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Acetic Acid19-Feb-2025
HOUSTON (ICIS)–Shares of Celanese fell by 23%
in afternoon trading to reach lows last seen in
2013, after the company gave weak guidance for
the first two quarters of the year and implied
that growth would come from costing cutting and
efficiency programs – and not from any
widespread increase in demand.
The following tables shows Celanese’s Q1
segment guidance and
compares it with Q1 2024. Figures are in
millions of dollars.
Adjusted EBIT
Q1 25
Q1 24
% Change
Acetyl Chain
175-190
296
-38.3%
Engineered Materials
90-110
201
-50.2%
Source: Celanese
Operating EBITDA
Q1 25
Q1 24
% Change
Acetyl Chain
235-250
353
-31.3%
Engineered Materials
190-210
303
-34.0%
Source: Celanese
For Celanese as a whole, adjusted
earnings/share should be 25-50 cents in the
first quarter, down from $2.08 from Q1 2024.
Second-quarter earnings/share should be
$1.25-1.50 before taking into account the
benefits from any other business improvements
being taken by Celanese. That is down from
$2.38
in adjusted earnings/share for Q2 2024.
Celanese shares were trading below $54 in the
late afternoon. They were above $174 as
recently as March 2024.
GRIM DEMAND
OUTLOOKThird-party forecasters
expect almost no growth in 2025 auto builds.
This makes up the largest market for Celanese’s
Engineered Materials segment.
Celanese sees few signs of any near-term
improvement in any region for paints, coatings
and construction, key end markets for the
Acetyl Chain segment.
Because of the weak demand outlook in its core
markets, Celanese is focusing on steps the
company can take to cut costs, increase cash
flow and boost revenue through the business
models it uses in its Acetyl Chain and
Engineered Materials segments.
“With little indication of near-term recovery,
it is our job to drive productivity and
earnings growth at Celanese even if fundamental
demand remains flat or declines further,” said
Scott Richardson, CEO.
The second half of the year should be better
than the first half, but that is because of the
timing of dividend payments from an affiliate
in China, the completion of turnarounds and
self-help actions.
DESTOCKING TO CONTINUE IN
Q1Celanese expects to continue
working down inventories in its Engineered
Materials segment, although not to the same
magnitude as the fourth quarter, Richardson
said.
ISOLATED GROWTH
POCKETSSome market segments are
showing some signs of growth, which Celanese
will target – including servers, medical
applications, and athletic wear. The company
sees opportunities in electric vehicles, which
have unique material challenges.
CELANESE PUTS A PRIORITY ON
CASHGiven its debt levels,
Celanese is making cash a priority, Richardson
said.
“We are looking to do everything we can to
unlock cash,” he said. “It is a focus on on
cash first.”
Thumbnail shows money. Image by ICIS
Speciality Chemicals19-Feb-2025
HOUSTON (ICIS)–The US ports of Freeport and
Corpus Christi were closed on 19 February
because of dangerous weather conditions,
shipping brokers told ICIS.
Port Houston remains open, as are the Texas
ports of Texas City and Galveston, and Lake
Charles, Louisiana.
The Port of Freeport closed at 5 am to all
inbound traffic.
The port of Corpus Christi closed at 2 am and
suspended boarding of all vessels because of
heavy weather, high winds and offshore
conditions.
The National Weather Service has issued gale
warnings that will remain in effect until 3 pm
on Wednesday for areas in the US Gulf including
Matagorda and Galveston Bays, and coastal
waters from Freeport to the Matagorda ship
channel out 20 miles.
Port Houston has seen heavy morning fog over
the past week to 10 days that has slowed some
movement through the channel, according to
market participants.
Port Houston is the busiest port in vessel and
barge movements and the largest US port by
tonnage, with more than 200 docks and 270
facilities.
It is home to the largest petrochemical
manufacturing complex in the nation.
It is also the top US port for petroleum and
the fifth largest container port in terms of
TEUs (20-foot equivalent units) in 2022.
Mixed Xylenes19-Feb-2025
LONDON (ICIS)–In this podcast, market editors
Zubair Adam (MX) and Miguel Rodriguez Fernandez
(PX) discuss the challenges for future demand.
MX are traded in two grades. The isomer-grade
xylene is mainly used as a feedstock for PX and
OX production, while the main application for
solvent grade is as a raw material for dye,
organic pigment, perfume and medicines, as well
as a general solvent for paint and agricultural
pesticides.
PX is widely used as a building block to
manufacture other industrial chemicals, notably
DMT and purified terephthalic acid (PTA), which
is used in the production of PET.
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Speciality Chemicals19-Feb-2025
LONDON (ICIS)–A new framework aimed at
increasing the competitiveness of European
industry is targeting lower energy costs and
stronger purchase incentives for local and
sustainable products, according to a leaked
early draft of the measures.
New legislation intended to reduce energy
costs for industry
Increased focus on purchasing local
products
No watering down of decarbonisation targets
A draft text of the European Commission’s Clean
Industrial Deal sets out plans to strengthen
the markets for sustainable products and
provide greater assistance for heavy industry
to cope with energy costs, rather than easing
decarbonisation targets.
Details of the industrial deal are set to be
released formally on 26 February
ENERGY
European industry has increasingly struggled to
remain viable in the wake of surging energy
costs on the back of the region’s shift away
from Russian natural gas since 2022.
The Commission has discussed various options to
mitigate this in recent weeks, including an
energy price cap.
The draft deal text – which is incomplete and
subject to change – proposes that the
European Investment Bank (EIB) backstop power
purchase agreements for small and
energy-intensive businesses. Modernising the
bloc’s grid infrastructure is also a priority.
The EIB would counter-guarantee part of the
PPAs taken on by businesses for long-term
renewable energy purchases, to lower the cost
of investing and provide guarantees allowing
green power projects to move forward.
In a bid to push down energy prices in the
short-term, the Commission is also pushing for
member states to cut electricity taxes to the
legal minimum thresholds for industrial players
investing in decarbonisation.
The Commission is currently scrutinising the
functioning of Europe’s gas markets through a
task force set up this month.
EUROPE
FOCUS “European preference
criteria” are set to become a prominent factor
in public and private procurement, according to
the draft text, as well as new labelling for
industrial products to more clearly delineate
greener products from fossil-based ones.
The new measures could set out “minimum local
content” requirements along with more robust
sustainability criteria for public procurement,
as well as exploring options for embedding
similar “non-cost criteria” into product
legislation.
CIRCULARITY, HYDROGENThe
Commission could be set to limit the export of
waste raw materials deemed critical for
circular production, and is expected to ease
restrictions on movement of raw materials
across the region in the Circular Economy Act,
expected next year.
Policymakers are also looking to clarify rules
on low-carbon hydrogen production, and are set
to launch a third call for projects through the
Hydrogen Bank, the auction house set up to
incentivise projects and investment, in the
third quarter 2025.
CBAM REFORMS, DECARBONISATION
TARGETSWith a targeted package
for the chemicals sector, which the draft text
refers to as the “industry of industries”,
expected towards the end of the year, the
Commissions’ review of the proposed carbon
border adjustment mechanism (CBAM) continues.
Intended to levy fees on the CO2 emissions of
energy-intensive goods imports such as steel
and fertilizers, the Commission is proposing to
simplify the framework ahead of its roll-out
next year, and reduce the administrative burden
on businesses.
A review of the planned measures will be
released in the second half of 2025, which will
also see potential for CBAM to be extended to
other downstream products.
Chemicals sector executives have largely
opposed the prospect of CBAM being applied more
widely to products from the sector.
While the draft clean industrial deal text
prioritises reducing the cost burden of the
energy transition, no move has been made to
water down the overall carbon reduction targets
in place in the region. The target remains to
become a decarbonised economy by 2050, and cut
emissions by 90% by 2040.
Focus article by Tom
Brown.
Thumbnail photo: At the European Council,
Brussels (Source: Shutterstock)
Polyester Staple Fibres19-Feb-2025
LONDON (ICIS)–John
Richardson, ICIS market development
director, hosts this new series of ICIS
podcasts focusing on the subject of
sustainability, and more specifically,
recycling.
In this first episode, John speaks to
Helen McGeough, global
plastics recycling analytics team lead, and
Matt Tudball, senior editor
for recycling, Europe about how EU regulation
is impacting the European recycling market now
and in the future, and why European regulation
will have a much more global impact.
Topics include:
Breaking down European legislation
(single-use plastics; packaging and packaging
waste; end-of-life vehicles)
Impact on collection, sorting and quality
of plastic waste in Europe and beyond
Europe’s competitiveness in the recycling
space and how the economics compare
How regulation may be a barrier for imports
into the EU
What’s the future of plastics if the
regulation does not work?
Crude Oil19-Feb-2025
LONDON (ICIS)–UK inflation rose sharply in
January to its highest level in 10 months,
according to official data on Wednesday.
The Consumer Prices Index (CPI) increased by
3.0% in the 12 months to January, up from 2.5%
in the previous month to hit the highest rate
since March 2024.
Transport costs, and food and non-alcoholic
beverages were the main drivers for the rise,
the Office for National Statistics (ONS) said.
The Bank of England cut
interest rates again in early February as
it tries to balance high inflation against low
economic growth, with UK GDP rising by just 0.1%
in the fourth quarter of 2024 after trending
down throughout the year.
Speciality Chemicals19-Feb-2025
BARCELONA (ICIS)–The Global Impact Coalition
(GIC) aims to bring chemical companies and
value chain partners together to solve
challenges on the road to net zero carbon.
Collective effort will bring down the cost
of sustainable solutions
GIC is spin off from the World Economic
Forum
Major chemical company members include
BASF, SABIC, Clariant, Covestro,
LyondellBasell, Mitsubishi, Syensqo, LG Chem
Automotive plastics recycling is a key
focus
Fully decarbonised car would only add $900
to final price
On average, decarbonising only adds 2-4% to
final price of most goods
However decarbonization costs rise steeply
up the value chain
GIC aims to grow geographically and along
industrial value chains
Will Beacham interviews
Charlie Tan, CEO of the GIC
and Lars Kissau, president of
BASF’s Net Zero Accelerator.
Editor’s note: This podcast is an opinion
piece. The views expressed are those of the
presenter and interviewees, and do not
necessarily represent those of ICIS.
ICIS is organising regular updates to help
the industry understand current market trends.
Register here .
Read the latest issue of ICIS
Chemical Business.
Read Paul Hodges and John Richardson’s
ICIS
blogs.
Crude Oil19-Feb-2025
SINGAPORE (ICIS)–South Korea’s government on
18 February unveiled an emergency trade package
worth at least won (W) 366 trillion ($255
billion), the largest ever, as economic cushion
amid a global trade war.
Of that amount, trade insurance worth W100
trillion will be provided to small and
medium-sized enterprises (SMEs), the Ministry
of Economy and Finance said at a 18 February
meeting chaired by Acting President Choi
Sang-mok.
Tax incentives will be offered to companies
with existing businesses overseas which may be
looking at relocating back to South Korea amid
the trade situation.
The ministry said that there will also be a
W1.2 trillion marketing budget to further boost
promotional efforts for SMEs, including in the
“Global South”, referring to the emerging
economies of Brazil, Vietnam and South Africa,
among others.
In 2024, South Korea’s exports were at an
all-time high of $683.7bn, up by 8.1% in the
previous year.
For 2025, however, export prospects are more
uncertain than ever due to recent announcement
of policies by the Trump administration in the
US, said Choi.
US President Donald Trump has announced
reciprocal tariffs as well as tariffs of around
25% on vehicle imports, which could hit
South Korea hard.
The US’ 25% tariffs on steel and aluminium will
take effect on 12 March, while its additional
10% tariffs on Chinese goods took effect on 4
February.
In January, South Korea had prepared a
W10 trillion stabilization fund amid
concerns about fresh US tariffs before Trump’s
inauguration as the 47th US president.
South Korea’s petrochemical industry is a major
exporter of the feedstock ethylene, as well as
aromatics such as benzene, toluene and styrene
monomer (SM).
However, an oversupply from China as well as
weakening demand overseas have posed ongoing
challenges for the industry.
($1 = W1,439.23)
Crude Oil19-Feb-2025
SINGAPORE (ICIS)–S-Oil plans to spend about
South Korean won (W) 3.5 trillion ($2.4
billion) in its Shaheen crude-to-chemical
project in Ulsan, which accounts for the bulk
of the refiner’s capital expenditure (capex)
set for the year.
Shaheen project on track for H1 ’26
completion
S-Oil plants run below full capacity over
past three years
Full-year net loss caused by heavy refining
losses, lower petrochemicals profit
The project capex for the year was increased by
about a third from W2.61 trillion in 2024, and
accounts for 86% of the total for the current
year, S-Oil stated in a slide presentation to
investors dated 24 January upon announcing its
Q4 results.
The project, whose name was derived from the
Arabic word for falcon, is now 55%
complete and is on track for commercial
operations in H2 2026, S-Oil said on 17
February.
S-Oil is 63%-owned by Saudi Aramco, the world’s
biggest exporter of crude oil.
Shaheen will have a 1.8 million tonne/year
mixed-feed cracking facility; an 880,000
tonne/year linear low density polyethylene
(LLDPE) unit; and a 440,000 tonne/year high
density PE (HDPE) plant.
The site will have a thermal crude-to-chemical
(TC2C) facility, which will convert crude
directly into petrochemical feedstocks such as
liquefied petroleum gas (LPG) and naphtha, and
the cracker is expected to recycle waste heat
for power generation in the refinery.
“The project is progressing smoothly as
planned,” S-Oil had said in the presentation,
noting that completion rate as of end-December
stood at 51.8%.
Installation is underway for 10 cracking
heaters, pipe rack modules at steam cracker and
aboveground piping, it added.
Construction of the multibillion US dollar
project at the Onsan Industrial
Complex of Ulsan City started in March
2023, with mechanical
completion targeted by the first half
of 2026.
Over the past two years, S-Oil had poured
nearly W5 trillion into the project, about half
of the estimated project cost of
$7 billion, based on capex.
“Shaheen Project is a pivotal expansion into
chemical business with industry-leading
competitiveness, which will enable another leap
forward in future profit generation capacity,”
S-Oil said.
The project is expected to yield 70% more
chemicals, with a capex/operating expenditure
savings pegged at 30-40% versus conventional
process.
At its Onsan site, S-Oil currently produces a
range of petrochemicals and fuels including
benzene, mixed xylenes, ethylene, methyl
tertiary butyl ether (MTBE), paraxylene,
polypropylene, propylene, propylene oxide,
biodiesel, and potentially bio-based aviation
and other bio-derived products.
The second-biggest item in S-Oil’s 2025 capex
list is upgrade & maintenance at W463
billion, up by more than 75% from 2024, noting
that its residual fluid catalytic cracking unit
(RFCC) is scheduled for turnaround this year,
based on the presentation.
For the past three years, the company’s plants
have not been running at full capacity, with a
marked reduction of run rates at its paraxylene
(PX) plants.
For the whole of 2024, the company incurred a
net loss of W163.4 billion, reversing the
profit of nearly W1 trillion in the previous
year, on heavy losses from refining and a 29%
profit decline in petrochemicals.
in billion won (W)
Q4 2024
Q4 2023
Yr-on-yr % change
FY2024
FY2023
Yr-on-yr % change
Revenue
8,917.0
8,830.0
1.0
36,637.0
35,727.0
2.5
Operating income
260.8
(56.4)
–
460.6
1,354.6
(66.0)
Net income
(102.1)
160.5
–
(163.4)
948.8
–
Refining operating profit
172.9
(311.3)
–
(245.4)
353.5
–
Petrochemical operating profit
(28.1)
33.9
–
134.8
190.6
(29.3)
Lube operating profit
115.9
221.0
(47.6)
571.2
810.5
(29.5)
In the first quarter of 2025, S-Oil expects
additional demand for PX and upstream benzene
as new downstream facilities start up,
“offsetting ample supply”, it said, adding that
a recovery in gasoline blending demand may
further support the markets.
Polypropylene (PP) and propylene oxide (PO)
will “continue to see capacity expansions in
China while demand recovery is anticipated from
China’s economic stimulus measures,” it said.
China, the world’s second-biggest economy is a
major market for South Korean exports.
Amid an economic slowdown, the Chinese
government have been introducing measures to
boost consumption and revive its ailing
property sector.
Focus article by Pearl
Bantillo
($1 = W1,441)
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