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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
to open in a new window
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.
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.”
Speciality Chemicals01-Aug-2024
LONDON (ICIS)–The Eurozone manufacturing
sector remained in deep contraction in July,
with a steep decline in new orders leading to
further contractions in output, and producers
unable to pass on higher costs to customers
The purchasing mangers’ index (PMI) for the
sector stood at 45.8 in July, unchanged from
June, while input prices saw the fastest
increase in a year and a half, according to
data from S&P Global.
New orders are shrinking at the fastest rate in
three months, while job shedding has continued
for four months, with workforce reductions
accelerating to the fastest pace since last
December.
A PMI above 50.0 indicates growth, while below
50 signals contraction. Hopes for overcoming
the production slump have faded, prompting
Hamburg Commercial Bank chief economist Cyrus
de la Rubia to suggest a likely reduction in
the GDP growth forecast from 0.8%.
Greece and Spain, previously strong performers,
saw growth slow to seven- and six-month lows of
53.2 and 51.0, respectively. Ireland’s
manufacturing sector remained broadly in growth
territory, at 50.1, while the Netherlands,
Italy, France, Germany and Austria were all in
contraction territory .
However, purchasing activity trimmed more
gently in July compared to June, and supplier
performance improved.
Factory goods prices remain stable, suggesting
firms are absorbing costs. This, along with
weakening demand, is expected to shrink profit
margins and investments, potentially keeping
inflationary pressures in check.
The manufacturing sector faces challenging
months ahead with no signs of improvement.
Ethylene01-Aug-2024
MADRID (ICIS)–EU measures to prop up its
industrial fabric are going in the right
direction, with some key demands of the
chemicals industry now worked into regulation.
Still, more is needed if the 27-country bloc is
to salvage what remains of its thriving
industrial region, according to Juan Labat,
director general at Spain’s chemicals trade
group Feique.
Labat said moves to slow the implementation of
the Green Deal are not destined to kill the
plan in all but name. He said chemicals remain
fully behind the spirit of the Deal, but
pointed out that some of its time frames are
too tight.
In Spain, the cabinet is preparing an
Industrial Policy regulation to be passed after
the summer recess in Parliament: Labat praised
the law – if anything, because it is the first
of its nature in four decades, he said.
In the second part of this interview to be
published on 2 August, Labat expands on good
fortune favoring Spain’s chemicals. The
industry is displaying robust growth, despite
the many challenges the global economy has
faced in the past four tumultuous years, with
Spanish unemployment falling and consumer
spending strong.
The second part will also touch on Feique’s
relationship with the main chemicals trade
unions. Chemicals is in Spain almost an
exception in which entrepreneurs and their
workers tend to largely agree on collective
bargaining as well as demands they take to the
government as a sector. There was an exception
this year where a small dispute on wages ended
in the National Court with the judge ruling in
favor of workers.
THE EU UMPTEEMTH INDUSTRIAL
PLANThose who follow the EU’s
industrial policies – admittedly, not an
attention catching topic for most Europeans but
such an important one as the region is aiming
to lead the green economy in coming decades –
may recall how in 2022 when the US passed the
Inflation Reduction Act (IRA). This move by the
US threw its EU neighbour across the Atlantic
off guard.
At the stroke of a pen at the Oval Office and a
budget of slightly more than $300 billion
dollars – small compared to some of the EU’s
plans in the past four years – the US swung its
doors open to large green investments.
The US, of course, also benefits from lower
energy costs thanks to its renewed status as a
global producer of crude oil and natural gas.
The US’s IRA and China’s focus to heavily
subsidize sectors such as solar energy and
electric vehicles (EVs), making them world
leaders, forced the EU to wake up to the fact
that its Green Deal, a decent attempt at least
on paper to fight climate change, needed some
tweaks here and there.
One big tweak, long demanded by the industry,
has been the so-called contracts for
difference, which Labat praised as they
contemplate state support for companies while
they drop old polluting technologies and adopt
new ones, where costs are still much higher.
But Labat was not that positive about the
overall implementation of the Green Deal which,
as so many EU stories before it, kept being
changed by Members of the European Parliament
(MEPs) or even by the European Commission which
had approved the initial Green Deal in its role
as the EU’s executive branch.
Labat is sanguine about, for example, changes
to the deadlines in which polluting
technologies must be phased out by, which
overall creates high uncertainty for many
businesses which want to go greener but are
fearful of failing along the way if the public
authorities and their regulations are unstable.
“What we saw, for example, with Green Deal
targets for certain technologies to be phased
out by 2035, which soon after the Deal’s
passing were changed to 2033: that is simply
not serious and the opposite of legal
certainty,” said Labat.
“We want to go greener, but it would help if
the authorities understood the huge undertaking
this will mean. And, obviously, companies in
our sector don’t work out their capex plans
with just a short or medium term in mind: those
assets are planned for several decades.”
In perhaps a sign the pendulum is swinging, the
EU or some of its members at least find itself
mulling the delay of some of those initially
very ambitious targets. After years in which
the chemicals’ lobbying in Brussels seem to
fall on deaf ears, trade group Cefic and its
national association feel vindicated, finally.
Labat was asked, however, if delaying targets –
which potentially could be delayed again and
again, according to the circumstances – is not
pure and simple giving up on the Green Deal,
which foresaw a net-zero EU economy by 2050.
“Absolutely not – we are still very much behind
the Green Deal. But I think the world of 2020
looks very different to the one now, just four
years in, and more and more people are agreeing
that some short timeframes to face out
technologies were impossible and, in the end,
could hurt the industry in the EU more than
benefit it,” said Labat.
“The Green Deal is a good framework, but for it
to succeed it cannot be changed practically
every month: that only creates uncertainty and
I fear if that’s the norm, more and more may
decide to set camp elsewhere with their green
capital expenditures [capex]. We have a Green
Deal, with clear objectives, let’s work on it,
let’s develop it – but don’t keep changing it
all the time.”
The Green Deal did look very good on paper –
less good seem to have been the implementation
policies linked to it, said Labat.
The ‘contracts for difference’ apart, Labat
said the EU still must understand the industry
needs better and work on energy costs, which
remain the highest among the large world’s
chemicals producers.
SPAIN NOVELTY: AN INDUSTRIAL
POLICYThe Spanish governments in
office in the 1990s and 2000s did not have
industry as a key sector to protect and prop
up, the world’s own dynamics not helping either
as many companies thought at the time moving
production to cheaper Asian countries – China –
was simply too good of a business plan.
Spain rested on its laurels in industrial
policy, while witnessing and ripping the
benefits of its services-heavy economy: its
tourism prowess being the prime example and a
sector which, year after year, hits records.
Over the past 30 years, the tourism sector has
more than doubled. In 1995, 33 million visitors
visited Spain. By 2023, 85 million did so.
This
news story by Spanish financial newspaper
Expansion shows the data.
But many in Spain see tourism also as a curse.
Many economists say that for a country’s
economy to be successful, its manufacturing
sectors should account for 20% of its output.
Many countries in the EU – France and Spain two
of them – have seen their industrial sectors
fall to levels of around 10-13% in the past
three decades.
There comes in the current coalition cabinet of
the center-left Socialist Party and the
far-left Sumar party: industrial workers are
supposed to be one of its main constituencies,
so scoring goals on that front is in their own
interest.
The cabinet and chemicals are on the same page
on this one, although Labat recognized the fact
that an Industrial Policy in itself is a
novelty and, because of that, the way it is
implemented will be key and success is not
guaranteed.
Overall, Feique likes what he is hearing.
“There have been so many Industrial Policies
which ended up literally not being worth the
paper they were written on. And I think that’s
linked that many of them generated frustration
among those they were aimed at. Also, many of
them seemed to fail to grasp that an
‘industrial policy’ worth the name must be
transversal and practically have involved all
ministries and authorities: it cannot be small,
scattered measures here and there,” said Labat.
“It must look and energy and its costs, at
employment, and many other issues. The current
thinking in the government is indeed for the
regulations not to finance or implement
specific measures. Instead, it will create
government agencies which will oversee the
policy’s implementation.
“It contemplates a six-year industrial policy,
split in three-year plans, and it’s in those
plans where specific and sectorial measures
will be implemented. Overall, we are liking
what we are hearing. But we are also pragmatic,
and past experiences tell us Spain has not
precisely been an example of industrial policy
success. Touch wood this time it is – chemicals
would benefit so much if the things described
above end up being implemented and, crucially,
they work for everyone involved.
“Finally – we are talking about a draft
proposal for now: we will need to see what the
law looks like and, more importantly, what
resources are allocated to the specific
measures set to be announced.”
Interview article by Jonathan
Lopez
Hydrogen01-Aug-2024
SINGAPORE (ICIS)–In 2012-2023, China’s
hydrogen production more than doubled, with 80%
of its 2023 output derived from coal and
natural gas.
With refineries playing a crucial role in the
country’s overall hydrogen production, the
ongoing shift toward chemical production is set
to further boost demand.
This trend is expected to accelerate the
adoption of cleaner blue and renewable hydrogen
sources in refineries.
Join ICIS Asia deputy news editor Nurluqman
Suratman, ICIS hydrogen analysts Patricia Tao
and Anita Yang as they discuss the increasing
importance of hydrogen in China’s refining
sector.
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