Engineering plastics (POM, PBT)

ORLANDO (ICIS)–SABIC is looking for further opportunities for growth in the Americas as part of its strategy to navigate an era of excess capacity around the world, one that has led it and other producers to shutter capacity in high-cost regions, an executive said. "We are actively looking at our growth opportunities throughout North America as well as South America," said Sami Al-Osaimi, executive vice president, polymers, SABIC. He made his comments during a presentation at this year’s NPE: The Plastics Show. Al-Osaimi said the Americas is a very key strategic market for SABIC. The company has seen good momentum in North America. "We are definitely going to really make sure that we leverage what exactly our customers require," he said. About two years ago, SABIC and ExxonMobil started operations at an integrated polyethylene (PE) and ethylene glycols (EG) complex in Corpus Christi, Texas, US, under the Gulf Coast Growth Ventures (GCGV) joint venture. The startup marks SABIC's first US-based ethylene and PE production, albeit through a joint venture. At the same time, Al-Osaimi acknowledged the challenges facing the industry. The market is contending with the consequences of a surge in new ethylene capacity that has started up in recent years. ICIS estimates that up to 20 million tonnes/year may need to shut down to keep operating rates at healthy levels. High-cost regions are bearing the brunt. Earlier in April, SABIC announced plans to shut down a cracker in Geleen, the Netherlands. ExxonMobil revealed plans to shut down its cracker in France during that same week. Al-Osaimi did not rule out further capacity rationalizations during a question-and-answer session that followed his presentation at NPE. "SABIC always is looking to its operations in Americas, globally, and how to become more efficient and effective to support our customers to really develop the right solutions," he said. "This is going to be an ongoing process." OPPORTUNITIES IN CHEM RECYCLING, E-CRACKINGSABIC is further improving chemical recycling technology to make it more effective and efficient, he said. SABIC and Plastic Energy are developing a chemical recycling plant under a joint venture in Geleen. Completion had been expected in the fourth quarter of 2023. There are still challenges with scaling up the technology, Al-Osaimi said. Still, SABIC is open to expansion, with possible sites including the US, Saudi Arabia and other regions. In addition, SABIC, BASF and Linde recently started up a demonstration unit of an electric cracker (e-cracker). As the group demonstrates the technology, it would explore expanding the site and potentially building new units, Al-Osaimi said. STRATEGY OF COLLABORATION, INNOVATIONIn prepared remarks, Al-Osaimi elaborated on how SABIC was navigating the challenges in the market by stressing its focus on innovation and collaboration with customers. The company is focusing on end markets such as advanced packaging, automotive, transportation, building and construction, consumer goods, electrical components and health and hygiene, he said. Electric vehicles (EVs) have material challenges, that present opportunities for SABIC. The company is developing polymers to prevent thermal runaway – part of its larger BLUEHERO initiative, Al-Osaimi said. Companies that build automobiles powered by internal combustion engines (ICEs) still want to lower their weight to improve their fuel efficiency and reduce their greenhouse gas emissions, he said. That is creating demand for lighter weigh materials. Produced by Plastics Industry Association (PLASTICS), NPE: The Plastics Show takes place 6-10 May in Orlando, Florida. Focus article by Al Greenwood Thumbnail image shows polyethylene (PE), which is used in plastics bags. (Photo by Elaine Thompson/AP/Shutterstock)

07-May-2024

ORLANDO (ICIS)–Headwinds for the plastics industry including higher cost of capital, weaker household spending momentum and capacity adjustments will likely persist through 2024, according to a presentation by Perc Pineda, Chief Economist at PLASTICS, at this year’s NPE show. The US Consumer Price Index (CPI) was up 3.5% year on year in March, with economists expecting inflation to average 3.1% this year, which is above the US Federal Reserve’s target of 2%. As a result, interest rate futures are now moving towards fewer cuts. Elevated interest rates continue to negatively impact the petrochemicals industry, including US polyethylene terephthalate (PET), as high interest rates continue to result in weaker household spending. Additionally, the US PET market continues to experience capacity adjustments. In March of 2023, Alpek Polyester announced it would be indefinitely shutting down its Cooper River, South Carolina, PET site. A few months later in September of 2023 the integrated polyester plant being built by Alpek, Indorama and Far Eastern New Century (FENC), under the joint venture Corpus Christi Polymers, announced it was pausing construction at its Corpus Christi, Texas, site because of inflation as well as high construction and labor costs. Globally, Indorama announced in March 2024 that it is eyeing multiple sites and it is aiming to shut down. Without interest rate cuts, headwinds in the US and global PET market will likely continue through 2024, despite an optimistic demand outlook for 2024 compared to 2023. Thumbnail image shows multicolored PET preforms for plastic bottles Produced by Plastics Industry Association (PLASTICS), NPE: The Plastics Show takes place 6-10 May in Orlando, Florida.

06-May-2024

SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 3 May. NEWS Besieged by imports, Brazil’s chemicals put hopes on hefty import tariffs hike Brazilian chemicals producers are lobbying hard for an increase in import tariffs for key polymers and petrochemicals from 12.6% to 20%, and higher in cases, hoping the hike could slow down the influx of cheap imports, which have put them against the wall. Mexico’s manufacturing slows on weaker exports, Chinese competition Mexico’s manufacturing sectors slowed down slightly in April on the back of tough competition, particularly from China, and weak demand from abroad, which caused a fall in output, analysts at S&P Global said on Thursday. Brazil’s manufacturing at nearly three-year high on booming demand Brazil's manufacturing sectors continued booming in April on the back of a sharp increase in new business intakes, which led to higher output and job creation, analysts at S&P Global said on Thursday. Mexico increases PET import tariff again in attempt to shield economy In the last week of April, Mexican President Andres Manuel Lopez Obrador introduced an amended version of the Tariff within the General Import and Export Duties Law to enforce import duties, or temporary duties, on products falling under 504 tariff items, including polyethylene terephthalate (PET) resin. These new duties will vary from 5% to 50%. Brazil's Braskem Q1 resin sales fall 5% yearly, on prioritizing sales with higher added value Braskem resin sales in its domestic Brazilian market dropped by 5% in Q1, year on year, on the back of prioritizing sales with higher added value in the period, the Brazilian petrochemicals major said on Friday in its quarterly production and sales report. INSIGHT: Six decades on, Brazil’s Unigel founder fights the ultimate battle The founder of Unigel, aged 87, is actively fighting the Brazilian chemicals and fertilizers producer’s most decisive battle, one for its survival, as it tries to restructure its debts, one step away from bankruptcy. PRICING Lat Am PE domestic prices fall in Argentina, Brazil on cheaper imports, soft demand Domestic polyethylene (PE) prices fell in Argentina and Brazil due to competition with cheaper imports and soft demand. In other Latin American countries, prices were unchanged. LatAm PP domestic prices fall in Argentina, Colombia, Mexico on lower feedstock costs, soft demand Domestic polypropylene (PP) prices fell in Argentina, Colombia and Mexico on the back of lower feedstock costs and soft demand.

06-May-2024

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 3 May. Freight rates spike again, nudging Europe PET buyers back home Shipping costs may be making European polyethylene terephthalate (PET) imports prohibitively expensive, giving domestic sellers an opportunity to individually lift prices. Eurozone manufacturing activity dips again in April as order momentum fades Eurozone industrial sector momentum sank further into contraction territory in April, to hit a four-month low as new orders declined by the sharpest rate seen in 2024. Legal confusion limits Europe's pyrolysis oil trade as tyre-derived price fall Europe's tyre-derived pyrolysis oil spot prices fell this week following discussions of increased availability as pilot plants continue to scale, coupled with pressure from low-priced offers from overseas – particularly Asia. Europe May benzene contract drops in weaker market The Europe benzene May contract price has settled at €1,117/tonne, down by €151/tonne from April and snapping an uptrend that began in January. European polyols market bearish as demand pressures continue Demand for polyols in the European market remains under pressure, as major end sectors are facing difficulties, however there are different views for consumption going into May.

06-May-2024

HOUSTON (ICIS)–Global hydrogen solutions provider Plug Power has announced the signing of a memorandum of understanding (MOU) with Allied Green Ammonia (AGA) to supply electrolyzer capacity for a proposed ammonia facility in Australia. The terms call for up to 3 gigawatts of electrolyzer capacity for AGA’s upcoming hydrogen to ammonia facility with the company stating that the green hydrogen produced by their electrolyzers help decarbonize the ammonia production process. AGA plans to establish a 2,500 tonne per day green ammonia operation with the proposed location at Gove Peninsula seen as being strategically placed to align with Asia trading partnerships. Following the MOU, Plug and AGA plan to enter an agreement to initiate a Basic Engineering and Design Package (BEDP) for the project. The BEDP is expected to advance mid-May of this year, with final investment decision planned for Q4 2025, with the progressive delivery of the 3GW electrolyzer supply slated to begin in Q1 2027. “Ammonia producers have recognized the substantial advantages of cost and carbon reduction through electrolysis-based hydrogen,” said Andy Marsh, Plug Power CEO. “We’re thrilled to sign this MOU and partner with AGA. Our expertise in constructing and operating large-scale hydrogen production facilities and our PEM electrolyzer manufacturing capability to support their 3GW project position us as the ideal partner for this endeavor.” AGA said this agreement is a critical first step and a testament to the alignment of the companies’ respective visions. “This agreement, in light of Plug’s unrivalled expertise and complementary technologies, is a strong vote of confidence in our capabilities and a significant milestone in the planned delivery of Allied Green’s facility, which will be one of the most energy efficient green hydrogen and green ammonia projects globally,” said Alfred Benedict, Allied Green Ammonia managing director.

03-May-2024

LONDON (ICIS)–Senior Editor for Recycling, Matt Tudball, discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: NWE, southern Europe colorless flake prices rise Bale prices in NWE, Italy increase Growing sense that flake and pellet prices getting close to their ceiling

03-May-2024

TORONTO (ICIS)–Workers at freight rail carriers Canadian National (CN) and Canadian Pacific Kansas City (CPKC) have voted in favor of a strike. A first work stoppage could occur as early as 22 May, if no new collective agreements are reached by then, officials at labor union Teamsters Canada Rail Conference (TCRC) said in a televised announcement on 1 May. The rail carriers warned that a work stoppage would disrupt supply chains throughout North America and constrain trade between Canada and the US and Mexico. The two railroads account for the bulk of freight rail traffic in Canada. Canada-based chemical and fertilizer producers rely on rail to ship more than 70% of their products, with some exclusively using rail. In the run-up of strikes, producers have to make preparations. Longer strikes can force plant shutdowns and after a strike ends it can take weeks for normal operations to resume. For the first 17 weeks of 2024, ended 27 April, Canadian chemical railcar loadings were 233,074, up 3.1% from the same period in 2023, according to  the latest freight rail data released on 1 May. Chemical industry sources had warned about the possibility of a rail strike in Canada early last month. The country's labor law requires a minimum of 72-hours notice prior to a strike or lockout. TCRC represents about 9,000 CN and CPKC engineers and conductors. The previous collective agreements expired on 31 December 2023. Thumbnail photo source: CN

02-May-2024

HOUSTON (ICIS)–Global technology provider Topsoe has signed a contract with fertilizer producer CF Industries for support on a front-end engineering and design (FEED) study for a proposed low-carbon ammonia plant in Louisiana. Topsoe said it will license its SynCOR ammonia technology to CF which when combined with carbon capture and storage will enable the production of low-carbon ammonia. Currently CF is evaluating development of the plant project in collaboration with ammonia marketer Mitsui & Co. If the project advances, it is intended to create low-carbon ammonia for use as a decarbonized energy source. “We believe low-carbon ammonia helps unlock the door towards a net zero future. Our technology offers a cost-effective route to producing low carbon ammonia while also enabling carbon capture, at industrial proven scale,” said Henrik Rasmussen, Topsoe, managing director, the Americas. “CF and Topsoe have a long-standing relationship spanning many decades and we are proud to extend our collaboration with this award.”

01-May-2024

SAO PAULO (ICIS)–Brazilian chemicals producers are lobbying hard for an increase in import tariffs for key polymers and petrochemicals from 12.6% to 20%, and higher in cases, hoping the hike could slow down the influx of cheap imports, which have put them against the wall. For some products, Brazil’s chemicals trade group Abiquim, which represents producers, has made official requests for the import tariffs to go up to a hefty 35%, from 9% in some cases. On Tuesday, Abiquim said several of its member companies “are already talking about hibernating plants” due to unprofitable economics. It did so after it published another set of somber statistics for the first quarter, when imports continued entering Brazil em masse. Brazil’s government Chamber of Foreign Commerce (Camex) is concluding on Tuesday a public consultation about this, with its decision expected in coming weeks. Abiquim has been busy with the public consultation: it has made as many as 66 proposals for import tariffs to be hiked for several petrochemicals and fertilizers, including widely used polymers such polypropylene (PP), polyethylene (PE), polyethylene terephthalate (PET), polystyrene (PS), or expandable PS (EPS), to mention just a few. Other chemicals trade groups, as well as companies, have also filed requests for import tariffs to be increased. In total, 110 import tariffs. HARD TO FIGHT OFFBrazil has always depended on imports to cover its internal chemicals demand, but the extraordinary low prices coming from competitors abroad has made Brazil’s chemicals plant to run with operating rates of 65% or lower. More and more, the country’s chemicals facilities are becoming white elephants which are far from their potential, as customers find in imported product more competitive pricing. Considering this dire situation and taking into account that the current government in Brasilia led by Luiz Inacio Lula da Silva may be more receptive to their demands, Abiquim has put a good fight in publica and private for measure which could shore up chemical producers’ competitiveness. This could come after the government already hiked import tariffs on several products in 2023 and re-introduced a tax break, called REIQ, for some chemicals which had been withdrawn by the previous Administration. While Brazil’s chemicals production competitiveness is mostly affected by higher input costs, with natural gas costs on average five times higher than in the US, the industry is hopeful a helping hand from the government in the form of higher import tariffs could slow down the flow of imports into Brazil. As a ‘price taker region’ given its dependence on imports, Latin American domestic producers have taken a hit in the past two years. In Brazil, polymers major Braskem is Abiquim’s commanding voice. Abiquim, obviously, has always been very outspoken – even apocalyptic – about the fate of its members as they try to compete with overseas countries, namely China who has been sending abroad product at below cost of production. The priorities in China’s dictatorial system are not related to the balance of markets, but to keep employment levels stable so its citizens find fewer excuses to protest against the regime which keeps them oppressed. Capitalist market dynamics are for the rest of the world to balance; in China’s dictatorial, controlled-economy regime the priority is to make people feel the regime’s legitimacy can come from never-ending economic growth. The results of such a policy for the rest of the world – not just in chemicals but in all industrial goods – is becoming clear: unprofitable industries which cannot really compete with heavily subsidized Chinese players. The results of such a policy in China are yet to be seen, but subsiding at all costs any industry which creates employment may have debt-related lasting consequences: as they mantra goes, “there is no such thing as a free lunch.” Abiquim’s executive president urged Lula’s cabinet to look north, to the US, where the government has imposed hefty tariffs on almost all China-produced industrial goods or raw materials for manufacturing production. “[The hikes in import tariffs] have improved the US’ scenario: despite the aggressive advance in exports by Asian countries, the drop in US [chemicals] production in 2023 was of 1%, while in Brazil the index for production fell nearly by 10%,” said Andre Passos. “The country adopted an increase in import taxes of over 30% to defend its market from unfair competition. The taxation for some inputs, such as phenol, resins and adipic [acid], for example, exceeds three digits. “Here, we are suggesting an increase in rates to 20% in most claims … We need to have this breathing space for the industry to recover,” he concluded. As such, the figures for the first quarter showed no sign of imports into Brazil slowing down. The country posted a trade deficit $9.9 billion during the January-March period; the 12-month accumulated (April 2023 to March 2024) deficit stood at $44.7 billion. A record high of 61.2 million tonnes of chemicals products entered Brazil in Q1; in turn, the country’s industry exported 14.6 million tonnes. Abiquim proposals for higher import tariffs Product Current import tariff Proposed tariff Expandable polystyrene, unfilled, in primary form 12.6% 20% Other polystyrenes in primary forms 12.6% 20% Carboxymethylcellulose with content > =75%, in primary forms 12.6% 20% Other polyurethanes in liquids and pastes 12.6% 20% Phthalic anhydride 10.8% 20%  Sodium hydrogen carbonate (bicarbonate) 9% 35% Copolymers of ethylene and alpha-olefin, with a density of less than 0.94 12.6% 20% Other orthophthalic acid esters 11% 20% Other styrene polymers, in primary forms 12.6% 20% Other silicon dioxides 0% 18% Other polyesters in liquids and pastes  12.6% 20% Commercial ammonium carbonates and other ammonium carbonates 9% 18% Other unsaturated polyethers, in primary forms 12.6% 20% Polyethylene terephthalate, with a viscosity index of 78 ml/g or more 12.6% 20% Phosphoric acid with an iron content of less than 750 ppm 9% 18% Dinonyl or didecyl orthophthalates 11% 20% Poly(vinyl chloride), not mixed with other substances, obtained by suspension process 12.6% 20% Poly(vinyl chloride), not mixed with other substances, obtained by emulsion process 12.6% 20% Methyl polymethacrylate, in primary form  12.6% 20% White mineral oils (vaseline or paraffin oils) 4% 35% Other polyetherpolyols, in primary forms 12.6% 20% Other unfilled epoxy resins in primary forms 12.6% 20% Silicon dioxide obtained by chemical precipitation 9% 18% Acrylonitrile-butadiene rubber in plates, sheets, etc 11% 35% Other organic anionic surface agents, whether or not put up for retail sale, not classified under previous codes 12.6% 23% Phenol (hydroxybenzene) and its salts 7% 20% Fumaric acid, its salts and esters 10 ,8% 20% Plasticizers and plastics 10 ,8% 20% Maleic anhydride 10 ,8% 20% Adipic acid salts and esters 10 ,8% 20% Propylene copolymers, in primary forms 12.6% 20% Adipic acid 9% 20% Unfilled polypropylene, in primary form 12.6% 20% Filled polypropylene, in primary form 12.6% 20% Methacrylic acid methyl esters 10 ,8% 20% Other ethylene polymers, in primary forms 12.6% 20% Acrylic acid 2-ethylhexyl esters 0% 20% 2-Ethylexanoic acid (2-ethylexoic acid) 10. 8% 20% Other copolymers of ethylene and vinyl acetate, in primary forms 12.6% 20% Other unfilled polyethylenes, density >= 0.94, in primary forms 12.6% 20% Polyethylene with a density of less than 0.94, unfilled 12.6% 20% Other saturated acyclic monoalcohol acetates, c atom <= 8 10. 8% 20% Polyethylene with a density of less than 0.94, with filler 12.6% 20% Triacetin 10. 8% 20% Sodium methylate in methanol 12.6% 20% Stearic alcohol (industrial fatty alcohol) 12.6% 20% N-butyl acetate                              11% 20% Stearic acid (industrial monocarboxylic fatty acid) 5% 35% Alkylbenzene mixtures 11% 20% Organic, non-ionic surface agents 12.6% 23% Ammonium nitrate, whether or not in aqueous solution 0.0% 15% Monoethanolamine and its salts 12.6% 20% Isobutyl alcohol (2-methyl-1-propanol) 10.8% 20% Butan-1-ol (n-butyl alcohol) 10.8% 20% Styrene-butadiene rubber (SBR), food grade as established by the Food Chemical Codex, in primary forms 10.8% 22% Styrene                                9% 18% Hexamethylenediamine and its salts 10.8% 20% Latex from other synthetic or artificial rubbers 10.8% 35% Propylene glycol (propane-1, 2-diol) 10.8% 20% Preparations 12.6% 20% Linear alkylbenzene sulfonic acids and their salts 12.6% 23% 4,4'-Isopropylidenediphenol (bisphenol A, diphenylolpropane) and its salts 10.8% 20% Dipropylene glycol 12.6% 20% Butanone (methyl ethyl ketone) 10.8% 20% Ethyl acetate                                 10.8% 20% Methyl-, ethyl- and propylcellulose, hydroxylated 0.0% 20% Front page picture: Chemical production facilities outside Sao Paulo  Source: Union of Chemical and Petrochemical industries in the state of Sao Paulo (Sinproquim) Focus article by Jonathan Lopez Additional information by Thais Matsuda and Bruno Menini

30-Apr-2024

SINGAPORE (ICIS)–ICIS analysts Sijia Li, Yvonne Shi, Zhibo Xiao, Lucy Shuai, Joanne Wang and Cindy Qiu discuss the trends in China's polyolefins and polyester markets. CHINAPLAS is a major annual plastics and rubbers exhibit in Asia which ran on 23-26 April in Shanghai.

30-Apr-2024