Styrene

MUMBAI (ICIS)–India’s Bhansali Engineering Polymers Ltd (BEPL) plans to nearly triple its acrylonitrile butadiene styrene (ABS) capacity at Abu Road in the northwestern Rajasthan state to 200,000 tonnes/year by March 2026. The plant’s current capacity is 70,000 tonnes/year. The company has determined that a bigger expansion than initially planned is possible after awarding work on the expansion to Japan’s Toyo Engineering, it said in a filing to the Bombay Stock Exchange (BSE) on 20 April. In January 2024, BSEL had proposed a capacity expansion to 145,000 tonnes/year. “After [a] detailed analysis [by Toyo Engineering] it was concluded that overall ABS capacity of 200,000 tonnes/year can be achieved and will be a better option compared to the earlier proposal,” BEPL said. The expansion project will be funded through internal accruals, it said, adding that cost of the expansion project will be finalised by June.

24-Apr-2024

HOUSTON (ICIS)–INEOS Styrolution is temporarily shutting its styrene plant in Sarnia, Ontario, after nearby residents complained they became ill from the plant’s emissions. “At INEOS Styrolution, ensuring the health and safety of our employees and community is paramount,” the company said in a statement. “We are temporarily shutting down our facility located in Sarnia, Ontario, Canada, to perform maintenance and address a mechanical issue. We will resume operations once addressed.” The plant has capacity to produce 445,000 tonnes/year of styrene and 490,000 tonnes/year of ethylbenzene (EB), according to the ICIS Supply and Demand Database. The shutdown came after the Aamjiwnaang First Nation community asked the government to close the plant when members complained of becoming sick and said that data indicated high levels of benzene in the air. Members reported having headaches, nausea and dizziness due to poor air quality. Aamjiwnaang First Nation describes itself as a community of about 2,500 Chippewa Aboriginal peoples located on the St Clair River in the city limits of Sarnia. Last week, Ontario Environment Minister Andrea Khanjin said that she expected the company to “quickly identify and reduce” emissions at the site, according to news reports. In 2020, the Ministry of Environment, Conservation and Parks created the Sarnia Area Environmental Health Project to look into concerns that residents expressed about air pollutants and other quality-of-life impacts from living close to industrial operations in the area. The project includes regularly measuring air quality for potential health risks. The shutdown will further tighten the North American styrene market, which has experienced a number of outages that have put upward pressure on contract and spot prices. Styrolution’s Texas City, Texas, plant has been shut since mid-2023. In addition, Total remains on force majeure from its joint-venture CosMar unit in Carville, Louisiana, and LyondellBasell’s propylene oxide/styrene monomer (POSM) plant in Channelview, Texas, is undergoing maintenance. Shell recently restarted its Scotford, Alberta, styrene unit but it is not operating at full capacity, according to market sources. US styrene contract prices in April were assessed at their highest level since Q3 2023 due to the rise in spot prices, which are up approximately 50% since the beginning of the year. Styrene is a chemical used to make latex and polystyrene resins, which in turn are used to make plastic packaging, disposable cups and insulation. Major North American styrene producers include AmSty, INEOS Styrolution, LyondellBasell Chemical, Shell Chemicals Canada, Total Petrochemicals and Westlake Styrene.

22-Apr-2024

LONDON (ICIS)–Chemical stocks in Europe have firmed in line with the general market in midday trading on Monday, as oil prices subsided and investor unrest eased despite ongoing tensions in the Middle East. Asia-Pacific equities had tumbled in earlier trading on the back of growing hostilities over the weekend after Iran launched ordinance into Israeli airspace late on 13 April. The Israel Defence Force (IDF) confirmed the attack, with Rear Admiral Daniel Hagari stating in a briefing on Sunday that none of the 170 drones launched from Iran had entered Israeli airspace, and fighter jets mobilized to intercept cruise and ballistic missiles had shot almost all of them down. The handful of ballistic missiles that crossed into Israeli territory were intercepted and fell at the Nevatim airbase in the south of the country, but damage to infrastructure was limited and the base is currently operational, he added. Lingering unease from the attack, and the potential for an Israel-Iran conflict to escalate further bled into early Monday trading, with Hong Kong’s Hang Seng index and Japan’s Nikkei 225 index closing down 0.72% and 0.74% respectively. Taiwan and India felt the chill more keenly, with the Taiwan SE and Bombay Sensex bourses closing down 1.38% and 1.14% respectively. European bourses were less unsettled on Monday, with Germany’s DAX and France’s CAC 40 trading up 1.01% and 1.09% respectively, while the UK FTSE 100 was little changed at 13:10 BST. European chemicals stocks moved higher on Monday, with the STOXX 600 chemicals index trading up 0.34% from Friday’s close, with Solvay, Evonik and Arkema among the biggest gainers. The decline in oil prices also deepened from earlier in the day, with the value of Brent crude June futures dropping 87 cents to $89.58/barrel in noon trading. The fall in crude values represents a decline in the overall risk premium priced in at present in response to Middle East tensions, but they are a long way from a more comprehensive rollback. Oil prices have increased by over $8/barrel since mid-March. Crude and downstream pricing as of 12:00 BST Monday Product Latest Previous Change Brent June 89.58 90.45 -0.87 WTI May 84.74 85.66 -0.92 Naphtha 677.00 695.00 -18.00 Benzene 1203.00 1205.00 -2.00 Styrene 1800.00 1815.00 -15.00 An attack from Iran had been threatened for weeks following a strike on its embassy in Damascus, Syria. The fact that the response was telegraphed in advance, consisted largely of slow-moving drones and resulted in little damage and no fatalities, has reassured markets that there is scope for a de-escalation. “The fact that there was limited damage and no loss of life may also provide some comfort to the market, as it may mean a more measured response from Israel,” said ING analysts in an oil market note issued on Monday. Iran said it considers the conflict concluded and US diplomats are reportedly urging restraint in Israel, but further salvos, which will represent Iran’s first direct attack on Israel, means that tensions could rapidly intensify. “The US and allies are pushing for a diplomatic response, while the risk is that hardliners within the Israeli government push for a more aggressive response,” ING added. Multiple western governments have officially condemned Iran for the attack which took place on the same day that Iran’s Revolutionary Guard Corps seized a ship passing along the Strait of Hormuz, according to data provider Xeneta. Any moves to sanction Iran or measures that could restrict the country’s flow of oil into global markets could tighten supplies in the short term, ING added. Focus article by Tom Brown Thumbnail photo: The bell ceremony at the Euronext exchange in Brussels, Belgium. Source: Shutterstock

15-Apr-2024

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 12 April 2024. China Mar petrochemical markets mixed; Apr demand on seasonal uptick By Yvonne Shi 12-Apr-24 14:19 SINGAPORE (ICIS)–Fluctuations in China’s domestic petrochemical markets were limited in March, yielding a mixed performance during the month, while a seasonal improvement in demand is expected in the near term. Tight intra-Asia container shipping space dampens recycling trades By Arianne Perez 12-Apr-24 13:34 SINGAPORE (ICIS)–Major Asian recyclers are feeling the pinch of continued uptrend in spot container freight costs for trade within Asia since March. Asia naphtha demand slows down; supply stays ample By Li Peng Seng 11-Apr-24 13:00 SINGAPORE (ICIS)–Asia’s naphtha crack, the spread between Brent crude and the chemical feedstock prices, hit a five-month low recently and it will remain under pressure in the weeks ahead as ample supplies, slower demand and firm crude prices limit any improvement in the spread. Asia ADA sees plant shutdowns amid supply overhang By Josh Quah 11-Apr-24 11:25 SINGAPORE (ICIS)–Asia’s adipic acid (ADA) markets have begun to crack under the cost pressure and weak demand from the main polyurethane (PU) downstream sector. Fitch downgrades China rating outlook to ‘negative’ as debts pile up By Pearl Bantillo 10-Apr-24 15:16 SINGAPORE (ICIS)–China’s fiscal challenges amid rising government debt and its prolonged property slump weighing on recovery prospects prompted Fitch to revise down its credit rating outlook for the world’s second-biggest economy to “negative” from “stable”. Korea trade body starts antidumping probe on China SM imports By Luffy Wu 09-Apr-24 14:18 SINGAPORE (ICIS)–The Korea Trade Commission has decided to initiate an anti-dumping investigation on imports of styrene monomer (SM) from China. INSIGHT: Positive China Q1 data overshadowed by property sector gloom By Nurluqman Suratman 09-Apr-24 12:00 SINGAPORE (ICIS)–China's economic narrative in early 2024 reflects a 'tale of two cities', with its ailing property sector once again playing the crucial protagonist against recent data which offered flickers of hope for the country's continued recovery this year. Saudi Arabia hikes benchmark May Arab Light OSP for Asian customers By James Dennis 08-Apr-24 18:15 SINGAPORE (ICIS)–Saudi Arabia, the world’s largest crude exporter, increased its Official Selling Prices (OSP) for its benchmark Arab Light crude for customers in Asia for the second month in succession. Oil slumps by more than $2/bbl on Israel-Hamas ceasefire hopes By Nurluqman Suratman 08-Apr-24 12:23 SINGAPORE (ICIS)–Oil prices fell by more than $2/barrel on Monday amid easing tensions in the Middle East after Israel further withdrew troops from southern Gaza and signalled a willingness to resume ceasefire talks with Palestinian militant group Hamas.

15-Apr-2024

HOUSTON (ICIS)–Shipping container rates continue to fall, liquid chemical tanker rates are stable to softer, and the bridge collapse at the Port of Baltimore has led to longer delivery times for imports, highlighting this week’s logistics roundup. CONTAINER RATES Rates for shipping containers from east Asia and China to the US continue to fall along with average global rates as capacity remains ample to handle the longer routes as commercial vessels continue to avoid the Suez Canal. Supply chain advisors Drewry said average rates ticked lower this week but remain 64% higher than the same week a year ago, as shown in the following chart. Rates from Asia to the US and Europe have also continued to fall, as shown in the following chart. Drewry said it expects a minor decrease in Transpacific spot rates and for stability along the Transatlantic and Asia-Europe trade lanes. Judah Levine, head of research at online freight shipping marketplace and platform provider Freightos, said rates along the US East Coast have fallen since the collapse of the Key Bridge in Baltimore, which signals to him that regional container traffic continues to flow. Levine said downward pressure will continue because of soft demand and it being the slow season for container trade, but that if threats persist in the Red Sea and commercial vessels continue to divert away from the Suez Canal, prices will remain above normal. Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), which are shipped in pellets. They also transport liquid chemicals in isotanks. PORT OF BALTIMORE The Unified Command (UC) continues to remove containers from the Dali and clear wreckage from the collapsed bridge at the entrance to the Port of Baltimore. Source: Key Bridge Response 2024 While the closure of the port has not had a direct impact on the flow of chemicals, a market participant in Ohio said it is seeing delays in delivery times for imports as vessels originally destined to offload in Baltimore are getting re-routed to other ports. The US Army Corps of Engineers (USACE) expects to open a limited access channel 280 feet wide and 35 feet deep by the end of April, and are aiming to reopen the permanent, 700-foot-wide by 50-foot-deep federal navigation channel by the end of May, restoring port access to normal capacity. As of 11 April, approximately 38 containers have been removed, the UC said, which is necessary for safe access to them begin removing the segments of the fallen bridge that lie across the ship’s bow. While marine traffic is still limited, 69 vessels have transited through since the creation of the temporary alternate channels. LIQUID CHEM TANKERS US liquid chemical tanker freight rates as assessed by ICIS held mostly steady this week – except from the US Gulf Coast (USG) to India. There is downward pressure on rates along the USG-Asia trade lane as several outsiders have come on berth for both April and May, adding to the available tonnage for completion cargos. On the other hand, rates from the USG to Rotterdam were steady this week even as space is limited and there are no outsiders on berth. Contract tonnage continues to prevail, with continued interest in styrene, MTBE and ethanol. There has been activity on the spot market, but owners are still working with COA customers to finalize their needs before committing to others. For the USG to South America trade lane rates remain steady with several inquiries for methanol widely viewed in the market. PANAMA CANAL Wait times for non-booked vessels ready for transit edged higher both directions this week, according to the Panama Canal Authority (PCA) vessel tracker and as shown in the following image. Wait times last week were 0.8 days for northbound traffic and 0.8 days for southbound traffic. Please see the Logistics: Impact on chemicals and energy topic page With additional reporting by Emily Friedman and Kevin Callahan

12-Apr-2024

HOUSTON (ICIS)–The 2024 Atlantic hurricane season is expected to be extremely active, and has similar characteristics to the 2020 season, meaning it could threaten offshore oil and natural gas production in the US Gulf and chemical producers along the Gulf Coast. Source: Colorado State University (CSU)  A report late last week from researchers at CSU follows a report released on 27 March by US meteorology firm AccuWeather that also predicted an active hurricane season. The US National Oceanic and Atmospheric Administration (NOAA) will issue its first seasonal hurricane report in late May. So far, the CSU team said it is seeing similar characteristics to hurricane seasons in 1998, 2010 and 2020. The 2020 season saw 30 named storms, of which 13 became hurricanes and six of those were major storms. Storms in 2020 that impacted chemical operations included: Tropical Storm Marco hit Louisiana on 24 August. Days later, Hurricane Laura made landfall as a powerful category 4 storm in Louisiana near the border of Texas. Then, Hurricane Sally made landfall on 16 September in Alabama as a category 2 storm, followed by Tropical Storm Beta which made landfall less than a week later in Texas. Hurricane Delta followed a similar path as Hurricane Laura, making landfall on 9 October as a category 2 storm in Louisiana. Weeks later, Hurricane Zeta hit Cocodrie, Louisiana, as a category 2 storm. Hurricane Laura knocked 16% of total US ethylene capacity and 11% of total US propylene capacity offline, according to the ICIS Supply and Demand Database. About 18% of polyethylene (PE) production was offline, and 26% of polypropylene (PP) production was offline. Styrene butadiene rubber (SBR), a synthetic rubber used to make tires, had 46% of its US capacity offline. The CSU team said record warm tropical and eastern subtropical Atlantic sea surface temperatures are the primary factor for the active season prediction. “When waters in the eastern and central tropical and subtropical Atlantic are much warmer than normal in the spring, it tends to force a weaker subtropical high and associated weaker winds blowing across the tropical Atlantic,” researchers said. “These conditions will likely lead to a continuation of well above-average water temperatures in the tropical Atlantic for the peak of the 2024 Atlantic hurricane season.” Warm ocean waters serve as the fuel source for hurricanes, the CSU team said. “In addition, a warm Atlantic leads to lower atmospheric pressure and a more unstable atmosphere,” they said. “Both conditions favor hurricanes.” The current El Nino is likely to transition to a La Nina by the peak of the season – from August to October. Hurricane season begins on 1 June and runs through the end of November. Hurricanes and tropical storms can disrupt the North American petrochemical industry, because oil and gas production are concentrated in the Gulf of Mexico. Also, many of the nation's refineries and petrochemical plants are along the US Gulf Coast in the states of Texas and Louisiana. Even the threat of a major storm can disrupt oil and natural gas production, because companies must evacuate US Gulf platforms as a precaution. Thumbnail image shows a weather satellite orbiting over a hurricane. Photo by John Pulsipher/image from Shutterstock

08-Apr-2024

SINGAPORE (ICIS)–China’s petrochemical futures markets were tracking gains in crude prices on Monday, with Brent trading at above $87/bbl, on bullish sentiment following a return of the world’s second-biggest economy into manufacturing expansion mode. Official, Caixin March manufacturing PMIs at above 50 China methanol, SM futures prices lead gains External demand picking up for selected goods At the close of morning trade, futures prices of major petrochemicals in Chinese commodity exchanges were up by 0.2% to 1.7%. China petrochemical futures markets Prices as of 03:30 GMT (CNY/tonne) % change vs 29 March Linear low density polyethylene (LLDPE) 8,279 0.60% Polyvinyl chloride (PVC) 5,803 0.20% Ethylene glycol (EG) 4,499 0.50% Polypropylene (PP) 7,542 0.80% Styrene monomer (SM) 9,451 1.40% Paraxylene* 8,534 0.70% Purified terephthalic acid (PTA) * 6,016 1.30% Methanol* 2,518 1.70% Sources: Dalian Commodity Exchange, *Zhengzhou Commodity Exchange At midday, Brent crude was up 30 cents at $87.30/bbl, while US crude gained 31 cents at $83.48/bbl. Crude futures were also supported by expectations of tighter supply amid output cuts by OPEC and its allies, which include Russia. Manufacturing activity in China expanded for the first time in six months, based on official data in March, generating a purchasing managers’ index (PMI) reading of 50.8, as companies accelerated production following the Lunar New Year holiday in the previous month. A separate reading by Chinese media group Caixin was more upbeat, with a higher March PMI reading of 51.1, the highest recorded since February 2023. In Caixin’s data, factory output continued to expand for the fifth straight month. The Caixin PMI surveys small and medium-sized enterprises (SMEs) and export-oriented enterprises located in eastern coastal regions, while the official PMI is tilted toward larger state-owned enterprises. A reading above 50 indicates expansion, while a reading below denotes contraction. “Both supply and demand expanded at a faster pace amid the market upturn. In March, growth in manufacturers’ output and total new orders accelerated, with the former hitting a 10-month high,” Caixin Insight Group senior economist Wang Zhe said. “External demand also picked up pace thanks to the recovery in the global economy, pushing the gauge for new export orders to its highest level since February 2023,” the economist added. “Overall, the manufacturing sector continued to improve in March, with expansion in supply and demand accelerating, and overseas demand picking up,” Wang said. “Manufacturers increased purchases and raw material inventories amid continued improvement in business optimism. However, employment remained in contraction and a depressed price level worsened,” Wang added Besides the seasonal effect, firming overseas demand also helped to push up Chinese factory activities, local brokerage Haitong Securities wrote in a note, citing that furniture, transportation equipment and electronics were enjoying strong demand. China is projected to post around a 5% GDP growth this year, slower than the 5.2% pace recorded in 2023, with a slumping property sector posing a major drag on overall economic prospects. Property and other related sectors account for about a fifth of China’s GDP. While the property slump may persist, other sectors such as electric vehicles, new energy and digital economy are posting healthy growth, said Zhang Junfeng, senior analyst at Shenzhen-based brokerage China Merchant Securities. Focus article by Fanny Zhang ($1 = CNY7.23) Additional reporting by Nurluqman Suratman Thumbnail image: At Lianyungang Port in east China's Jiangsu Province, 26 March 2024. (Shutterstock)

01-Apr-2024

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

HOUSTON (ICIS)–Trinseo has started the process to sell its 50% stake in Americas Styrenics (AmSty), the US-based engineered materials producer said on Wednesday. AmSty makes styrene and polystyrene (PS). The company has initiated the ownership provision in the joint venture agreement. That provision includes a structured mechanism that will lead to the sale of Trinseo's stake in AmSty. "We have a clear pathway to divest our interest in the joint venture," said Frank Bozich, CEO. "We expect the exit process to lead to a definitive arrangement no later than early 2025." Trinseo did not name any prospective buyers or how much money it could make on the deal. Trinseo will spend the proceeds of the sale on paying down $1.077 billion in recently issued term loans. Those loans mature in 2028. Chevron Phillips Chemical owns the remaining stake in AmSty. Trinseo is also trying to sell its wholly owned styrenics assets, with a focus on marketing individual plants and regional businesses. Trinseo's other businesses include Latex Binders, Base Plastics and Engineered Materials. Thumbnail shows a cup made of polystyrene. Image by ICIS.

13-Mar-2024

SAO PAULO (ICIS)–Unigel is to “temporarily stop” nitrogen fertilizers production because of high costs and low prices, effective on Wednesday, the Brazilian chemicals and fertilizers producer said. Unigel said natural gas prices in Brazil are one of the highest in the world, and six times higher than in the US or the Middle East, “despite efforts” by multiple stakeholders, including the government, to lower them. “Unigel suffered losses throughout 2023 and also in 2024, but it retained the majority of its staff in expectations that negotiations and work fronts seeking to reduce the price of natural gas would be successful,” said the company. “The company will continue to have a minimum infrastructure for maintenance and preservation of assets, in addition to ensuring compliance with legal and socio-environmental commitments.” Unigel’s move comes after it signed a tolling agreement with Petrobras in December for the functioning of two nitrogen fertilizers plants in the states of Sergipe and Bahia. The two plants were leased to Unigel by Petrobras in 2019. It also comes just weeks after Unigel’s creditors agreed to a debt restructuring of the company’s beleaguered financial metrics. The plant in Camacari, Bahia, can produce 475,000 tonnes/year of ammonia and 475,000 tonnes/year of urea. The plant in Laranjeirs Sergipe, can produce 650,000 tonnes/year of urea, 450,000 tonnes/year of ammonia and 320,000 tonnes/year of ammonium sulphate (AS). “[After leasing the plants in 2019] Unigel contributed to reducing the country's extreme dependence on the import of nitrogen fertilizers by approximately 15%, which is essential for agribusiness, today the most important sector of our economy, and directly impacts Brazilians' food security,” said Unigel. “Furthermore, Unigel is the only national producer of ARLA, an additive added to diesel engines to reduce the emission of polluting gases.” The company added that once the precedent conditions in the tolling contract have been met, it would be able to “reevaluate the resumption” of production. Unigel's chemicals divivions produces styrene and polystyrene (PS), among other materials. Front page picture source: Unigel

06-Mar-2024