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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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Ethylene04-Jul-2024
SAO PAULO (ICIS)–The UK’s public broadcaster
BBC was predicting a landslide victory for the
center-left Labour Party after polling stations
closed at 22.00 local time in London.
According to the BBC exit poll, Labour would
have won around 410 members of parliament (MPs)
in the 650-strong House of Commons, with its
leader Keir Starmer set to be the UK’s next
Prime Minister.
Incumbent Prime Minister Rishi Sunak’s
Conservative party lost the overall majority
won in 2019, suffering a severe defeat after
losing more than 200 MPs.
If the BBC exit poll is confirmed, the new
House of Commons would be a more plural
parliament, with the centrist Liberal-Democrats
recovering much ground and the far-left Green
Party and the far-right Reform party having
achieved some meaningful representation.
Earlier in 2024, the UK’s chemicals trade group
the CIA
said the upcoming cabinet must do more to
encourage investment in manufacturing value
chains, arguing the country is losing out in
the battle to attract investment against
competitors such as the EU, the US and China.
14 YEARS LATERLabour
last occupied office in 2010 under the
premiership of Gordon Brown, who succeeded Tony
Blair in 2007.
From 2010 on, Conservative leaders David
Cameron, Theresa May, Boris Johnson, Liz Truss
and Rishi Sunak have been the residents of
Number 10 Downing Street, the official
residence of the Prime Minister in central
London.
Behind them, a convulse decade-and-a-half in UK
politics when voters decided by a small margin
to withdraw from the EU in 2016, a process
which was not concluded until 2021.
From 2020 on, pandemic-related mismanagement
and the energy crisis have kept the governing
party trailing in opinion polls.
On Thursday’s election, several ministers and
key Conservatives figures would have lost their
seat in parliament, according to the BBC’s exit
poll.
UK House of Commons
Projections 2024 – BBC
Election 2019
Change
Conservative Party
131
365
-234
Labour Party
410
203
+207
Scottish National Party
10
48
-38
Liberal-Democrats
61
11
+50
Others
38
23
+15
Ethylene04-Jul-2024
SAO PAULO (ICISI)–Fears that Hurricane Beryl
could cause widespread disruption to
petrochemicals production in the Altamira hub,
in the Mexican state of Tamaulipas, have now
subsided as the hurricane weakens on its path
through the Caribbean.
Beryl was a powerful Category 5 hurricane until
a few hours ago but has quickly weakened to a
Category 3 as it heads towards the Mexican
peninsula of Yucatan.
After that, it is expected to weaken further
and reach Tamaulipas and the US state of Texas
a storm, much less destructive and not a cause
of concern for industrial assets in those
regions.
A spokesperson for Alpek, one of Mexico’s main
chemicals producers, said Beryl is now expected
to only cause manageable rainfall in Altamira;
that rainfall will be very much welcome after
the area suffered a severe drought for months.
“At the moment, the prediction is that it will
only rain in Altamira [when Beryl passes
through] and we do not expect it to have an
impact in our operations,” said a spokesperson
for Alpek.
The petrochemicals hub in Altamira also hosts
companies such Orbia, Dynasol, Cabot, or
Chemours, among many others.
None of the producers mentioned had responded
to a request for comment at the time of
writing.
FROM DROUGHT TO RAINY
SEASONAltamira’s petrochemicals
players had been struggling with water
restrictions for industrial players since May,
when a severe drought in Tamaulipas prompted
the authorities to restrict water supplies.
The situation caused widespread disruption to
chemicals production; in mid-June, it
started improving as
water supplies to households, first, and to
industrial players later were re-established.
The fact that Beryl is expected to cause only
rainfall, without risk of flooding, will also
be welcome.
In an interview with ICIS
in mid-June, an expert from supply chain
consultancy Everstreams said that, while much
awaited, rainfall in the form of storms or
hurricanes could cause as much havoc as the
drought had caused.
“With flooding, there is potential for things
like landslides and run-offs, which can block
roads and highways, So, companies are hoping
that it will be some kind of happy middle
ground, where the rain is not too extreme as to
present added challenges and issues,” said
Everstreams’ Jena Santoro.
Earlier on Thursday, the US’ National Hurricane Center
(NHC) said Beryl should hit northern Mexico
and southern US as a storm, which would spare
industrial assets in those regions – including
several petrochemicals hubs as well as
refineries – from a big hit to operations.
BUSY HURRICANE
SEASONMeteorologists have warned
that this year’s hurricane season could
be the most active ever, with 17-25 named
storms.
Out of those, between eight and 13 are expected
to be hurricanes; between four and seven should
be major hurricanes.
Major hurricanes are Category 3-5 storms with
wind speeds of at least 111 miles/hour.
Beryl’s unprecedented early development into a
Category 5 hurricane has been attributed to
unusually warm sea temperatures, a consequence
of global heating.
Source: US National
Hurricane Center
Ethylene04-Jul-2024
SAO PAULO (ICIS)–Hurricane Beryl, which until
3 July was a powerful Category 5 hurricane,
weakened to Category 3 by Thursday morning as
it headed towards the Mexican peninsula of
Yucatan.
When it hits Yucatan, Beryl is expected to
weaken into a storm, the US National Hurricane
Center (NHC) said on Thursday morning.
Therefore, industrial assets in northern Mexico
and Texas – including several petrochemicals
hubs as well as refineries – could be spared
from a big impact if the forecasted path holds.
In addition, few if any energy companies may
choose to shut in US oil and gas wells in the
Gulf of Mexico.
Major US oil and LNG ports are also expected to
avoid the worst of the storm. According to the
current forecast, the hurricane will make
landfall between the Mexican petrochemical hub
of Altamira, Tamaulipas, and the US hub of
Corpus Christi, Texas.
“A westward to west-northwestward motion is
expected during the next day or two, taking the
core of Beryl away from the Cayman Islands
through this afternoon and over the Yucatan
Peninsula early Friday. Beryl is expected to
emerge over the southwestern Gulf of Mexico
Friday night and move northwestward across the
southwestern Gulf of Mexico on Saturday,” said
the NHC.
“Reports from Air Force Reserve and NOAA
[National Oceanic and Atmospheric
Administration] Hurricane Hunter aircraft
indicate that maximum sustained winds are now
near 115 mph (185 km/h) with higher
gusts. Beryl is a category 3 hurricane on
the Saffir-Simpson Hurricane Wind Scale.
Weakening is forecast during the next day or
two, though Beryl is forecast to remain a
hurricane until it makes landfall on the
Yucatan Peninsula.”
BUSY HURRICANE SEASON
Meteorologists have warned that this year’s
hurricane season could
be the most active ever, with 17-25 named
storms.
Out of those, eight-13 should be hurricanes and
four-seven should be major hurricanes.
Major hurricanes are Category 3-5 storms with
wind speeds of at least 111 miles/hour.
Beryl’s unprecedented early development into a
Category 5 hurricane has been attributed to
unusually warm sea temperatures, a consequence
of global heating.
Source: US’
National Hurricane Center
Gas04-Jul-2024
LONDON (ICIS)–The surge of populist far-right
movements in recent EU and national elections
are raising questions about the bloc’s ability
to retain its role as the world’s climate
policy pioneer.
Many consumers are demanding a focus shift from
climate targets to competitiveness and
security.
While these goals may gather momentum, Europe’s
ambition to phase out fossil fuels to achieve
climate neutrality will remain firmly on the
political agenda.
Nevertheless, the speed of implementing
legislation or reaching stringent targets will
depend on four key factors.
Read the full ICIS white paper
here .
Gas04-Jul-2024
LONDON (ICIS)–Gas In Focus deputy editor Marta
Del Buono and Global Hydrogen Editor Jake
Stones discuss UK parties’ pledges for the
general elections and what do they mean for the
energy market.
Labour and the Greens and Conservatives favor
renewables while Reform UK is going as far as
scrapping Net Zero policies, fast tracking
North Sea licenses and embracing fracking.
Click
here to watch
Speciality Chemicals04-Jul-2024
LONDON (ICIS)–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”.
Following an investigation launched in October
2023, the Commission determined that the level
of support provided for electric vehicle
production in China was substantial enough to
pose a “threat of economic injury” to EU
producers.
Discussions between Commission and China
government representatives have “intensified”
in recent weeks, and discussions continue
around reaching a solution compatible with
World Trade Organization (WTO) rules, the EU
executive body added.
Those talks have resulted in a slight reduction
in overall tariffs being levied on some of
China’s largest electric vehicle manufacturers
compared to the rates set out in a 12 June
pre-disclosure.
Manufacturer BYD will face fresh tariffs of
17.4%, Geely 19.9% compared to earlier plans
for 20%, and SAIC 37.6% compared to earlier
plans for 38.1%.
Other China BEV producers that co-operated with
the investigation are subject to weighted
duties of 20.8%, while the duties for
non-co-operating companies will be set at
37.6%.
The duties apply from 5 July for a minimum of
four months, with a decision to be taken on
whether to implement the levies long-term. If a
final decision is taken to impose definitive
duties, the tariffs will remain in place for
five years, the Commission added.
“Based on the investigation, the Commission has
concluded that the BEV value chain in China
benefits from unfair subsidisation, which is
causing a threat of economic injury to EU BEV
producers,” the European Commission said in a
statement.
“The investigation has also examined the likely
consequences and impact of these measures on
importers, users and consumers of BEVs in the
EU.”
The French government has backed the move to
investigate the impact of China subsidies on
European BEV markets, while German Chancellor
Olaf Scholz has warned against the move.
Germany is one of Europe’s key auto
manufacturers, with large global players in the
sector such as BMW and Audi deriving a
substantial portion of their international
business from China.
The German Association of the Automotive
Industry (VDA) on Wednesday issued fresh public
criticism for the
plans, claiming that the tariffs will slow the
growth of the electromobility sector and slow
carbon reduction target progress.
“The anti-subsidy tariffs would make electric
vehicles more expensive on the European market
or prevent them from being offered on the
market at all,” the trade group said.
Thumbnail photo: A dealership operated in
Moscow, Russia, by Geely, one of the producers
facing intensified sanctions. Source: Maxim
Shipenkov/EPA-EFE/Shutterstock
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