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Gas19-Jul-2024
LONDON (ICIS)–IT issues that impacted energy
trading systems on Friday morning were
gradually being resolved, with market
participants regaining access to critical
applications.
A flawed update of cybersecurity software
CrowdStrike hit Windows operating systems, with
IT outages affecting companies across many
sectors.
This included energy trading platform Trayport
and several brokers, with trading operations
impacted.
Trayport said shortly after midday London time
it had made “significant progress in
implementing workarounds for the ongoing
CrowdStrike-related outage”.
It said its services were being restored,
including risk-based trading, and that the
group was working to bring the remaining
services back online as quickly as possible.
A German power trader told ICIS shortly after
midday London time that “all was back to
normal” and was able to access broker screens.
“It has been very bad this morning. Now
everything is working smoothly, but all
connections were down for a while,” a gas
trader added.
A broker had told ICIS earlier in the morning
that “hardly anything is working here, we are
just waiting for systems to come back.”
LIQUIDITY
Most traders contacted by ICIS reported issues
affecting their usual trading activities as
well as data used for analyzing market
fundamentals.
Some European gas and power traders said broker
screens were not available and the issue was
likely to affect liquidity throughout Friday’s
trading session.
Another added that they expected the number of
transactions to go through at the end of the
day to be down by about half.
“I can chat and agree on deals, but I cannot
put it in my system, meaning the P&L is not
updated,” said one EU gas trader in the
morning.
“There’s a lot of counterparties offline, and
those that are online are reluctant to show
prices this morning,” said an LNG trader.
Others reported fewer issues and said they
could operate as usual.
ENERGY EXCHANGES
Commenting on the status of ICE’s derivatives
markets, an ICE spokesperson told ICIS: “We are
aware of the issue and markets are fully
operational. We are in close dialogue with our
customers on whether and how they’re impacted”.
Earlier in the session, the European Energy
Exchange (EEX) reported in a message to trading
participants that customers using Trayport
services were potentially facing technical
problems.
“Customers may observe problems to login or to
trade via Trayport due to infrastructure issues
with a third-party service provider,” EEX said.
EEX also offered its assistance to customers
for removing orders or trading on behalf.
European power exchange EPEX SPOT, which is
part of EEX, told ICIS that issues with the
Spanish OMIE short-term trading platform, which
caused a partial decoupling of markets on
Friday morning, were not related to the global
IT issues. It confirmed that all other European
day-ahead power auctions were running to plan
and order book closures were happening on time.
Trading across the Nord Pool exchange was not
impacted, a spokesman confirmed, and added that
it was monitoring the situation closely.
Spanish gas exchange MIBGAS also told ICIS it
has not been affected by the outage.
The electronic capacity trading platform RBP,
owned by the Hungarian gas transmission system
operator FGSZ Natural Gas Transmission, said it
had not been impacted.
IMPACT ON ENERGY COMPANIES
Several energy companies contacted by ICIS did
not report issues related to the global IT
incident and were monitoring the situation.
Spanish gas system operator Enagas told ICIS it
“is not vulnerable because it does not have the
impacted software installed, but an analysis is
being carried out to foresee any eventual
impact”.
“As far as we’re aware, everything has been
fine here relating to the outages and we are
not aware of any issues in the LNG shipping
market making an impact,” a UK-based shipbroker
told ICIS.
Other LNG shipping sources have also so far
said they have noted no impact on terminals or
shipping operations.
Belgian gas system operator and LNG terminals
operator Fluxys told ICIS “there have been some
very minor issues without any real effect on
flows”. The issues related to the “impact on
the systems of our [external] partners.”,
Fluxys’ subsidiaries include Dunkerque LNG and
Zeebrugge LNG.
ICIS contacted other major European LNG
operators and global energy companies but
received no replies by the time of publishing.
Gas19-Jul-2024
LONDON (ICIS)–Gas In Focus editor Katya
Zapletnyuk and deputy editor Marta Del Buono
discuss the surge of populist movements in
recent EU and member state elections and its
impact on energy markets.
Europe has been hurt by the energy crisis and
high energy costs are driving businesses to
other parts of the world. Consumers are
demanding a focus shift from climate targets to
competitiveness and security.
Click
here to watch
Gas19-Jul-2024
LONDON (ICIS)–Companies including financial
services were hit by a global IT outage on
Friday, with disruptions partly affecting
energy trading.
The chemicals sector currently appears
unaffected though Poland’s largest container
terminal, the Baltic Hub in Gdansk, was
reportedly having some issues.
Trayport, a key data platfrom for European
wholesale energy markets, issued a statement
warning the outage was affecting some of its
key services.
“We are currently facing infrastructure issues
due to a global outage with a third-party
service provider” Trayport said in a statement.
Trayport added it was currently implementing
workarounds, and customers may begin to see
some of Trayport services become available.
“We continue to work closely with the vendor to
resolve the situation as soon as possible,” it
added.
ICIS continued to receive trade information on
European gas and power markets spread across
multiple trading venues.
However, traders contacted by ICIS reported
issues:
“Servers are not accessible for the moment. We
can trade but not book deals,” one trader said.
A power trading source has said systems were
unaffected in some countries.
A gas trader in northern Europe said that some
brokers were impacted, but that major exchange
platforms were functioning as usual. Some
trading companies are also faced internal IT
issues.
European power exchange EPEX SPOT reported a
partial decoupling on the OMIE area, which
includes Spanish and Portuguese power markets,
for the IDA3 auctions, although it did not
indicate whether it was related to the global
IT outage. But the group reported a normal
market status for most other markets and order
book closures were also reported as being on
time.
Additional reporting by Clare
Pennington
Global News + ICIS Chemical Business (ICB)
See the full picture, with unlimited access to ICIS chemicals news across all markets and regions, plus ICB, the industry-leading magazine for the chemicals industry.
Recycled Polyethylene Terephthalate19-Jul-2024
LONDON (ICIS)–Senior editor for recycling Matt
Tudball discusses the latest developments in
the European recycled polyethylene
terephthalate (R-PET) market, including:
Bullish outlook for eastern Europe bales
and flake
Upwards pressure appearing when market
usually quietens down for summer
Wider market expects bale supply to improve
during August
Outlook from September onwards still
uncertain
Gas19-Jul-2024
Additional reporting by Clare
Pennington
LONDON (ICIS)–Companies including financial
services were hit by a global IT outage on
Friday morning, with disruptions partly
affecting energy trading.
Trayport, a key data platform for European
wholesale energy markets, issued a statement
warning the outage was affecting some of its
key services.
“We are currently facing infrastructure issues
due to a global outage with a third-party
service provider” Trayport said in a statement.
Trayport added it was currently implementing
workarounds, and customers may begin to see
some of Trayport services become available.
“We continue to work closely with the vendor to
resolve the situation as soon as possible,” it
added.
ICIS continued to receive trade information on
European gas and power markets spread across
multiple trading venues.
However, traders contacted by ICIS reported
issues:
“Servers are not accessible for the moment. We
can trade but not book deals,” one trader said.
A power trading source has said systems were
unaffected in some countries. A gas trader in
northern Europe said that some brokers were
impacted, but that major exchange platforms
were functioning as usual. Some trading
companies are also faced internal IT issues.
European power exchange EPEX SPOT reported a
partial decoupling on the OMIE area, which
includes Spanish and Portuguese power markets,
for the IDA3 auctions, although it did not
indicate whether it was related to the global
IT outage. But the group reported a normal
market status for most other markets and order
book closures were also reported as being on
time.
ICIS is monitoring the ongoing disruptions and
the impact on markets and will provide regular
updates in the coming hours.
Crude Oil19-Jul-2024
SINGAPORE (ICIS)–Malaysia’s economy grew by
5.8% year on year in the second quarter, driven
by stronger exports and an expansion in the
services sector, official advance estimates
showed on Friday.
The second-quarter GDP print follows the
stronger-than-expected annual growth of 4.2% in
the first quarter of 2024, the Department of
Statistics said in a statement.
Manufacturing for the period posted a stronger
annualized growth of 4.7% compared with the
1.9% pace set in the first quarter.
On a quarter-on-quarter basis, Malaysia’s
economy grew by 0.7% in April-June, reversing
the 3.1% contraction registered in Q1.
Q2 exports grew faster by 5.8% year on year to
ringgit (M$) 368.8 billion ($84 billion),
compared with the 2.0% growth in the previous
quarter.
Malaysia’s services sector expanded
by 5.6% year on year in the second
quarter, accelerating from the 4.7% expansion
in the first three months of 2024.
In H1, the country’s GDP growth averaged 5.0%,
stronger than the 4.1% growth posted in the
same period last year.
Malaysia is southeast Asia’s fifth-largest
economy and a net exporter of polyolefins.
The country is also one of the largest
producers and exporters of oleochemical
products worldwide, contributing about 20% to
global capacity, according to the Malaysian
Petrochemicals Association (MPA).
($1 = M$4.67)
Thumbnail image: Petronas Towers in Kuala
Lumpur, Malaysia (Source:C F
Tham/AP/Shutterstock)
Polyethylene19-Jul-2024
SINGAPORE (ICIS)–Click
here to see the latest blog post on Asian
Chemical Connections by John Richardson.
The slide in today’s post is an updated version
of the slide I first published late last year.
Note that there is a new scenario added to the
original two, A Bi-polar World.
I could be wrong, of course. I might have given
the wrong weightings to each of the scenarios,
or more simply have chosen the wrong scenarios
entirely. But today’s events point to very
different outcomes than we saw during the
1992-2021 Petrochemicals Supercycle.
Supermajors – 25%
probabilityA small number of
oil-and-gas-to-petrochemicals players dominate
the business as they have increasingly turned
oil and natural-gas liquids into petrochemicals
at competitive costs. This is in response to
the decline in crude-oil demand into
transportation fuels because of the
electrification of vehicles.
Non-integrated petrochemical producers in
Europe, South Korea, Singapore, Taiwan and
Southeast Asia consolidate. Large swathes of
capacity closes-down in these countries and
regions to balance markets.
A Bi-Polar World – 50%
probabilityThe split between
China and the US, and possibly the EU as well,
widens.
The rest of the developed world, including
major petrochemical players in countries such
as South Korea, Singapore and Japan, will need
to decide where they stand: With the US and its
partners or with China and its partners. They
are at risk of losing access to the China
market.
Petrochemicals trade is largely confined to
between China and its partners and between the
US and its partners.
No one scenario will be completely right. We
could end up at any of many points between each
of these three extreme outcomes.
This is the case with Supermajors and A
Bi-polar World. It could be that the closer
relationship between Saudi Arabia and China
allows Saudi Arabia to supply more of China’s
petrochemicals deficits, allowing the Kingdom
to perhaps realise some of its
crude-oil-to-chemicals ambitions.
A De-globalised World – 25%
probabilityMarkets are in
general much more regional. Instead of just a
bi-polar world, we end up with
beggar-thy-neighbour trade barriers similar in
scale to the ones which led to the Great
Depression.
Petrochemical companies become much more “local
for local”. Governments put up barriers to
protect jobs and to ensure refineries don’t
shut down along with uncompetitive
petrochemical plants, thereby by protecting
local supplies of transportation fuels.
While extreme outcomes help push people out
their comfort zones, supporting local
petrochemical companies might instead fit at
some mid-way point between all the scenarios.
And “local for local” shouldn’t be viewed as
automatically a bad thing. One can argue that
because of today’s highly uncertain
geopolitical world, local supplies of at least
some petrochemicals are essential.
Calling all senior management teams out there:
You need to prepare your teams for the world
after the Petrochemicals Supercycle.
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.
Ammonia18-Jul-2024
LONDON (ICIS)–On 11 July the first auction
results from the German H2Global programme were
released, providing the European hydrogen
market critical information on the green
premium across the supply side as ammonia
participants switch to lower-carbon, cleaner
products.
H2Global is a double auction system that
procures international volumes of hydrogen and
re-sells them domestically, providing a subsidy
based on how low the sell price of the market
is against how high the buy price is.
ICIS has produced the following infographic to
contextualise the update.
Speciality Chemicals18-Jul-2024
LONDON (ICIS)–Ursula von der Leyen on Thursday
secured her re-election to a second five-year
term as President of the European Commission,
and identified competitiveness as the most
pressing issue facing the EU.
Following a June European parliamentary
election season that saw liberal and centrist
political blocs hold on to majority power but
cede ground to right-wing and Eurosceptic
parties, von der Leyen’s position as leader of
the bloc was reaffirmed on 18 July.
A total of 401 Ministers of European Parliament
(MEPs) backed von der Leyen’s candidacy,
equating to roughly the number of members
linked to the centrist European People’s Party,
left-wing Progressive Alliance of Socialists
and Democrats, and liberal group Renew
Europe.
A total of 360 votes in favour of von der Leyen
were necessary to secure a majority. Of the 719
total MEPs, 284 voted against her, and 22
submitted blank or invalid votes, according to
European Parliament.
Chemicals sector representatives have expressed
hopes that the next term of the European
Parliament will feature a stronger focus on
industrial competitiveness, in light of the
impact of high energy prices on the long-term
viability of some sectors.
““If you read the State of the Union, there are
a number of statements which clearly indicate
industry policy is back, that it will get, if
not the deepest political priority, as there
are issues like Ukraine, it will get political
priority in the next commission,” Cefic
director general Marco Mensink said, speaking in
October 2023.
The impact of higher energy prices on operating
costs and the rollout of more cash-heavy
subsidy frameworks elsewhere, such as the US
Inflation Reduction Act, have intensified
pressure on European industry.
“Our competitiveness needs a major boost,” von
der Leyen said, addressing MEPs earlier on
Thursday.
“The fundamentals of the global economy are
changing. Those who stand still will fall
behind. Those who are not competitive will be
dependent. The race is on and I want Europe to
switch gear,” she added.
This push on competitiveness is likely to be
focused on reducing the administrative burden
on companies in the region and prioritising
faster permitting, she added.
Von der Leyen also intends to launch a Clean
Industrial Deal within the first 100 days of
her new term, she added, to channel investment
in infrastructure and industry decarbonisation,
particularly for energy-intensive sectors.
Germany-based chemicals trade group VCI
welcomed von der Leyen’s re-election, but
warned that Europe is at a crossroads in terms
of its future trajectory.
“We are at a turning point that will decide the
future of Europe. Will we manoeuvre ourselves
further into the side lines as a business
location or back on the road to success? The
new Commission must act decisively to balance
sustainability and industrial competitiveness,”
said VCI CEO Wolfgang Grosse Entrup.
No deviation is expected in the bloc’s 2030 and
2050 decarbonisation goals, despite growing
murmurs that the EU is not on track to meet the
2030 targets with just over six years still
remaining to build out infrastructure.
“So I want to be clear. We will stay the course
on our new growth strategy and the goals we set
for 2030 and 2050. Our focus now will be on
implementation and investment to make it happen
on the ground,” von der Leyen added.
Focus article by Tom
Brown.
Thumbnail photo: Ursula von der Leyen,
speaking in Strasbourg, France, after winning
re-election as European Commission President on
18 July 2024. (Source: Ronald
Wittek/EPA-EFE/Shutterstock)
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