SINGAPORE (ICIS)–Squeezed by high propane costs and weak propylene prices, some Chinese propane dehydrogenation (PDH) operators are turning to a potential lifeline: commercializing hydrogen, a valuable byproduct of their operations. Join ICIS LPG analysts Lillian Ren and Shihao Zhou as they discuss how commercializing hydrogen could turn the tide for China’s PDH producers. They’ll delve into current market challenges, the potential of hydrogen as a lifeline, and what this shift could mean for the future of the industry.

SINGAPORE (ICIS)–China’s Hengli Group is planning to invest yuan (CNY) 9.2 billion ($1.3 billion) into its shipbuilding business at Dalian in Liaoning province, the company said on Monday. Its subsidiary Hengli Heavy Industry will build a shipbuilding capacity of 1.8 million deadweight tonnes (DWT) each year and 1.8 million tonnes/year of steel processing capacity at Changxin Island in Dalian City in northeastern China, the company posted on its account on WeChat, a Chinese social media platform. An agreement was signed on 7 July between Hengli Group and the local governments of Dalian City and Changxin Island on the investment. The investment will expand the Group’s building capacity of ultra-large carriers of crude and liquefied petroleum gas (LPG), container vessels, offshore floating storage and drilling facilities. Separately, Hengli Heavy Industry on 3 July inked a deal to build six 325,000 DWT ore tankers for Singapore’s shipping firm Winning International Group. The shipping company in September 2023 had ordered two WinningMax carriers from Hengli. Hengli Group entered the shipyard business in 2022 through the acquisition of STX (Dalian), the Chinese unit of South Korea’s STX Group. Hengli Group is parent of Hengli Petrochemical. ($1 = CNY7.27)

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 5 July. Shell to post up to $2 billion in impairments in Q2 results Energy major Shell on Friday said that it expects to book $2 billion in post-tax impairments following the sale of its Singapore assets and the suspension of construction at its biofuels plant in the Netherlands. European Commission imposes China EV tariffs citing ‘unfair’ subsidies The European Commission is to move forward with proposed plans to impose tariffs of nearly 40% in some cases to China-manufactured battery electric vehicles (BEVs), citing a level of state subsidy it terms as “unfair”. Global phenol demand expected to rise, driven by downstream growth Global phenol demand is expected to increase by about 1.9% in 2024 after a weak 2023, supported by growth in the key downstream bisphenol A (BPA) market. Europe cracker margins down on firmer naphtha, LPG costs Europe cracker margins went down week on week on the back of firmer feedstock costs, ICIS margin analysis showed on Tuesday. Eurozone manufacturing momentum ebbs in June as demand deteriorates Eurozone manufacturing sector activity slipped further into contraction in June as demand slowed in most of the bloc’s largest economies, while conditions improved in the UK.

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 5 July 2024. OUTLOOK: Snug import supply supports Asia MEG amid slowing demand By Judith Wang 03-Jul-24 11:52 SINGAPORE (ICIS)–Monoethylene glycol (MEG) import supply in Asia for July is expected to stay snug in the near term, while demand looks set to slow down. INSIGHT: Methanol or ethylene, that is the question for China By Doris He 02-Jul-24 17:00 SINGAPORE (ICIS)–China’s methanol-to-olefins (MTO) industry has always been a focus of attention among methanol market players, as it accounts for half of overall demand. More attention has recently been shifted to ethylene, from the overall margins of a typical MTO plant in coastal regions. OUTLOOK: Asia nylon markets may slow down in H2 2024 on lengthened supply By Charmaine Lim 01-Jul-24 14:40 SINGAPORE (ICIS)–Nylon markets in Asia are expected to slow in H2 2024 compared to the first half of the year as the upcoming seasonal lull in Q3 approaches, with new capacities planned to start up in China this year. S Korea antidumping probe on China SM extends to Sept, discussions and hearings ongoing By Luffy Wu 01-Jul-24 15:22 SINGAPORE (ICIS)–The Korea Trade Commission is continuing with its anti-dumping probe against styrene monomer (SM) imports from China, with some discussions and hearings between the government and market players heard ongoing. PODCAST: China oxo-alcohols to face supply-demand pressure, new capacity to be a focus By Claire Gao 01-Jul-24 19:24 SINGAPORE (ICIS)–In this podcast, ICIS analyst Claire Gao explores the oxo-alcohols market overview and outlook. OUTLOOK: Persistent economic woes dampen Asia chemical freight demand By Hwee Hwee Tan 02-Jul-24 12:03 SINGAPORE (ICIS)–Asia’s chemical freight demand is dampened as macroeconomic doldrums were pulling back spot trades well into the third quarter despite reducing plant capacity losses for key liquid bulk products.

HOUSTON (ICIS)–Tropical storm Beryl is expected to make landfall by Monday between Corpus Christi and Freeport, Texas, the homes to several chemical plants and refineries as well as two of the nation’s major terminals that export liquefied natural gas (LNG). Tropical storm Beryl is 195 miles (315 km), south southeast of Matagorda Bay, with maximum sustained winds of 65 miles/hour, according to the National Hurricane Center. It should become a hurricane later on Sunday and continue strengthening before making landfall by early Monday in the middle of the Texas Gulf Coast. The following map shows the forecasts path of Beryl. Source: National Hurricane Center BERYL THREATENS PETCHEMS, LNG TERMINALSPetrochemical plants and complexes as well as refineries, LNG terminals and oil-exporting operations are with the center’s hurricane watch zone, which includes Corpus Christi, Victoria and Freeport. The rest of the Texas coast is subject to a tropical storm warning. Corpus Christi is home to petrochemical plants, refineries, an LNG terminal and major crude oil exporting operations. Freeport is home to an LNG terminal and several petrochemical plants, including Dow’s major complex. PORT OPERATIONS THREATENEDThe National Hurricane Center also issued a storm surge warning that covers Corpus Christi Bay, Matagorda Bay and Galveston Bay. In regards to US oil and gas production in the Gulf of Mexico the Bureau of Safety and Environmental Enforcement (BSEE) has not issued any reports. Thumbnail shows Beryl. Image by National Hurricane Center.

SAO PAULO (ICIS)–Hurricane Beryl is expected to post a “slow re-intensification” as it heads towards the north and could potentially hit Texas’ industrial hub of Corpus Christi by Monday. On 4 July, the US National Hurricane Center had said Beryl had weakened from a category 5 hurricane to a category 3 and was expected to become a storm thereafter. However, on Friday, as the Hurricane brought havoc to Yucatan, the NHC said it could strengthen again once it hits sea waters, making it stronger as it heads to make another landfall in Texas. “Beryl is expected to emerge over the southwestern Gulf of Mexico tonight and then move northwestward toward northeastern Mexico and southern Texas by the end of the weekend,” said the NHC on Friday morning. “Maximum sustained winds have decreased to near 85 mph (140 km/h) with higher gusts. Continued rapid weakening is expected as Beryl moves farther inland and crosses the Yucatan Peninsula today, but slow re-intensification is expected once Beryl moves back over the Gulf of Mexico.” Moreover, the Houston area – an eight-million-strong metropolitan area – could also now be subject to a significant impact, although analysts at Space City Weather said on Friday the impact “will be mostly manageable locally”. PETROCHEMICALS, ENERGYWhile the Altamira petrochemicals hub in the Mexican state of Tamaulipas was spare from the worse, industrial assets in Texas may not have the same luck. The current pathway projected by the NHC implies that Beryl would make landfall in Texas right in the Corpus Christi area, where major refining and petrochemical assets are located. In addition to being a refining and petrochemical hub, Corpus Christi is a major oil-exporting port and hosts a terminal that exports liquefied natural gas (LNG). If Beryl finally disrupts US LNG exports, that could have a knock-on effect on petrochemical prices by shutting down one of the eight LNG export terminals in the country. If the disruption lasted long enough, prices for natural gas would fall. Lower gas prices would drag down those for ethane, the main feedstock that US crackers use to produce ethylene. Petrochemical producers could benefit from lower feedstock costs. Meanwhile, as Beryl strengthens again, energy companies in Texas may choose to shut their plants as a precaution, as well as oil and gas wells in the Gulf of Mexico. Major US oil and liquefied natural gas (LNG) ports could also be touched by Beryl now, which could potentially cause major disruption in supplies. THE WEEKEND IS KEYSpace City Weather said that where Beryl ultimately makes landfall will depend on how far the high-pressure system is over the southern US retreats. The landfall location is “complicated by the contour of the South Texas coastline, which is very nearly north-south relative” to the Gulf of Mexico. “Regarding Houston, I would love to be able to tell you with certainty that Beryl will make landfall near or south of Corpus Christi. I truly think that will be the case. But as Beryl’s track has moved significantly in the last 24 hours that is not something I can guarantee you,” concluded analyst Eric Berger. Source: US National Hurricane Center

LONDON (ICIS)–Senior editor for recycling Matt Tudball discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: Rises on the low end of colourless flake narrows UK, eastern Europe ranges Colourless, blue bale prices rise in Italian monthly auctions Increased bale supply, tighter PET, cheaper R-PET imports

SINGAPORE (ICIS)–Energy major Shell on Friday said that it expects to book $2 billion in post-tax impairments following the sale of its Singapore assets and the suspension of construction at its biofuels plant in the Netherlands. The sale of the company’s Singapore Energy and Chemicals Park announced in May will result in a non-cash, post-tax impairment of $600 million to $800 million when it publishes its second-quarter results on 1 August, the company said in a statement. Shell reached an agreement to sell the assets on Singapore’s Pulau Bukom and Jurong Island to CAPGC, a joint venture between Indonesia’s Chandra Asri Capital and global commodities trader Glencore. The sale is expected to be finalized by the end of 2024. Meanwhile, the temporarily paused on-site construction work at its 820,000 tonne/year biofuels facility at the Shell Energy and Chemicals Park Rotterdam will result in an impairment of between $600 million and $1 billion. The facility is designed to produce sustainable aviation fuel (SAF) and renewable diesel made from waste. Separately, the company said that it expects adjusted earnings at its chemicals unit “to be close to break-even” in the second quarter after posting negative adjusted earnings of $113 million in the first quarter. The company expects an indicative chemicals margin of $155/tonne for the second quarter, up from $150/tonne in the first quarter and $153/tonne in the same period of last year. Chemicals utilization for the second quarter is expected to be at 78% to 82%, up from 73% in the first three months of 2024. Thumbnail photo source: Shell

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson: China’s polypropylene (PP) exports in 2024, based on the January-May trends, could reach 2.6m tonnes. That would be double the level of 2023. And as exports surge, China’s self-sufficiency in PP looks set to see a similar dramatic increase. As recently as 2019, China’s PP net imports (imports minus exports) totalled 4.8m tonnes. If the January-May 2024 again continued, we would see full-year net imports of just 900,000 tonnes. Don’t say I didn’t warn you. In September 2021, the blog started to flag up the declines in Chinese PP demand growth combined with the surge in local capacity that created the very real prospect of China becoming a net exporter. And don’t assume that if China’s exports won’t remain in lower value homopolymer grades. China is said to be tripling its number of grades as it broadens its licensing of technologies. But in this ever-more muddle world, now that the Petrochemicals Supercycle is over, what is described above is just one scenario. In the short term, rising container freight rates might limit Chinese exports over the next few months. Or at the very least, we could see China’s exports focused more on southeast Asia because of higher freight rates to other destinations such as south Asia, South America and Africa. Another feature of a PP world turned upside down is that since 2020, China’s PP exports have been sent to a far wider range of destinations. We must also consider the impact of rising protectionism on China’s exports both in the short -and long-term. Confused? You should be, as this is the only sensible response. How do we see through the muddle? What recent history teaches us is that to understand petrochemicals markets, you must follow debts, demographics and geopolitics. Equally important, now that the Petrochemical Supercycle is over, are the effects of sustainability and climate change on demand and trade flows. The old ways of looking at markets no longer work. In the absence of a 100% accurate crystal ball, and with all these variables in play, the only sensible approach is broader and deeper scenario planning. 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.