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Petrochemicals05-Aug-2024
LONDON (ICIS)–Click here to
see the latest blog post on Chemicals & The
Economy by Paul Hodges, which looks at the
long-term decline in the global smartphone
market, and how Apple has now lost its top five
position in China – despite offering $300
discounts.
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.
Speciality Chemicals05-Aug-2024
LONDON (ICIS)–Here are some of the top stories
from ICIS Europe for the week ended 2 August.
Freight headache
distracts from Europe’s PE, PP existential
crisis
Europe may be insulated from ballooning global
supply of polyethylene (PE) and polypropylene
(PP) in the second half of 2024, as spiking
Asian freight costs are the latest pain point
to disrupt trade flows.
Balanced to tight
conditions could persist for Europe BD in H2
2024
European butadiene (BD) market fundamentals are
likely to remain in a balanced to tight
position for much of the remainder of 2024.
Europe base oils Group
II/Group III expectations heavily dependent on
import logistics for H2
The European Group II and Group III outlooks
for the second half of 2024 center strongly on
imports, with several logistical issues across
the globe throwing some uncertainty onto the
markets.
Europe H2 ethylene,
propylene won’t be a repeat of H2 2023, may be
better than expected
The second half of 2024 is looking brighter for
Europe olefins markets compared to the same
periods in 2022 and 2023. No demand crashes are
expected, and there are several supportive
factors that could make H2 2024 better than
initially anticipated.
Europe PVC uncertainty
continues on weak demand, new antidumping
charges on imports
The European polyvinyl chloride (PVC) market
faces a period of uncertainty in H2 2024,
compounding the difficulties in long-term
outlook since the coronavirus pandemic began in
2020, and only slightly mitigated by
antidumping charges for US and Egyptian
imports.
Gas05-Aug-2024
SINGAPORE (ICIS)–Here are the top stories from
ICIS News Asia and the Middle East for the week
ended 2 August 2024.
OUTLOOK: NE Asia propylene to see limited
volatility despite historic capacity
additions
By Julia Tan 01-Aug-24 11:12 SINGAPORE
(ICIS)–The northeast Asian propylene (C3)
market is poised for a relatively stable second
half of 2024, despite China’s capacity
additions, as sustained demand from key sectors
and flexible propane dehydrogenation (PDH)
units counterbalance growing supply.
INSIGHT: The impact of China end-market demand
on Asia’s aromatics market
By Jimmy Zhang 31-Jul-24 13:00 SINGAPORE
(ICIS)–China’s government recently released
the latest end-consumption sales statistics for
the first six months of 2024. In this bulletin,
we found four items which are highly related to
Asia aromatics market – catering services, the
beverage sector, clothes and textiles, and home
appliances.
PODCAST: China’s steam crackers favoring ethane
on cost advantage
By Lillian Ren 31-Jul-24 11:14 SINGAPORE
(ICIS)–Ethane is gaining favor as the
feedstock for steam crackers in China, as its
competitive prices make ethane-cracking the
most profitable route for ethylene production
compared to other options.
OUTLOOK: High costs, peak season and global
trade barriers in China PP market for H2
2024
By Zhibo Xiao 30-Jul-24 13:00 SINGAPORE
(ICIS)–As the peak season around September and
November is coming for China PP, the cost and
demand sides are expected to give the market
strong support, while the challenges faced with
the export of China electric vehicles could
potentially hinder the demand for PP copolymer.
INSIGHT: China focuses on technological
innovation, low-carbon industries in latest
govt summit
By Amy Yu 29-Jul-24 17:21 SINGAPORE (ICIS)–We
expect that there will be two significant
developmental directions worth focusing on for
China’s petrochemical industry in the medium to
long -term view, following the main outcomes of
the 20th Third Plenum.
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Ammonia02-Aug-2024
HOUSTON (ICIS)–OCI said after facing difficult
fertilizer market conditions in 2023 it is
having a much better performance through Q2 of
this year.
The producer said they continue to see progress
in efficiency gains as it remains focused on
its global decarbonization strategy.
In addition, over the past quarter OCI said it
has taken significant steps towards advancing
its strategic aims, which include accelerating
expansion plans fueled by green methanol
adoption and further diversification their
European nitrates portfolio.
“Following extremely challenging market
conditions in 2023, conflated with prolonged
turnarounds at some of OCI’s assets, OCI
benefited in the second quarter of 2024 from
sustained improved asset reliability across the
business,” said Ahmed El-Hoshy, OCI Global CEO.
“OCI’s manufacturing excellence program and
investments to improve reliability continue to
drive productivity gains, with asset
utilization rates surpassing historical levels
across both the nitrogen and methanol complex.”
The producer said OCI Beaumont achieved a 96%
rate through Q2, while OCI Nitrogen saw both
ammonia lines running at approximately 90%
level during the quarter.
“The OCI team continues to do an outstanding
job driving forward our operational excellence
program, focused on reliability and process
safety fundamentals,” El-Hoshy said.
The producer also said their Texas Blue Clean
Ammonia facility in Beaumont is on track to
commence production in 2025.
Recycled Polyethylene Terephthalate02-Aug-2024
LONDON (ICIS)–Senior editor for recycling,
Matt Tudball, discusses the latest developments
in the European recycled polyethylene
terephthalate (R-PET) market, including:
Italian bale prices drop month on month
Blue bale prices rise in eastern Europe
Downward pressure on UK colourless flake
More demand emerging for food-grade pellets
in H2
Acrylonitrile02-Aug-2024
LONDON (ICIS)–Maritime security issues along
the Red Sea and geopolitics-led macroeconomic
challenges dominated supply-demand dynamics
within the European
acrylonitrile-butadiene-styrene (ABS) and
acrylonitrile (ACN) markets in the first half
of 2024.
In this latest podcast, Europe ABS report
editor Stephanie Wix and her counterpart on the
Europe ACN report, Nazif Nazmul, share the
latest developments and expectations for what
lies ahead.
Macroeconomic challenges continue to
constrain ABS and ACN demand
Europe-origin ABS partly supported by
imports suffering from logistical issues
Cautious optimism surrounds 2025 demand
outlook despite geopolitical uncertainty
ABS is the largest-volume engineering
thermoplastic resin and is used in automobiles,
electronics and recreational products.
ACN is used in the production of synthetic
fibres for clothing and home furnishings,
engineering plastics and elastomers.
Click here
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Polyethylene02-Aug-2024
SINGAPORE (ICIS)–Click
here to see the latest blog post on Asian
Chemical Connections by John Richardson.
Here are my three scenarios for China’s
long-term chemicals and polymers demand growth
with percentage weighting – i.e. how likely I
view each of the scenarios.
China chemicals demand grows is in the low
single digits – 40%:
Demand growth turns negative – 55%:
The market returns to previous levels of
growth – 5%.
And I am becoming more convinced that we are
entering a period of declining global chemicals
growth as well as in China.
It is what it is. This is what the
demographics, debt, climate change and
geopolitical factors seem to be telling us.
This direction of travels appears to be
supported by the latest China polypropylene
((PP) data.
The 1992-2021 Petrochemicals Supercycle is
receding further into the past.
Saudi Arabia on a year-on-year basis saw its
China PP sales turnover in China fall by an
estimated $85m in January-June 2024. This
followed $168m tonnes lower turnover in 2023
versus 2022.
South Korea’s January-June 2024 turnover fell
by $35m following a $377 decline in 2023 versus
2022.
Meanwhile, China’s PP exports are in line to
reach 2.5m tonnes in 2024, up from 1.3m tonnes
in 2023.
Companies need to respond to these secular and
long-term shifts in markets by deciding whether
they can continue to compete in commodity
chemicals.
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.
Methanol02-Aug-2024
SINGAPORE (ICIS)–SABIC’s net profit surged by
84.7% year on year to Saudi riyal (SR) 2.18
billion in the second quarter, supported by
higher margins amid improved average selling
prices, the chemicals giant said on Thursday.
in Saudi riyal (SR)
billions
Q2 2024
Q2 2023
% Change
H1 2024
H1 2023
% Change
Sales
35.72
34.1
4.8
68.4
70.53
-3.0
Operational profit
2.1
1.64
28.0
3.31
3.4
-2.6
Net profit
2.18
1.18
84.7
2.43
1.84
32.1
“The global economy experienced a slight
decline in the second quarter of 2024,
primarily due to unexpected downturns in the
recent economic indicators of major countries,”
said Abdulrahman Al-Fageeh, SABIC’s CEO and
executive board member.
However, PMI data continued to indicate
improvement in global economic conditions,
while global trade showed signs of recovery,
driven by higher exports, inventory restocking
and increased financial activities, Al-Fageeh
noted.
“As inflationary pressures ease, some central
banks have begun reducing interest rates,
potentially providing additional stimulus to
the global economy.”
Q2 KEY POINTS – Q2
sales growth primarily attributed to the
improvements of the average selling prices and
a slight increase in sales volume.
– Gross profit rose by SR1.76 billion due to
improved profit margins for key products,
partially offset by increased operating
expenses from non-recurring charges.
– A reversal of zakat provision, which is a
mandatory Islamic tax on wealth, resulted in a
non-cash benefit of SR545 million in Q2 2024,
compared to a zakat expense of SR440 million in
Q2 2023, due to updated regulations.
– The petrochemicals segment’s revenue
increased by 10% quarter-over-quarter to SR
33.33 billion in Q2, driven by higher methanol
sales volume.
– EBITDA rose 37% to SR 4.88 billion in Q2,
compared to SR 3.56 billion in Q1, due to
higher sales volume and average selling prices.
Market trends on quarter-on-quarter
basis:
– Methyl tertiary butyl ether (MTBE) prices
remained stable, supported by summer
demand.
– Methanol prices held steady, driven by tight
supply and low inventories in China, as well as
strong demand from Asia.
– Monoethylene glycol (MEG) prices were flat,
due to higher supply and stable demand.
– Polyethylene (PE) prices increased slightly,
due to delayed Middle East deliveries and
tightened Southeast Asian supplies.
– Polypropylene (PP) prices rose, supported by
tight container and vessel supply.
– Polycarbonate (PC) prices slightly increased,
despite global oversupply, with high freight
rates adding pressure to subdued demand in
automotive and construction sectors.
Separately, SABIC has successfully commissioned
its new hydrotreater plant in
Geleen, the Netherlands.
This facility plays a crucial role in SABIC’s
advanced recycling process, transforming
pyrolysis oil derived from post-consumer mixed
plastic waste into high-quality alternative
feedstock.
This feedstock is then used to produce the
SABIC’s TRUCIRCLE circular polymers.
H1 KEY POINTS
– The company’s revenue decreased by 3% year on
year primarily due to a decline in sales
volume.
– Net profit rose on the back of an 18%
increase in gross profit (SR1.96 billion) due
to improved margins, partially offset by
increased operating expenses from non-recurring
charges.
– Earnings were also supported by a SR245
million increase in the share of results from
associates and non-integral joint ventures.
OUTLOOK”Looking ahead, a
global GDP growth of 2.7% is expected in 2024.
At SABIC, our long-term focus remains on
strategic portfolio optimization, restructuring
of underperforming assets, and prioritizing
sustainability and innovation,” the company
said.
“We maintain a disciplined approach in managing
our CAPEX, projecting a spending at the lower
range of $4.0 to 5.0 billion for 2024.”
SABIC is 70%-owned by energy giant Saudi
Aramco.
Thumbnail shows a SABIC production facility
(Source: SABIC)
Ammonia01-Aug-2024
HOUSTON (ICIS)–National Oceanic and
Atmospheric Administration (NOAA) supported
scientists announced that this year’s Gulf of
Mexico “dead zone” is approximately 6,705
square miles, the 12th largest zone on record
in 38 years of measurement.
This equates to more than 4 million acres of
habitat potentially unavailable to fish and
bottom species, an area roughly the size of New
Jersey.
Scientists at Louisiana State University and
the Louisiana Universities Marine Consortium
led the annual dead zone survey from 21-26
July.
The Gulf’s hypoxic (low oxygen) and anoxic
(oxygen-free) zones are caused by excess
nutrient pollution, which researchers attribute
to being primarily from human activities such
as agriculture and wastewater occurring in the
watershed.
First documented in 1985 off the coast of
Louisiana, many researchers have primarily
placed blame on farmland fertilizer run-off as
being the main culprit of the dead zone.
Yet evidence also shows that urban areas, human
waste treatment, precipitation and atmospheric
dust as well as natural sources also contribute
large amounts.
With excess nutrients there is an overgrowth of
algae, which sinks and decomposes causing low
oxygen levels which are insufficient to support
most marine life and habitats.
The Mississippi River/Gulf of Mexico Hypoxia
Task Force, a state and federal partnership,
has set a long-term goal of reducing the
five-year average extent of the dead zone to
fewer than 1,900 square miles by 2035.
The five-year average size of the dead zone is
now 4,298 square miles, more than two times
larger than their target.
“It’s critical that we measure this region’s
hypoxia as an indicator of ocean health,
particularly under a changing climate and
potential intensification of storms and
increases in precipitation and runoff,” said
Nicole LeBoeuf, NOAA’s National Ocean Service
assistant administrator.
“The benefit of this long-term data set is that
it helps decision makers as they adjust their
strategies to reduce the dead zone and manage
impacts to coastal resources and communities.”
In June the agency had predicted an
above-average sized dead zone of 5,827 square
miles, based primarily on Mississippi River
discharge and nutrient runoff data from the US
Geological Survey.
“The area of bottom-water hypoxia was larger
than predicted by the Mississippi River
discharge and nitrogen load for 2024, but
within the range experienced over the nearly
four decades that this research cruise has been
conducted,” said Nancy Rabalais, Louisiana
State University professor.
“We continue to be surprised each summer at the
variability in size and distribution.”
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