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.

MUMBAI (ICIS)–India’s state-owned Hindustan Petroleum Corp Ltd (HPCL) plans to invest rupees (Rs) 46.79 billion ($551 million) to expand the lube oil base stocks (LOBS) production at its Mumbai refinery by 289,000 tonnes/year or by about 61%. “The company board has approved the ‘Lube Modernization and Bottoms Upgradation Project’ at the Mumbai Refinery,” it said in a statement to the Bombay Stock Exchange on 16 December. This project will increase the company’s LOBS production to 764,000 tonnes/year from current 475,000 tonnes/year with production of superior grade Group II+ and Group III LOBS, it added. HPCL expects to start producing the additional premium base oils via a new integrated hydrocracker and catalytic dewaxing unit by 2027-2028. ($1= Rs84.91)

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson. To paraphrase William Shakespeare, I see last week’s fuss about China’s new economic stimulus as being full of sound and fury, signifying hardly anything. The hard reality is that China is undergoing a period of a much lower GDP and therefore chemicals demand growth. Nothing can change this trajectory, for reasons I discuss in detail in today’s post. During 2025, the problem will remain far too much global capacity chasing much weaker-than-expected demand up and down all the chemicals value chains because the consensus on China was wrong. So, to add to my five forecasts for 2025 which I published last week, here is a sixth: There will be no significant improvements during next year in China’s CFR polyethylene (PE) and polypropylene (PP) price spreads over CFR Japan naphtha costs. The 2024 final numbers are almost in. We can see that the downturn in spreads that followed the Evergrande Turning Point continues. Let’s start with PE where 2022-2024 average spread for the three grades was just $300/tonne. This compares with a spread in 1993-2021 – during the Chemicals Supercycle – that averaged $532/tonne. The average 2022-2024 PP spread was $240/tonne as against $562/tonne during the Supercycle. Please don’t be distracted by unhelpful noise. Instead, place all your focus on retooling your tactics and strategies to deal with the post-Supercycle 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.

HOUSTON (ICIS)–Two world-scale joint venture projects being developed by Chevron Phillips Chemical and QatarEnergy remain on track to start operations in 2026, Phillips 66 said on Monday. Phillips 66 and Chevron hold equal stakes in Chevron Phillips Chemical (CP Chem). The US project is Golden Triangle Polymers, an integrated polyethylene (PE) complex in Orange, Texas. Chevron Phillips holds a 51% stake, and construction started in 2023. The Qatari project in Ras Laffan is another integrated PE project. It is a 70:30 joint venture between QatarEnergy and CP Chem. Construction on this project started in 2024. PHILLIPS 66 CAPEX BUDGETPhillips 66 provided the updates on the two petrochemical projects when it revealed its 2025 capital budget, as shown in the following table. Figures are in millions of dollars. Sustaining Growth TOTAL Midstream 429 546 975 Refining 414 408 822 Marketing & Specialties 63 91 154 Renewable Fuels 18 56 74 Corporate and other 74 1 75 TOTAL 998 1,102 2,100 Source: Phillips 66 Phillips 66’s proportionate share of capital spending in its CP Chem and WRB Refining joint ventures is $877 million, and its inclusion would bring Phillips 66’s total 2025 capital spending to $3 billion. The joint ventures’ spending will be self funded, Phillips 66 said. WRB Refining is a 50:50 joint venture made up of Phillips 66 and Cenovus Energy. The joint venture owns the Wood River refinery in Illinois and the Borger refinery in Texas. WRB’s capital spending will direct its capital spending on sustaining projects, Phillips 66 said. PHILLIPS TO SELL STAKE IN OIL PIPELINEA subsidiary of Phillips 66 has agreed to sell its 25% non-operated stake in the Gulf Coast Express Pipeline to an affiliate of ArcLight Capital Partners. Pre-tax proceeds from the sale should total $865 million. The sale should close in January 2025. Thumbnail shows PE. Image by ICIS.

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 13 December. Dow’s $2.4-3.0 billion infrastructure deal larger than expected Dow signed a deal to sell a minority stake in its US Gulf Coast infrastructure assets to a fund managed by Macquarie Asset Management for up to $3.0 billion – larger than expected, according to UBS. PCC’s proposed USG chlor-alkali unit to add caustic length in unique development US caustic soda supplies will continue to grow in the coming years following an announcement by PCC Group that it intends to invest in a new 340,000 tons/year chlor-alkali plant at DeLisle, Mississippi. The new capacity will be built on Chemours site at DeLisle Mississippi with the intent to provide Chemours with reliable access to chlorine. The company intends to sell its caustic soda to strategic partners and into the open market. Construction on the unit is expected to begin in early-2026 and conclude in 2028. INSIGHT: New gas pipeline to provide support for ethane prices for US chems A new gas pipeline set to be built by Energy Transfer should provide support for natural gas and ethane prices in the Permian producing basin, lowering the likelihood that US chemical producers see another period of ultra-low costs for the main feedstock used to make ethylene. Olin to shut diaphragm chloralkali capacity that serves Dow’s Freeport PO unit Olin plans to shut down its diaphragm-grade chloralkali capacity in Freeport, Texas, that provides feedstock to Dow’s propylene oxide (PO) unit, the US-based chloralkali producer said on Thursday. ACC expects modest US chemicals volume recovery in 2025 – economist The American Chemistry Council (ACC) expects a 1.9% rebound in chemical volumes in 2025 after two consecutive years of declines as the US economy undergoes a soft landing and the housing market improves in the second half of the year, its chief economist said.

LONDON (ICIS)–Click here to see the latest blog post on Chemicals & The Economy by Paul Hodges, which looks at the likely colder weather ahead. 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. Paul Hodges is the chairman of consultants New Normal Consulting.

LONDON (ICIS)–The eurozone private sector ended the year on a bearish note as output contracted driven by a weakening manufacturing sector, which offset a return to growth for services. The eurozone purchasing managers’ index (PMI) stood at 49.5 for December, according to flash data for the month, an improvement from 48.3 in November but still below growth territory. A PMI score of above 50.0 signifies growth. Continuing manufacturing sector weakness drove the contraction, and more than offset a rebound in service sector productivity to 51.4, a two-month high, following the contraction last month. After a difficult, low-demand year, the manufacturing sector ended 2024 at a 12-month low of 44.5, according to S&P Global. “The manufacturing sector’s situation is still pretty dire,” said Cyrus de la Rubia, chief economist and Hamburg Commercial Bank, which helps to assemble the eurozone PMI data. “Output fell at a quicker pace in December than at any other time this year, and incoming orders were down too. The destocking cycle in inventories shows no sign of stopping either,” he added. Manufacturers cut back purchasing activities in the sharpest monthly decline of input buying in 2024, while pricing fell for the industry, but at the slowest rate since values started to decline four months ago. More robust global PMI data for the previous month indicates that conditions may be stabilizing internationally, which could become a balancing force for the eurozone if momentum continues, de la Rubia said. Markets have been buffeted by a recent government collapse in the eurozone’s two largest economies, Germany and France, but the prospect of new governments forming earlier than expected could provide some upside potential for 2025, he added. “If future governments manage to chart a clear course, there could still be positive surprises next year. Eurozone companies were actually slightly more confident than in November that business activity will be higher a year from now than it is today,” he said. Manufacturing sector momentum also slowed in the UK, with sector PMI falling to 47.3 in December compared to 48.0 in November, an 11-month low. Overall flash composite PMI numbers for the country ticked up to 50.5, driven by an uptick in service sector output, but the figures still point to an economy that has run aground in the fourth quarter. Conditions could become chillier still going into 2025, according to Chris Williamson, chief business economist at S&P Global Market Intelligence. “While the December PMI is indicative of the economy more or less stalled in the fourth quarter, the loss of confidence and increased culling of jobs hints at worse to come as we head into the new year,” he said. Slowing growth increases pressure for the Bank of England to roll out further rate cuts this week but, with inflation rising steadily, the central bank’s monetary policy committee has ample reason for caution, he added. Focus article by Tom Brown. Thumbnail photo: An automotive plant in Bremen, Germany (Source: Shutterstock)

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 13 December. Little improvement expected for German chems sector in 2025- VCI Germany’s chemicals and production is expected to have increased by 2% in 2024, while output growth is set to slow next year, sales could stagnate and prices fall, trade group VCI said on Friday. Ample supply for crude markets in 2025 despite stronger demand – IEA Global crude oil markets are likely to be comfortably supplied next year despite moves by OPEC+ to hold back on easing production cuts and anticipated firmer demand, the International Energy Agency (IEA) said on Thursday. INEOS pushes forward with Greensand carbon storage project INEOS and project partners Harbour Energy and Nordsofonden have made a final investment decision (FID) to move forward with the first commercial phase of the Greensand carbon storage project. Dow’s $2.4-3.0 billion infrastructure deal larger than expected Dow signed a deal to sell a minority stake in its US Gulf Coast infrastructure assets to a fund managed by Macquarie Asset Management for up to $3.0 billion – larger than expected, according to UBS. EU-Mercosur trade deal to support R&D in green chemicals – Brazil’s Abiquim EU and Mercosur chemicals will greatly benefit from trade without barriers as per their free trade agreement (FTA) which will also encourage much-needed research and development (R&D) in new technologies for greener chemicals, Brazil’s chemicals producers’ trade group Abiquim said.

SINGAPORE (ICIS)–South Korea’s benchmark stock market index was closed lower on Monday, snapping four straight days of gains, after the country’s parliament impeached President Yoon Suk Yeol over the weekend for imposing a short-lived martial law on 3 December. The KOSPI composite index slipped 0.22% to settle at 2,488.97, with shares of major petrochemical companies closing mixed. The Korean won (W) eased against the US dollar at W1,437.68 as of 08:00 GMT, weaker than the previous session’s closing of W1,435.45. The won had plunged to an almost two-year low of above W1,440 to the US dollar when Yoon declared martial law late on 3 December which lasted about six hours. South Korea’s National Assembly on 14 December voted 204-85 to impeach Yoon for imposing martial law, which plunged the country into political instability and economic uncertainty. A two-thirds majority was required to approve the motion, which was the second one filed after the first motion on 7 December failed. Yoon’s political duties have been suspended pending a Constitutional Court decision, which is expected in 180 days, on whether to re-instate or remove him from office. Prime Minister Han Duck-soo became the acting President upon Yoon’s impeachment, stating that his mission is to “swiftly stabilize the confusion in state affairs” during a Cabinet meeting. Han talked to outgoing US President Joe Biden by phone on 15 December, reassuring him that “South Korea will carry out its foreign and security policies without disruption”, according to a statement from Han’s office. EYES ON 2025 Separately, finance minister Choi Sang-mok on Monday said he has written a letter to financial institutions and world leaders to explain the government’s response to the recent political situation and to request their trust and support in the South Korean economy. During an emergency ministerial meeting on 15 December, strategies were heard for economic stabilization and growth in the short- and long-term. For one, the finance ministry will announce its economic policy direction for 2025 by the end of the year, along with a mid- to long-term strategy to be released in January 2025. Meanwhile, the Ministry of Trade, Industry and Energy (MOTIE) is also drafting support measures for the petrochemical industry in preparation for the Trump-led US government in January 2025, which is threatening to impose tariffs on all imported goods. The US, along with China, is a major trading partner of South Korea. South Korea’s measures are expected to take effect in Q1 2025. The country – which is a major exporter of ethylene and aromatics, such as benzene, toluene and styrene monomer (SM) – is reeling from a combination of weak external demand and overcapacity in China. (updates closing levels for index, share prices; adds details throughout) Thumbnail image: South Korean Prime Minister Han Duck-soo, who assumed office as acting president after the parliamentary impeachment of President Yoon Suk-yeol, speaks to reporters at the government complex in central Seoul, South Korea, 15 December 2024. (YONHAP/EPA-EFE/Shutterstock)