Butadiene and c4s

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There are many factors that trigger butadiene price fluctuations, from unplanned cracker outages or logistics disruptions on pipelines, to weak demand from the automotive sector. Butadiene markets around the world are sensitive to sudden changes, so access to timely market intelligence can make a real difference. This is especially important when decisions need to be made quickly by producers, downstream tyre manufacturers, importers, distributors and traders.

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Butadiene and c4s news

Americas top stories: weekly summary

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 22 March. AFPM '24: INSIGHT: Biden ending term with regulatory bang for US chems The administration of US President Joe Biden is proposing a wave of regulations before its term ends in 2025, many of which will increase costs for chemical companies in the US and persist even if the nation elects a new president later this year. AFPM ’24: US petrochemicals exports to become growing force but geopolitical risks loom In an era of intensifying global competition, the US petrochemical industry is primed to become a growing force as an enviable cost position from shale gas enables it to run at high rates and ramp up exports, especially in a high crude oil price regime. AFPM ’24: Red Sea, Panama issues to pressure shipping amid possible US port labor conflict The 2024 shipping outlook seems dire amid a drought in Central America that has lowered the number of ships allowed to pass through the Panama Canal and rebel attacks in the Red Sea that have led most carriers to divert away from the Suez Canal. AFPM ’24: LatAm petchems brace for slow path to recovery with all eyes on China The petrochemicals downturn in Latin America is likely to be the longest ever as Chinese and global overcapacities dampen prices in the world’s quintessential “price taker” region for chemicals. AFPM '24: INSIGHT: New US auto emission rule to boost plastic demand, squeeze refiners The new greenhouse gas restrictions that the US imposed on automobiles will speed up the adoption of electric vehicles (EVs), which will have several knock-on effects on plastics, lubricants and chemicals produced by refineries. AFPM ’24: INSIGHT: US Q1 base oil glut indicates that historic weak demand persists Historically weak base oil demand in the US has resulted in oversupply and unprecedented price spreads between producer posted prices, ICIS domestic market prices and ICIS spot export prices heading into this year’s International Petrochemical Conference (IPC).

25-Mar-2024

China’s Sinopec 2023 profit falls 13% as chemicals incur loss for second year

SINGAPORE (ICIS)–Chinese producer Sinopec posted a 12.9% decrease in full-year 2023 net profit as product prices fell across the board, dragged down by operating losses in chemicals. Chemicals segment incurs CNY6.0bn ($832m) loss in 2023 Refining earnings surge 69% as crude prices fall 2024 C2 output growth to slow from 6.5% in 2023 Sinopec is a major chemical producer in China. In million yuan (CNY) 2023 2022 Change Revenue 3,212,215 3,318,168 -3.2% Operating expenses -3,125,387 -3,242,333 -3.6% Operating profit 86,828 75,835 14.5% Profits attributable to shareholders 58,310 66,933 -12.9% Among its four business segments, only chemicals reported a loss in 2023. The segment incurred operating losses for the second consecutive year. The 2023 figure, however, was much lower compared with 2022, aided in part by feedstock optimization and increased run rates of profitable plants. Operating profit (loss) in CNY million 2023 2022 Change Exploration & production              44,963 53,716 -16.3% Refining              20,608 12,211 68.8% Marketing & distribution              25,939 24,537 5.7% Chemicals              (6,036) (14,127) N/A The chemical market faced a tough oversupply condition last year, following a significant increase in China’s petrochemical capacity, with declining prices dampening production margins. China’s domestic chemical product prices in 2023 declined by 7.0%, with chemical margin at a low level, the company said. Its ethylene (C2) production in 2023 stood at 14.31 million tonnes, up by 6.5% from 2022. Sinopec’s total chemical sales volume last year increased by 1.7% to 83 million tonnes, it said. Meanwhile, operating profit from refining in 2023 surged 69% due to lower crude prices, with both refinery throughput and domestic sales of oil products hitting record highs. In 2023, Sinopec processed 258 million tonnes of crude, up by 6.3% from 2022. Domestic sales of refined oil products (including gasoline, diesel and kerosene) last year reached 188 million tonnes, up 15.8% from the previous year. For 2024, the company expects the Chinese economy will maintain a sustainable trend of recovery, with domestic demand for natural gas, fuel and chemicals to continue growing. It expects volatility in crude prices to persist. “Due to changes in global supply and demand, geopolitics and inventory levels, international oil prices are expected to fluctuate at medium to high levels,” Sinopec noted. “Our company will put more focus on value creation with priority given to profit generation, transition, upgrading, reform, innovation, and risk control,” it said. Sinopec 2024 forecasts 2024E* 2023 change Crude production (million barrels) 279.06 281.12 -0.7% Natural gas outputs (billion cubic feet) 1,379.70 1,337.82 3.1% Crude throughput (million tonnes) 260 257.52 1.0% Refined oil products output (million tonnes) 159 156 1.9% Domestic sales of oil products (million tonnes) 191 188.17 1.5% Ethylene production (million tonnes) 14.35 14.31 0.3% Capital expenditure (CNY billion) 173 176.8 -2.1% *Sinopec estimates Focus article by Fanny Zhang ($1 = CNY7.21) Thumbnail image: At the container terminal of Nanjing Port in Jiangsu Province, China, on 19 March 2024.(Costfoto/NurPhoto/Shutterstock)

25-Mar-2024

Yen falls to four-month low after Japan scraps negative interest rates

SINGAPORE (ICIS)–The Japanese yen (Y) fell to a four-month low on Wednesday despite the decision by the Bank of Japan (BoJ) to end its long-standing negative interest rate policy. The weakening of the currency would be beneficial for exports but would translate to higher import costs. At 04:10 GMT, the yen weakened to Y151.41 to the US dollar, the lowest so far this year, after falling by more than 1% on 19 March, compared with Y140.82 on 1 January this year. While the BoJ's move away from negative rates might seem hawkish, the central bank made it clear that this is a one-off move in the near term, stating that it "anticipates to maintain accommodative financial conditions for the time being." "The market probably expects that the central bank would move at a glacial pace, which must be disappointing – especially with the Fed's [US Federal Reserve] move likely to be smaller than expected," Dutch banking and financial services firm ING said in a note. At its 18-19 March monetary policy meeting, Japan’s central bank ended its negative interest rate policy (NIRP) and scrapped the yield curve control (YCC) program, largely in line with market expectations. In 2023, the Japanese yen slumped by around 11% against the US dollar, posting its biggest decline among other major currencies, as the BoJ maintained its key interest rate at minus 0.1%, while others, led by the US, had had aggressively tightened monetary policy to temper strong inflationary pressures. The yen’s weakness pushed up Japan's exports to a record high last year, but the country registered its third consecutive year of a trade deficit at Y9.29tr as import costs surged. Exports remained on an upward trend this year, rising by 11.2% year on year in January on the back of improved shipments of vehicles and auto parts, while imports fell by 9.6% amid declining energy prices and weaker demand. A weaker yen also gives Japanese chemical exports a price advantage overseas, but it also cuts into profit margins by raising the cost of imported energy needed for production. The country's total chemical exports remained in the negative for most of 2023 on sluggish global demand but has made a recovered since December, with January 2024 data showing a 11.2% year-on-year increase in shipments abroad. Naphtha is the primary feedstock for Japanese refiners and petrochemical producers is. Around half of their naphtha requirements is imported, with the rest coming from domestic crude oil distillation units. Japan's overall naphtha imports totalled 25m kilolitres in 2023, while imports stood at 13.2m kilolitres, according to data from the Ministry of Economy, Trade and Industry (METI). Summary of the BoJ's new monetary policy framework The BoJ will restore the uncollateralised overnight call rate as a primary policy tool and set the rate in a range between 0% to 0.1%, from -0.1% previously. A continuation of its Japanese government bonds (JGBs) purchases with broadly the same as before – currently about Y6 trillion a month. The central bank will discontinue the purchase of exchange-trade funds (ETFs)/J-REITs while gradually reducing the amount of purchase of CP and corporate bonds. It will discontinue the purchases in about a year. Japan's REITs, also known as J-REITs, are publicly traded real estate investment trusts. The BoJ has also opted to change its terms and rates for lending facilities.

20-Mar-2024

Global energy transition 'visibly failing' – Aramco CEO

SINGAPORE (ICIS)–The global energy transition is failing and the "fantasy" of phasing out oil and gas should be abandoned as demand for fossil fuels will continue growing, Aramco President and CEO Amin Nasser said on 18 March. “In the real world, the current transition strategy is visibly failing on most fronts as it collides with five hard realities,” Nasser said at the CERAWeek 2024 energy conference in the US. These include the need to reset global efforts to meet climate ambitions, the limited scalability of alternatives, the high costs of green energy alternatives, the needs of developing nations and the potential to further reduce emissions from traditional hydrocarbons, Nasser said. “We should abandon the fantasy of phasing out oil and gas and instead invest in them adequately, reflecting realistic demand assumptions,” said the CEO of the Saudi Arabia-headquartered energy and chemical company. “We should ramp up our efforts to reduce carbon emissions, aggressively improve efficiency and introduce lower carbon solutions,” Nasser added. New energy sources and technologies should enter the market only when commercially viable, cost-competitive and supported by adequate infrastructure, Nasser said. Despite ongoing energy transition efforts, hydrocarbons still dominate the global energy mix, with their share declining only marginally from 83% to 80% in the 21st century, Nasser noted. Peak oil and gas demand is also “unlikely for some time to come”, with crude demand expected to reach an all-time high in the second half of this year, he said. The International Energy Agency (IEA) said in an October 2023 report that global demand for oil, coal and natural gas is set to peak by 2030. Likewise, gas remains a mainstay of global energy, growing by about almost 70% since the start of the 21st century, Nasser noted. "Despite the world investing more than $9.5tr on energy transition over the past two decades, alternatives have been unable to displace hydrocarbons at scale." The current energy transition is neglecting the needs of consumers who rely on affordable and dependable energy sources, Nasser said. “Unfortunately, the current transition strategy overlooks these broader messages from consumers. It focuses almost exclusively on replacing hydrocarbons with alternatives, more on sources than on reducing emissions.” Focus article by Nurluqman Suratman

19-Mar-2024

VIDEO: Global oil outlook – five factors to watch in week 12

LONDON (ICIS)– A brightening demand outlook and tighter oil supply could support benchmark crude prices this week. However, investors will be closely watching central bank meeting across the globe for clues to future monetary policy. ICIS look at the likely factors that will drive oil prices in Week 12.

18-Mar-2024

Americas top stories: weekly summary

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 15 March. US CPI inflation 'sticky' at 3.2%, may delay Fed rate cuts – ICIS economist US inflation, as measured by the consumer prices index (CPI), rose 0.4% month on month in February, leaving it up 3.2% year on year, the Bureau of Labor Statistics (BLS) reported on Tuesday. LyondellBasell sees signs of modest improvement in Q1 – CEO LyondellBasell is seeing some indications of modest improvement in its businesses, particularly in North America and Europe, with packaging being the strongest end market, its CEO said on Wednesday. US Trinseo seeks to sell stake in AmSty Trinseo has started the process to sell its 50% stake in Americas Styrenics (AmSty), the US-based engineered materials producer said on Wednesday. US outage to boost March Asia-Atlantic spot acetic acid, VAM trades Asia-Atlantic spot trades for acetic acid and vinyl acetate monomer (VAM) are expected to increase after supply gaps in the US and Europe emerged following an unexpected plant outage in the US. Potential for oil market deficit in 2024 as demand expectations grow – IEA Higher oil demand expectations and fresh production cuts from the OPEC+ alliance could push the 2024 crude market balance from a surplus to a slight deficit if the voluntary reductions remain in place for the rest of the year, according to the International Energy Agency. INSIGHT: US aromatics, refining output recedes as peak oil approaches Peak oil demand in the US could lead to a further decline in refining capacity, which will tighten supplies of benzene, toluene and xylenes (BTX) for downstream chemical producers. Unipar expects hardship in Argentina but Brazil PVC demand should recover Unipar’s operations in Argentina are set to face pressure from the current recession but a bright spot could appear in higher civil engineering activity in Brazil, propping up demand for polyvinyl chloride (PVC), the Brazilian chemicals producer said on Friday.

18-Mar-2024

Europe top stories: weekly summary

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 15 March. Europe ethylene and propylene sentiment cautiously optimistic for remainder of H1 Given the better-than-expected demand conditions, with improved sales volumes and higher prices lifting many out of the mire that was 2023, the question on everyone’s lips is how long can we expect this state of affairs to last. Potential for oil market deficit in 2024 as demand expectations grow – IEA Higher oil demand expectations and fresh production cuts from the OPEC+ alliance could push the 2024 crude market balance from a surplus to a slight deficit if the voluntary reductions remain in place for the rest of the year, according to the International Energy Agency. Surging PET bottle bale prices threaten to ‘destroy’ Europe’s R-PET market Feedstock bale prices hit €930/tonne ex-works in Poland on Monday, prompting recycled PET participants to suggest such price levels threaten to destroy the R-PET market as they fear a repeat of 2022’s disastrous price volatility. Europe acetic acid, VAM contract talks for March focus on supply disruption March negotiations are underway for European acetic acid and vinyl acetate monomer (VAM) contract pricing with security of supply a key influence on negotiations amid LyondellBasell’s force majeure in the US and other disruptions to global trade flows. Caution caps optimism as peak season arrives for Europe styrene market Spot activity in the Europe styrene market was moderate in the week ended 8 March, as players attended a key industry event, while cautious and conservative sentiment persisted alongside crosswinds from ongoing demand weakness and thin liquidity, high feedstock costs and reduced availability. Participants pointed to only slight improvements in demand and market optimism from levels seen in 2023. Europe cracker margins up on firmer ethylene, co-products pricing Cracker margins in Europe rose in the week on the back of firmer ethylene and co-product pricing, ICIS Margin Analysis showed on Monday.

18-Mar-2024

Asia top stories – weekly summary

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 15 March 2024. INSIGHT: Indorama exit from PET feedstock markets to spur China PTA exports By Nurluqman Suratman 15-Mar-24 11:42 SINGAPORE (ICIS)–Demand for China’s purified terephthalic acid (PTA) will get a boost as Indorama Ventures Ltd (IVL), a global producer of downstream polyethylene terephthalate (PET), shifts away from expensive integrated operations. INSIGHT: Policies announced in China Two Sessions will impact domestic petchems market in 2024 By Jimmy Zhang 14-Mar-24 23:07 SINGAPORE (ICIS)–China's Two Sessions earlier this month – the yearly meetings where its legislature sets laws and its advisory body offers policy recommendations – attracted attention from the market for the growth targets set and announcements on expected future economic development. According to Premier Li Qiang, China's GDP growth target is “around 5.0%”. US outage to boost March Asia-Atlantic spot acetic acid, VAM trades By Hwee Hwee Tan 14-Mar-24 12:26 SINGAPORE (ICIS)–Asia-Atlantic spot trades for acetic acid and vinyl acetate monomer (VAM) are expected to increase after supply gaps in the US and Europe emerged following an unexpected plant outage in the US. Asia caustic soda market could be underpinned by snug supply, limited vessel space By Jonathan Chou 13-Mar-24 15:40 SINGAPORE (ICIS)–Asia's liquid caustic soda spot supply may remain snug in the near term, while demand could continue its gradual growth into the second quarter (Q2) of 2024. PODCAST: China Group III base oils market sees supply, demand changes By Whitney Shi 12-Mar-24 15:53 SINGAPORE (ICIS)–In this podcast, ICIS Senior Industry Analyst Whitney Shi and ICIS Assistant Industry Analyst Jady Ma talk about supply and demand changes in China’s Group III base oils market. Saudi Aramco '23 profit falls on softer crude; ’24 focus on downstream growth By Nurluqman Suratman 11-Mar-24 12:37 SINGAPORE (ICIS)–Energy giant Saudi Aramco's net profit in 2023 fell by 24.7% to Saudi riyal (SR) 454.8bn ($121.3bn), weighed by weaker crude oil prices as well as lower refining and chemical margins.

18-Mar-2024

Potential for oil market deficit in 2024 as demand expectations grow – IEA

LONDON (ICIS)–Higher oil demand expectations and fresh production cuts from the OPEC+ alliance could push the 2024 crude market balance from a surplus to a slight deficit if the voluntary reductions remain in place for the rest of the year, according to the International Energy Agency. Q1 crude oil demand is likely to be higher than the agency initially forecast on the back of a stronger economic outlook for the US, which is likely to buoy total consumption growth for the period to 1.7 million bbl/day. A stronger early 2024 demand forecast drove a 120,000 bbl/day increase in full-year estimates, with the IEA now projecting 1.3 million bbl/day consumption growth. The IEA projection remains substantially below OPEC forecasts of 2.2 million bbl/day, but it has repeatedly increased its projections, growing 400,000 bbl/day from the agency’s 900,000 bbl/day forecast in October 2023. Supply declined quarter on quarter in January-March as demand firmed, dropping 870,000 bbl/day during the period on the back of extreme weather disruptions and voluntary output curbs from OPEC+. The cartel and its partners recently announced plans to extend curbs into the second quarter of the year, with the IEA saying in its latest oil market report that the baseline assumption is now for those measures to remain in place through 2024. “On that basis, our balance for the year shifts from a surplus to a slight deficit, but oil tanks may get some relief as the massive volumes of oil on water reach their final destination,” the IEA said. Declining onshore oil inventories, along with trade dislocations from Russia and the impact of Middle East tensions on ocean trade flows has substantially shifted the balance of reserves towards ‘oil on water’, according to the IEA. Repeated attacks on tankers in the Red Sea intensified this trend last month, with 1.9 billion barrels of oil ocean-bound as of the end of February, according to the IEA, the second-highest figure since the height of the pandemic. Despite growing 2024 demand expectations over the last few months, the IEA continues to project that oil consumption is reverting back to its historical trend as the pandemic-era rebound tapers off and electric vehicle sales grow. Non-OECD countries are expected to comprise the vast majority of consumption growth this year, but demand from China is expected to crater, although it will remain the most pivotal sales driver for the industry. “[China’s] oil demand growth slows from 1.7 million bbl/day in 2023 to 620,000 bbl/day in 2024, or from roughly three-quarters to half of the global total, under the gathering weight of a challenging economic environment and slower expansion in its petrochemical sector,” the IEA added. The agency estimates that the OPEC+ bloc had 5.72 million bbl/day of effective spare capacity compared to February, with 5.34 million bbl/day of that total from the core OPEC member states. One country, Saudi Arabia, accounted for more than half of total OPEC+ spare capacity, at 3.12 million barrels. Focus articled by Tom Brown. Thumbnail photo source: Photo source: Jose Bula Urrutia/Eyepix Group/Shutterstock

14-Mar-2024

VIDEO: Global oil outlook. Five factors to watch in week 11

LONDON (ICIS)–Crude prices could be subject to bullish pressure this week as tensions in the Middle East advance. Monthly oil reports from the International Energy Agency (IEA) and OPEC, due this week, could better illuminate the global supply and demand balance for the rest of the year. ICIS experts look at likely factors that will drive oil prices in Week 11.

11-Mar-2024

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