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Gas07-Jan-2025
Additional reporting by Aura Sabadus
LONDON (ICIS) — On 1 January 2025, Russian gas
transit flows via Ukraine stopped amid the
expiry of a five-year agreement between the two
countries which have been in conflict since
February 2022.
The transit stop has been the base case view of
the majority of market participants and it was
priced in well before 1 January 2025.
Therefore it had little impact on European gas
and
power prices in recent sessions.
Despite the expectation that flows would cease
to transit Ukraine, the end of the agreement
resulted in an immediate supply drop to the
Czech Republic and Austria.
However, the scrapping of the German storage
levy from 1 January 2025 incentivized flows
from Germany to the region, partly offsetting
the supply drop via Ukraine.
The below infographic shows the shift in flows
to the region after the transit halt on 1
January, drawing a comparison between flows on
31 December 2024 and on 3 January 2025 across
the key interconnection points.
In particular, the halt to the Russian gas
transit through Ukraine halted flows to
Slovakia and Moldova, and therefore from
Slovakia to the rest of the region.
Conversely, German gas exports to Czech
Republic and to Austria increased to offset the
drop in Russian gas flows reaching the region
via Ukraine.
Romanian exports also increased to support
Moldova’s gas supply, as flows from Ukraine
ceased.
Nevertheless, ICIS data also indicates that
since 2022 a strong LNG supply intake has
rapidly replaced the drop in Russian gas flows
to Europe, with flows via Sudzha remaining
among the latest available Russian volumes via
pipeline reaching Europe until 31 December
2024.
Currently the only remaining source of Russian
gas supply via pipeline is the TurkStream2 gas
corridor, transiting via Turkey and delivering
gas to Europe through the Bulgarian and Serbian
infrastructure up to Hungary.
Europe still receives Russian gas in the form
of LNG supplies.
ICIS ANALYSTS VIEWS
“We expect gas storage withdrawals to be strong
in the first quarter of 2025 and we will have a
close look at them. ICIS Gas Foresight expects
Austrian storage to deplete from current 80%
levels towards 63% in April 2025 in the new
base case absent Ukrainian gas transit” ICIS
gas analyst Andreas Schroeder said.
ICIS data showed that EU gas storages were 66%
full as of 6 January.
“LNG imports to Europe should increase again
after a relatively weak 2024. Austrian OMV has
secured capacity at LNG terminals to provide
Austria with gas via Germany” Schroeder added.
Security of supply in Europe is guaranteed and
ICIS Gas Foresight estimates that LNG imports
into the eleven EU countries considered in the
model (Austria, Belgium, Czechia, France,
Germany, Hungary, Italy, Netherlands, Poland,
Slovakia and Spain) plus Great Britain will
increase year on year by 232TWh (15 million
tonnes of LNG or 21bcm) in 2025. In January,
LNG imports are set to increase 7% year on
year.
ICIS Gas Foresight forecasts the fullness level
for the EU11+GB region to fall by 12 percentage
points month-on-month by the end of January.
On European power markets, increases in the gas
price will likely be reflected in increased
power prices, particularly in those countries
where gas-fired generation is still a large
component of the power supply mix.
“For the February ‘25 contract across pretty
much all European power markets we saw prices
higher on 21 November 2024 than they were on 2
January 2025. The primary reason for this is
that coal prices have fallen since that point”
ICIS power analyst Matthew Jones said.
“Electricity flows from Slovakia to Ukraine
continued on 2 January, which is relevant as
Slovakia’s PM Fico had threated to stop flowing
power to Ukraine in the event of no new gas
deal. Slovakia tends to export to Ukraine, so
stopping those flows would have been bearish
for Slovakian power prices” Jones added.
Acrylic acid07-Jan-2025
HOUSTON (ICIS)–Mitsubishi Chemical Corp (MCC)
said on Tuesday it has decided not to proceed
with its planned 350,000 tonne/year methyl
methacrylate (MMA) project at Geismar,
Louisiana.
The company failed in negotiations with
customers “to obtain long-term commitments on
transactions,” it said.
MCC expects to be able to meet immediate demand
with existing MMA monomer manufacturing
facilities in Tennessee and elsewhere, it said.
“Global demand for MMA monomer exceeds three
million tonnes annually, and stable market
growth is expected to continue,” it added.
The Geismar project, announced in December
2020, would have used ethylene derived from US
shale gas.
MCC had acquired a construction site at Geismar
and was working on the project’s engineering
design and on obtaining permits and approvals.
The company expects to record a loss of about
Japanese yen (Y) 20 billion (US$127 million) in
connection with the decision not to proceed
with the project, it said.
Meanwhile, MCC would continue to optimize its
global production system by establishing new
business locations and consolidating existing
ones to boost the competitiveness of its MMA
business, it said.
(US$1=Y158)
MMA is used in the manufacture of
polymethyl methacrylate (PMMA), acrylic sheets,
surface coatings, emulsion polymers and
adhesives. Photo by Rudi
Sebastian/imageBROKER/REX/Shutterstock
Ethylene07-Jan-2025
SINGAPORE (ICIS)–Click
here to see the latest blog post on Asian
Chemical Connections by John Richardson.
One of the arguments still doing the rounds out
there is that this year will mark the turning
point as global petrochemicals operating rates,
margins and spreads recover.
As they say, good luck with that idea. As
today’s blog discusses in detail:
In 2024 over 2023, China’s ethylene
capacity exceeding local demand is estimated to
have fallen by 1.6m tonnes. But in 2025
compared with 2024, it is forecast to increase
by 6.3m tonnes to an all-time high of 11.5m
tonnes. This would represent a year-on-year
increase of 121%. Actual capacity is due to
increase by 9m tonnes in 2025 over 2024, the
biggest annual increase on record.
Propylene oversupply is far worse
reflecting the several routes to make propylene
other than just the steam cracker – the only
major route to produce ethylene. In 2024 over
2023, propylene capacity exceeding demand was
at 2.7m tonnes. This year compared with 2024
oversupply is expected to reach 7.4m tonnes.
Capacity exceeding demand is forecast to total
20.3m tonnes in 2025, 179% higher than in 2024.
Annual capacity is due to increase by 9.6m
tonnes in 2025 or 2024, which would again by
the biggest annual increase on record.
China’s global shares of capacity exceeding
demand are also forecast to jump in 2025 as it
overtakes all the other regions.
One saving grace might be that increased trade
protectionism prevents China from exporting its
surplus ethylene and propylene molecules,
either directly as derivatives or indirectly as
packaging for or components of finished goods.
This might create more regional markets and
force China to delay start-ups.
But it seems more likely to me that there will
just be a shuffling of the pack as more Chinese
manufacturing moves offshore to bypass tariffs.
You might think that the other “get out of jail
for free” card will be a rebound in Chinese
domestic demand.
Again, good luck with that idea because of the
end of the real estate bubble and China’s
demographics crisis.
So, here is another prediction for 2025: Global
petrochemicals operating rates, spreads and
margins will decline versus last year because
for the scale of China’s capacity additions and
the country’s continued ability to export its
excess molecules, either directly or
indirectly.
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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Gas06-Jan-2025
LONDON (ICIS)–On 1 January 2025, Russia
stopped gas supplies to Transnistria after
failing to make alternative arrangements to
deliver gas to the province on the left bank of
the river Nistru.
Although Moldova, on the right bank, has
diversified its gas portfolio away from Russian
imports, it still depends on electricity
produced in Transnistria using gas from Russia,
resulting in a shift to the supply-demand
balance of the area, while risking further
power and gas shortages across the region.
ICIS energy market expert Aura Sabadus speaks
with Sergiu Lica and Eugeniu Bot, heads of
natural gas and electricity departments
respectively at the Moldovan state wholesaler
Energocom, to discuss the options that are
available to stave off tightness in supply over
winter and beyond.
Ethylene06-Jan-2025
HOUSTON (ICIS)–Here are the top stories from
ICIS News from the week ended 3 January.
OUTLOOK ’25: US acetic acid, VAM
exports expected stronger, domestic demand
could rise
US acetic acid and vinyl acetate monomer
(VAM) supply heading into 2025 is improving
after production outages resolved, while
tight global supply is expected to boost
export demand and lower inflation may lead to
stronger domestic demand.
OUTLOOK ’25: US EG/EO demand expected
higher in 2025; turnarounds to tighten Q1
supply
Demand for US ethylene glycol (EG) and
ethylene oxide (EO) should increase in 2025
on restocking and if lower inflation drives
consumption, but this may be met with tight
supply in Q1 due to plant maintenance.
OUTLOOK ’25: US President Trump could
move quickly on tariffs,
deregulation
As US president, Donald Trump could quickly
proceed on campaign promises to impose
tariffs and cut regulations after taking
office on 20 January.
SHIPPING: Union dockworkers, ports to
resume negotiations ahead of 15 Jan
deadline
Union dockworkers and representatives for US
Gulf and East Coast ports are expected to
resume negotiations on a new master contract
on 7 January, just more than a week ahead of
the 15 January deadline.
OUTLOOK ’25: US methanol supply
expected tight in Q1, demand may pick up
mid-year
US methanol supply is tight heading into the
new year, a situation that has been offset by
lackluster demand, but demand is expected to
pick up farther into 2025 if more controlled
inflation and lower interest rates fuel
consumer spending and the housing market.
Speciality Chemicals06-Jan-2025
SAO PAULO (ICIS)–Here are some of the
stories from ICIS Latin America for the week
ended on 3 January.
NEWSBrazil’s manufacturing
loses steam as new orders slow at home and
abroadGrowth in Brazil’s
petrochemicals-intensive manufacturing
sectors slowed down considerably in December
on the back of lower new orders and
households’ squeezed budgets on rising
inflation and high borrowing costs, analysts
at S&P Global said on Thursday.
Brazil economists
expect weaker real, higher interest rates in
2025Brazilian economists
surveyed by the central bank do not expect
the depreciation in the real in past weeks to
stay for much of 2025, with interest rates
consequently expected at nearly 15%.
Mexico manufacturing
sector ends 2024 in contraction on domestic,
overseas woesMexico’s
petrochemicals-intensive manufacturing sector
concluded 2024 in contraction on the back of
lower new orders and acute woes in the
export-intensive automotive sector, analysts
at S&P Global said on Thursday.
Colombia manufacturing
falls into contraction on China competition,
squeezed
consumersColombia’s
petrochemicals-intensive manufacturing sector
fell into contraction at the end of 2024 as
consumers’ squeezed pockets put a dent in
demand and competition from Chinese products
increased, analysts at S&P Global said on
Thursday.
Chile’s manufacturing
up 1.9% in November, industrial output 1.7%
higherChile’s
petrochemicals-intensive manufacturing
sectors posted output growth of 1.9% in
November, year on year, the country’s
statistical office INE said on Tuesday.
Argentina’s YPF
high crude production costs offset by stable
operations, growing output –
Fitch
YPF remains one of the country’s economic
hopes for coming years, with output and
exports expected to grow, but Argentina’s
state-owned energy major’s production costs
remain higher than regional peers, US credit
rating Fitch said on Friday.
Argentina’s YPF
divests lubricants subsidiary in Brazil to
UsiquimicaArgentina’s
state-owned oil and gas major YPF has signed
an agreement to sell its Brazilian lubricants
subsidiary to local chemicals producer
Usiquimica.
PRICINGLatAm PE prices
unchanged on weak market
activityDomestic and
international polyethylene (PE) prices were
assessed as unchanged across Latin American
countries.
LatAm PP prices stable
on muted market
activityDomestic and
international polypropylene (PP) prices were
assessed unchanged across Latin American
countries.
Unigel seeks January PS
price increase in
BrazilUnigel has announced
a 15% price increase, excluding local taxes,
on all grades of polystyrene (PS) sold in
Brazil, as of 2 January 2025, according to a
customer letter.
Innova announces
January PS price increase in
BrazilInnova has announced
a 15% price increase, excluding local taxes,
on all grades of polystyrene (PS) sold in
Brazil, effective 1 January 2025, according
to a customer letter.
Speciality Chemicals06-Jan-2025
BARCELONA (ICIS)–The Eurozone economy
continues to be troubled, with new purchasing
manager indices (PMIs) showing a slight overall
deterioration as a strong services performance
was offset by poor manufacturing at the end of
the year.
The HCOB Eurozone Composite PMI for December
2024 indicated a marginal decline in the
eurozone economy, with the Output Index at
49.6, up from November’s 48.3 but still below
the 50 mark which separates expansion from
contraction.
The Services PMI
Business Activity Index rose to 51.6 from 49.5,
showing a modest recovery in the sector, while
manufacturing continued to decline sharply.
The eurozone faced sustained declines in new
business and employment, with inflationary
pressures intensifying. Despite this,
business confidence improved to a three-month
high.
Germany, France and Italy all saw reductions in
business activity, with France performing the
worst. However, Spain and Ireland expanded,
with Spain’s private sector output growing at
the fastest pace since March 2023.
New orders in the eurozone fell for a seventh
consecutive month, driven by a significant drop
in factory sales, while services saw a slight
increase in new business. Export demand also
decreased, continuing a near three-year
decline.
Employment fell in December, with the
manufacturing sector driving job losses, while
services saw a fractional increase in
headcount. Despite lower staffing, companies
reduced their work-in-hand volumes. Price
pressures accelerated with input costs rising
at the fastest pace since July, particularly in
the services sector, leading to higher output
charge inflation.
Business sentiment improved, with growth
expectations for the coming year reaching a
three-month high, although it is still below
the historical average.
Cyrus de la Rubia, chief economist at Hamburg
Commercial Bank, noted that services inflation
remains high, likely due to rising wages, and
suggested cautious monetary policy with small
interest rate cuts in early 2025.
He highlighted that while the service sector
showed resilience, the overall economic outlook
remains fragile, with industrial weakness
posing a risk.
The economist added, “Service providers have
maintained their confidence, with future
business prospects largely positive and even
improving in December, despite the index
measuring sentiment being below the long-term
average.”
Speciality Chemicals06-Jan-2025
LONDON (ICIS)–Here are some of the top
stories from ICIS Europe for the week ended 3
January.
Europe PX demand to
remain downbeat in H1 2025 amid downstream
rationalizations, imports
Paraxylene (PX) demand pessimism in Europe is
expected to continue in the first half of
2025 due to the rationalization of downstream
purified terephthalic acid (PTA) plants in
the region.
Europe PMMA hoping for
demand growth, but bracing for stagnant
market
The Europe polymethyl methacrylate (PMMA)
market is bracing for 2025 to be “more of the
same” with the challenges of 2024 continuing.
Europe BDO demand
pessimism to continue under the gloom of
rising capacities in China
There is a growing sense of apathy among
players in the European butanediol (BDO)
market when it comes to discussing demand
hopes for 2025 as there are no expectations
of an uptick and there is a prevalence of
worry ahead of growing capacity in China in
an already oversupplied market.
Europe PP players eye
pain points from old plants, tariff threats
and limp manufacturing
2024 was dominated by supply-driven dynamics
and 2025 looks unlikely to be much different
for Europe’s polypropylene (PP) market.
Gas06-Jan-2025
SINGAPORE (ICIS)–Here are the top stories
from ICIS News Asia and the Middle East for
the week ended 3 January.
OUTLOOK ’25: Asia
acetic acid supply glut to balloon on
capacity expansion
By Hwee Hwee Tan 30-Dec-24 11:00 SINGAPORE
(ICIS)–Asia acetic acid supply is likely to
outstrip demand on the back of China’s
significant capacity growth into 2025,
prompting producers to review regional plant
run rates and supply contracts.
OUTLOOK ’25: Asia ABS,
SAN to start year on upbeat note
By Angeline Soh 31-Dec-24 11:00 SINGAPORE
(ICIS)–The acrylonitrile-butadiene-styrene
(ABS) and styrene acrylonitrile (SAN) markets
in Asia are expected to start the new year on
an upbeat note after festivity-driven trades,
amid caution about possible tariffs on
exports to the US.
OUTLOOK ’25: Volatile
feedstock to weigh on Asia fatty alcohol
mid-cuts in Q1
By Helen Yan 02-Jan-25 11:00 SINGAPORE
(ICIS)–Buyers and sellers of fatty alcohols
mid-cuts in Asia are expected to tussle over
the market’s trajectory in the first quarter
of 2025 amid volatile feedstock palm kernel
oil (PKO) prices.
Singapore Q4 economy
grows 4.3%; whole-year GDP rises
4.0%
By Jonathan Yee 02-Jan-25 11:45 SINGAPORE
(ICIS)–Singapore’s GDP rose 4.3% in the
fourth quarter of 2024, supported by an
increase in public sector construction
output, official advance estimates showed on
Thursday.
S
Korea GDP forecast cut amid political
uncertainty, trade headwinds
By Nurluqman Suratman 02-Jan-25 14:38
SINGAPORE (ICIS)–South Korea’s finance
ministry on 2 January slashed the country’s
2025 GDP growth forecast to 1.8% from a
previous projection of 2.6% amid growing
domestic demand and trade uncertainties.
OUTLOOK ’25: Asia
methanol demand still uncertain amid new
capacities
By Damini Dabholkar 03-Jan-25 11:00 SINGAPORE
(ICIS)–The outlook for methanol in Asia
continues to be uncertain, with factors such
as additional capacity, seasonal gas issues
and upcoming downstream demand expected to
play a role in this.
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