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Liquefied Petroleum Gas08-Jul-2024
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.
Ethylene08-Jul-2024
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)
Speciality Chemicals08-Jul-2024
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.
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Gas08-Jul-2024
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.
Ethylene07-Jul-2024
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.
Ethylene05-Jul-2024
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
Recycled Polyethylene Terephthalate05-Jul-2024
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
Crude Oil05-Jul-2024
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
Polyethylene05-Jul-2024
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.
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