LONDON (ICIS)–Senior editor for recycling Matt Tudball discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: Colourless (C), blue flake ranges narrow in eastern Europe Contradictory C bale prices heard in parts of the east as well Wider R-PET market still impacted by summer holiday slowdown

LONDON (ICIS)–An unexpectedly active August for European polyethylene (PE) and polypropylene (PP) was rounded off by surprising news of an unexploded WW2 bomb and more details of which LyondellBasell sites might be sold or rationalised. Senior editors Vicky Ellis, Ben Lake and Samantha Wright look at what else made August unusual, and look ahead to September in this latest podcast on Europe, Africa and Turkey markets. Articles they refer to include: Joe Chang’s Insight article, A new kind of low-carbon PE, PP is coming in 2025, and low density polyethylene (LDPE), linear low density polyethylene (LLDPE) and PP multi-month spot price highs.

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson. Chemical companies, as my ICIS colleague Kevin Swift and I write in today’s blog, need “to write their own story”. This can only come from a much more rigorous approach to scenario planning from the C-Suite level down that needs to then permeate to every decision at every level of an organisation, from long-term investment planning right down to even month-by-month pricing and production- volume decisions. And key to building proper scenarios, now that the Chemicals Supercycle, is understanding demographics as demographics are chemicals demand destiny. Chemicals demand is of course the number of people multiplied by per capita consumption. Because of the increasing uncertainty about the rate at which most of the world’s population is going to age and shrink, one set of scenarios on future population levels makes no sense at all. Front and centre of the global demographics crisis is China given that in 2024, ICIS expects China to drive 40% of the world’s polymers demand from just 18% of the global population. There is a huge variance in estimates of China’s population decline that you simply must factor in. For example, China’s population may decline to 767 million by 2100 or just 373 million! Kevin’s scenario modelling on China’s demographics and its polymers demand is an important starting point for your boardroom discussions: Under the ICIS Base Case, major resins demand rises from 103.1 million tonnes in 2020 and starts to mature in the 2030s, reaching 188.6 million tonnes in 2050. After 2050, a falling population and evolving market/economic dynamics adversely affect demand, which falls to 89.3 million tonnes in 2100. This is a level consistent with pre-2020 demand. With a more pessimistic outlook on population and reduced economic dynamism under the Dire Demographics scenario, major resins demand rises from 103.1 million tonnes in 2020 and starts to mature in the 2030s, reaching 116.2 million tonnes in 2050. With a falling population and adverse economic dynamics, demand falls to 38.7 million tonnes in 2100, a level consistent with pre-2010 demand. Equally important is consideration of what these demand outcomes could mean for China’s polymers trade flows: The Base Case suggests China remains a net importer of major resins, but its net import position falls from 27.4 million tonnes in 2020 to 4.7 million tonnes in 2050. We only focus on the period to 2050. Under the Dire Demographics scenario, production is more than sufficient and by early-2030s China attains self-sufficiency in these resins and emerges as a net exporter of 3.6 million tonnes in 2035, 7.1 million tonnes in 2040, 9.7 million tonnes in 2045 and 11.6 million tonnes in 2050. Please write your own story by conducting the right kind of planning for a far more nuanced and uncertain chemicals world. Editor’s note: This blog post is an opinion piece. The views expressed are those of the author, and do not necessarily represent those of ICIS.

SINGAPORE (ICIS)–Saudi Arabian producer Methanol Chemicals Co’s (Chemanol) specialty chemicals subsidiary Madarat Al-Dhara Chemicals Co has signed an agreement to secure a long-term supply of ethylene oxide (EO) from Sadara Chemical Company. The EO supply is intended for Madarat Al-Dhara’s methyl diethanolamine (MDEA) and choline chloride projects, Chemanol said in a filing to the Saudi bourse, Tadawul, on 29 August. Details on cost and volume of the EO supply deal were not disclosed. “Chemanol aims to become one of the largest producers of specialty petrochemicals in the region given that all targeted products would be the first of their kind in the region,” the company said. Financial and capacity details of the MDEA and chlorine chloride projects were not disclosed. “Such products would be used in many vital and strategic industries such as oil and gas Industry, nutrition additives industry, extraction of environmental harmful gases, carbon capture and storage technologies and others.” MDEA is crucial for gas purification, while choline chloride plays roles in animal nutrition, chemical processes, and industrial applications. In May, Chemanol completed its Saudi riyal (SR) 80 million ($21 million) acquisition of an 80% stake in Global Company for Chemical Industries (GCI), a specialty and fine chemicals manufacturer. The company is aiming to expand its specialty chemicals market share and diversify its product offerings.

SAO PAULO (ICIS)–Argentina’s petrochemicals players are in a wait-and-see mode about the effects a cut to import tariffs announced this week could have in the market and whether it will lower prices which, for many materials, remain higher than global prices. Earlier this week, the Argentinian cabinet said it would cut the so-called PAIS tax from 17.5% to 7.5% from 2 September. Introduced in 2012, the PAIS acronym responds to the name Tax for an Inclusive and Solidary Argentina (Impuesto Para una Argentina Inclusiva y Solidaria) and was presented by the at the time left-leaning administration as a tax on purchases of foreign currency. In practice, given that most imports are priced in dollars, the tax ended being practically an import tariff and contributed to Argentina becoming one of the most closed economies to trade in the world. President Javier Milei, in office since December 2023, has promised to turn the system upside down and make the Argentinian economy a bastion of liberalism. The cabinet’s intention is to end import tariffs altogether. The minister for the economy, Luis Caputo, has been quoted in the Argentinian press as saying the country should be “moving forward in the elimination of all export duties, a perverse tax that we do not like and hinders” Argentina’s economic progress. PETROCHEMICALS MUST WAITThis week, sources in Argentina, who have been reporting higher prices for several materials compared to the rest of the world for months, were sceptical of any quick effect from the cut to the PAIS tax. Some estimated, however, that the lower rates could slash petrochemicals import prices, on average, by $200/tonne. Most sources also mentioned the example of Dow, which is the sole polyethylene (PE) producer in Argentina and has greatly benefited from the closed economy up to now. Petrochemicals and the wider industrial sectors, including construction, remain the hardest hit industries amid the country’s recession, which is trying to digest the ‘shock therapy’ being implemented by the government. Consumers are squeezed and few can afford the luxury of even thinking about purchasing the higher-priced, petrochemicals-intensive durable goods, which are the ones which could revive the beleaguered chemicals industry. Moreover, those with stocks of materials purchased in imports under the previous PAIS rates are unlikely to lower their prices until they sell them – that period could be a few weeks or a few months. “Plastic sales remain weak because people think prices will go down with the tax reduction. But I am not convinced the reduction will be immediate and all at once. Prices could only come down once the new imports under the new regime come into force,” said one source at a large distributor. “It will be slow process, over one or two months – we will have to see how petrochemicals producers react and whether they start lowering prices straight away or do it in phases.” This source and others said Dow announced to its customers in Latin America prices increases of around $100/tonne for most materials, although that increase was not applied in Argentina, said the distribution source. Dow is Argentina’s sole producer of polyethylene. It operates facilities at the Bahia Blanca petrochemicals hub, south of Buenos Aires. According to ICIS Supply & Demand, it has the capacity to produce 730,000 tonnes/year of ethylene, 307,000 tonnes/year of high density polyethylene (HDPE), 329,000 tonnes/year of linear low density polyethylene (LLDPE), and 40,000 tonnes/year propylene. As the sole PE producer in a country locked up to external trade, Dow has greatly benefited in the past two months. Sources reported earlier in the year the company was selling PE at $2,400/tonne, when global prices stood at around $1,200/tonne. The price increase announced earlier in the year added more doubts to the company pricing strategy. Dow had not responded to a request for comment at the time of writing. The source at the large distributor added, “Dow’s $100/tonne increase was not implemented it in Argentina as prices remain higher than global prices. “If the reduction in the PAIS tax brings a reduction of $200/tonne, for example, perhaps Dow first decides to raise prices by $100/tonne and then take the $200/tonne hit and see what the market’s reaction is. Right now, we do not know how it will play out.” STAYING PUTAnother source at a petrochemicals distributor, with decades of experience behind him, described the largest recession it has seen in its career. In such an environment, he went on to say, prices should go down to prop up demand, at least, according to economy theory. But Argentina, it added, has escaped economy theory often in past decades so nothing can be taken for granted. The source even added that it was mulling whether to attend an industry event next week in Buenos Aires, just in case a business opportunity is lost while it attends the conference. On 4 September, the Latin American Petrochemical and Chemical Association (APLA) is holding its annual conference on sustainability, which together with its logistics event and the annual event are the three highlights in the Latin American petrochemicals markets. “There is a strong, very strong recession, and we have to be very attentive to each business that emerges in order to be on the edge of not losing the opportunity or do a bad sale,” said the source. Font page picture source: Shutterstock Focus article by Jonathan Lopez

HOUSTON (ICIS)–Fertilizer producer OCI Global announced it has successfully completed the sale of its equity interests in Iowa Fertilizer Company (IFCO) for $3.6 billion to Koch Ag & Energy Solutions. The producer said the closing of the deal involving the large-scale US greenfield nitrogen fertilizer facility marks a significant milestone in OCI’s strategy to unlock value for shareholders Located in Wever, Iowa the plant was the first greenfield nitrogen fertilizer plant built in the US in over 25 years, and the largest private construction project in Iowa’s history, adding more than 3,500 jobs during the construction period. The facility opened in 2017 and has the capacity to produce 3.5 million tonnes of nitrogen fertilizers and diesel exhaust fluid annually. “This acquisition marks another significant investment in the growth of our fertilizer business,” said Mark Luetters, Koch Ag & Energy Solutions president. “In the past 15 years, we have invested $2 billion in our North American production facilities to enhance reliability, expand production and improve logistics for our customers. This investment enhances our ability to serve customers long-term by providing additional flexibility to adapt to their nitrogen preferences.” The Wever facility adds to the Koch Fertilizer holdings, which includes four nitrogen production facilities in the US and one in Canada plus an extensive terminal network. The company and its affiliates also have partial ownership of three nitrogen facilities in Trinidad and Tobago, as well as a phosphate production facility in Morocco. The sale was first announced last December and OCI said it is confident that under Koch’s stewardship, IFCO will be well positioned for its next phase of growth. “This milestone further reinforces OCI’s standing and record as a successful developer, operator and investor. Looking ahead, we will continue to deploy our distinctive knowledge, management expertise and entrepreneurial spirt into further value accretive ventures,” said Nassef Sawiris, OCI executive chairman.

LONDON (ICIS)–BASF is to end production of adipic acid and several downstream units at Ludwigshafen, Germany, as part of structural changes underway at the site, the company said on Thursday. Production of adipic acid will conclude at the site over the course of 2025, while units to manufacture cyclododecanone (CDon) and cyclopentanone (CPon), which utilize adipic acid as a raw material, will cease in the first half of the year. The company is planning to cut around €1 billion in costs from the site, with new CEO Markus Kamieth expected to fully set out what steps will be taken at the company’s capital markets day in September this year. The company had already cut back adipic acid production capacity at the site in 2023, but had kept a some capacity onstream to feed into those downstream units. BASF expects to cease deliveries of CDon and CPon, which are used in nylon 12 and pharmaceuticals production respectively, and is in talks with customers, the company added. It will continue to produce adipic acid in Onsan, South Korea, and Chalampe, France, BASF added. The decision was taken as part of the ongoing strategic review of site operations to “ensure competitiveness under changing market conditions”, the company said in a statement. Around 180 workers will be affected by the closures, with BASF planning to explore the possibility of employment positions elsewhere within the group. “These closures are part of the development of a long-term target picture for the transformation of the Ludwigshafen site,” said BASF industrial relations director Katja Schwarpwinkel. Thumbnail photo: BASF’s Ludwigshafen, Germany production complex. Picture source: BASF Updates throughout

LONDON (ICIS)–BASF is to end production of adipic acid and several downstream units at Ludwigshafen, Germany, as part of structural changes underway at the site, the company said on Thursday. Production of adipic acid will conclude at the site over the course of 2025, while units to manufacture cyclododecanone (CDon) and cyclopentanone (CPon), which utilize adipic acid as a raw material, will cease in the first half of the year.

LONDON (ICIS)–A “worrying” future lies ahead for the UK chemicals industry because there is no concrete roadmap in place to eliminate fossil fuels, the think tank Green Alliance said on Thursday. Researchers at the organization warned that up to 140,000 jobs in the industry are at risk in the long term if policymakers fail to plan for its decarbonization. The figure is far greater than the 33,700 workers currently employed by the steel industry,  the most recent subject of talk about job losses and decarbonization. The UK chemicals industry accounts for 19% of the UK’s industrial emissions and is heavily dependent on fossil fuels for energy and feedstocks. It will also, however, play an important role in providing vital components for net-zero technologies, including batteries and wind turbines, the Green Alliance noted. Despite the chemical industry’s strategic value, government support has been minimal so far because of its focus on carbon capture and storage (CCS) and hydrogen fuel. As a result, more important areas such as electrification and the substitution of fossil fuel feedstocks are in danger of being left behind, Green Alliance said. It pointed out that a new industrial strategy will provide an opportunity to secure the future of the industry and safeguard the resilience of the UK economy. “The government needs to develop a coherent vision for what a successful green chemical industry looks like,” said Liam Hardy, senior policy analyst at Green Alliance.