges which continue to dampen global commodities trades coincide with a seasonal uptick in demand. PODCAST: Propane import growth to remain strong despite bottled LPG replacement By Lillian Ren 20-Jun-24 12:08 SINGAPORE (ICIS)–China's propane import growth is expected to remain strong this year although local authorities have been encouraging food catering and residential end-users to switch from bottled liquefied petroleum gas (LPG) to piped natural gas (PNG).

24-Jun-2024