Ethylene glycol

HOUSTON (ICIS)–Costs for shipping containers from Asia to South America are soaring while rates are plummeting along the other major trade lanes and Maersk will resume transits through the Panama Canal after administrators said they expect to be back to normal in 2025, highlighting this week’s logistics roundup. ASIA-SOUTH AMERICA CONTAINER RATES Rates for shipping containers from Asia to the US and Europe continue to fall, but rates from Asia to South America are spiking, according to data from ocean and freight rate analytics firm Xeneta and as shown below. Market participants said space along the Asia-South America route has tightened as China is exporting a lot of electric vehicles (EVs) to Brazil. A market participant told ICIS that Chinese automaker BYD has booked more than 10,000 containers to ship EVs to Brazil in April. Autos are typically transported using roll-on, roll-off (RoRo) ships that are designed to carry wheeled cargo. But the surge in EV imports from China has taken up most of the RoRo capacity, forcing China to send autos in containers, which is more expensive. A 20-foot shipping container can hold one or two vehicles, and a 40-foot container can hold up to four standard-sized cars, according to IncoDocs, a shipping solutions provider. ASIA-US CONTAINER RATES FALL Rates from east Asia and China to both US coasts continue to fall, along with rates from Asia to Europe, as shown in the following charts. Asia-US rates from online freight shipping marketplace and platform provider Freightos were largely steady this week, suggesting to the company's head of research that rates might be nearing a floor. Judah Levine, head of research at Freightos, said if diversions continue into the Q3 peak season months, shippers can expect rates to increase relative to this floor. STRAIT OF HORMUZ Global shippers are watching the situation in the Gulf of Hormuz after Iran’s Revolutionary Guard Corps (IRGC) seized a container ship operated by Mediterranean Shipping Co (MSC) near the Strait. "If attacks like this one continue, broaden, or Iran moves to completely close the strait, Middle East container flows would feel the strongest impact," Levine said. A closure would see ports in Kuwait, Iraq and most of the United Arab Emirates (UAE) become inaccessible. Saudi Arabia, with access to their Red Sea port access already challenged, would see their Gulf port access cut off as well. "These disruptions would also impact container hubs in India some of which are part of services that connect south Asia and the Middle East," Levine said. 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. 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. Source: Key Bridge Response 2024 LIQUID CHEM TANKERS US chemical tanker freight rates assessed by ICIS were stable to lower this week with rates for parcels from the US Gulf (USG) to Rotterdam and the USG to Brazil unchanged. However, rates from the USG to Asia ticked lower and all other trade lanes held steady. On this route, there is no shortage of glycol enquiries. From the USG to Rotterdam, there are bits of part cargo space still available for April. Most of the outsiders’ vessels that were on berth have already sailed, and only the regulars remain at this time as they push tonnage availability. Freight rates are now expected to remain steady for the time being. PANAMA CANAL Wait times for non-booked vessels ready for transit edged higher for northbound vessels and were unchanged for southbound vessels this week, according to the Panama Canal Authority (PCA) vessel tracker and as shown in the following image. Wait times last week were 0.9 days for northbound traffic. The Panama Canal Authority (PCA) said current forecasts indicate that steady rainfall will arrive later this month and continue during the rainy season, which would allow the PCA to gradually ease transit restrictions and traffic could return to normal by 2025. Global container shipping major Maersk said it will resume Panama Canal transits for its OC1 service beginning 10 May, ending its “two-loop” setup it established in January because of transit restrictions brought on by a persistent drought. Please see the Logistics: Impact on chemicals and energy topic page Additional reporting by Bruno Menini and Kevin Callahan

19-Apr-2024

LONDON (ICIS)—ExxonMobil Chemical France has announced plans to close its chemical production at Gravenchon, in Normandy in France in 2024, subject to the relevant government approvals. According to a press release, the steamcracker and related derivatives units and logistics facilities will be shut down. The company said the site has lost more than €500 million since 2018 and despite efforts to improve the site’s economics, it remains uncompetitive. According to the ICIS Supply & Demand database, the cracker has the capacity to produce 425,000 tonnes/year of ethylene and 290,000 tonnes/year of propylene and was started up in 1967. A butadiene (BD) unit is also at the site and associated derivatives include polyethylene (PE), polypropylene (PP). ExxonMobil's nearby Port Jerome refinery will continue to operate supplying fuels, lubricants, basestocks and asphalt. The closure will impact 677 jobs through 2025. ExxonMobil said this planned closure is entirely separate from the Esso S.A.F. announcement regarding its proposed sale of the Esso Fos-sur-Mer refinery and South France logistics assets. Charles Amyot, president of ExxonMobil companies in France said: “It has been a very difficult decision for us to take, but we cannot continue to operate at such a loss.” This week Saudi Arabia's Sabic also revealed plans to permanently close its Olefins 3 cracker – one of two at their Geleen, Netherlands site.

11-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)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 5 April 2024. Oil at six-month highs; Brent crude at above $91/bbl on Mideast tensions By Nurluqman Suratman 05-Apr-24 11:00 SINGAPORE (ICIS)–Oil prices were extending gains, with Brent crude hitting past the $91/barrel mark on Friday, fueled by escalating geopolitical tensions in the Middle East which could disrupt supply amid output cuts by OPEC and its allies (OPEC+). INSIGHT: NE Asia C2 shipments slower for May, arb narrowing for SE Asia By Josh Quah 04-Apr-24 21:35 SINGAPORE (ICIS)–With spot discussions now turned to May arrivals, Asia ethylene markets are in a wait-and-see moment. Taiwan petrochemical operations normal despite 7.7-magnitude quake By Nurluqman Suratman 03-Apr-24 15:18 SINGAPORE (ICIS)–Operations at most petrochemical plants in western Taiwan were unaffected by a major quake that struck off the eastern coast of the island early on Wednesday, but the port at Formosa Petrochemical Corp’s (FPCC) Mailiao refinery was reportedly shut. Singapore March manufacturing improves; external headwinds persist By Nurluqman Suratman 03-Apr-24 12:12 SINGAPORE (ICIS)–Manufacturing activity in Singapore improved in March, boosted by higher export orders, but may remain weighed down in the near term by global economic weakness. INSIGHT: India’s PVC in the eye of the storm; ADD inquiry launched, BIS regulation looms By Damini Dabholkar 02-Apr-24 16:00 SINGAPORE (ICIS)–India’s polyvinyl chloride (PVC) market was active over the past two weeks, with April offers being announced, and notifications being released for two regulations.

08-Apr-2024

HOUSTON (ICIS)–Rates for shipping containers from east Asia and China to the US continue to slide, liquid chem tanker rates surged from the US Gulf to Europe and Asia, and the US Army Corps of Engineers (USACE) plans to open the Port of Baltimore by the end of the month after the Francis Scott Key bridge collapsed on 26 March, highlighting this week’s logistics roundup. PORT OF BALTIMORE US President Joe Biden toured the site on Friday and noted that the US Army Corps of Engineers (USACE) has announced a plan to have the channel open by the end of April. “In collaboration with industry partners, USACE expects to open a limited access channel 280 feet wide and 35 feet deep,” USACE said on Thursday. “This channel would support one-way traffic in and out of the Port of Baltimore for barge container service and some roll on/roll off vessels that move automobiles and farm equipment to and from the port.” USACE engineers 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. While not a big hub for chemical imports/exports, the closure of the Port of Baltimore because of the bridge collapse will have some ripple effects for logistics in the region. US-based catalyst producer WR Grace said operations at its Curtis Bay Manufacturing site, located to the northwest of the collapsed bridge, have been unaffected despite its proximity to the accident site. Chemicals make up only about 4% of total tonnage that moves through the port, according to data from the American Chemistry Council (ACC). The ACC said less than 1% of all chemicals involved in waterborne commerce, both domestic and trade volumes, pass through Baltimore. The value of chems that pass through the port is significant, the ACC said, totaling $954 million in 2023, which averages about $3 million/day or $18 million/week. CONTAINER RATES CONTINUE TO SLIDE Rates for shipping containers from Asia to the US continue to fall, in line with the decline in average global rates. The following charts from supply chain advisors Drewry show the decrease in average global rates and from Shanghai to the US and Europe. Judah Levine, head of research at online freight shipping marketplace and platform provider Freightos, said rates could be nearing “a diversion-adjusted floor”. “Decreases from January/February peaks on the impacted ex-Asia lanes have slowed in recent weeks, and recent rate announcements by some carriers suggest they are hoping to keep rates at the $3,000-$3,500/FEU (40-foot equivalent unit) level to Europe and $3,500-$4,300/FEU level to the Mediterranean this month,” Levine said. LIQUID TANKER RATES SURGE US chemical tanker freight rates assessed by ICIS rose this week on the major trade lanes – from the US Gulf (USG) to ARA and to Asia. For larger parcels, spot rates ticked higher to both regions as several outside vessels have expressed interest to come on berth for this route in April and for May. This in turn, has curbed the rates from rising any further and somewhat modest. Premiums for discharge in China have also closed the gap on main port rates, as China’s activity buying glycol has picked up. From the USG to Rotterdam also has strengthened following the recent Easter holiday, as strong interest in EDC has been seen in the market. There has been activity on the spot market, but owners are still working with COA customers to finalize their needs before committing to others. PANAMA CANAL Wait times for non-booked vessels ready for transit fell to below one day in both directions this week, according to the PCA's vessel tracker and as shown in the following image. Wait times last week were 2.7 days for northbound traffic and four days for southbound traffic. Additional reporting by Kevin Callahan

05-Apr-2024

SINGAPORE (ICIS)–South Korea's Hyosung TNC is investing $1 billion to build multiple bio-textile materials plants in Vietnam's Ba Ria-Vung Tau province, starting with a new 50,000 tonnes/year bio-butanediol (bio-BDO) plant slated for start-up in 2026. The company aims to eventually boost its overall bio-BDO production capacity in Vietnam to 200,000 tonnes/year and will be establishing a vertically integrated production system for bio-spandex, from raw material to fiber, the company said in a statement on 2 April. Hyosung TNC is the fiber production unit of South Korean industrial giant Hyosung Group. BDO is a chemical used as a raw material for poly tetramethylene glycol (PTMG), which is used to make spandex fiber. Bio-BDO is produced by fermenting sugars derived from sugarcane, replacing traditional fossil raw materials such as coal. In addition to spandex fiber, BDO applications include engineering plastics, biodegradable packaging, and footwear soles. Hyosung TNC will produce bio-BDO at its factory in the southern Ba Ria-Vung Tau province, manufacture PTMG at a nearby factory in Dong Nai, located south of Ho Chi Minh City, and then use this to mass-produce its regen bio-spandex at the Dong Nai Spandex factory. As of this year, the global sustainable textile and fashion market is valued at around $23 billion, with an average annual growth rate exceeding 12.5%, according to Hyosung TNC. It is expected to grow to about $75 billion by 2030, including upstream and downstream businesses, it said. Hyosung TNC plans to increase the sales volume of sustainable spandex, which currently accounts for 4% of its total spandex sales, to about 20% by 2030. "The bio business will become a core pillar of Hyosung for the next 100 years. We will strengthen our global market presence based on sustainable bio materials,” Hyosung TNC chairman Hyun-Joon Cho said. The company’s future bio-BDO plants will be powered by technology from Geno, a US-based sustainable materials firm. Vietnam is the fourth-biggest economy in southeast Asia and is a net importer of petrochemicals. The southern Ba Ria-Vung Tau province is home to the country's first integrated petrochemical complex, which was recently completed and can produce around 1.4m tonnes/year of polyolefins. Thumbnail image: At a spandex production site in Asia, 18 March 2024 (Costfoto/NurPhoto/Shutterstock)

04-Apr-2024

LONDON (ICIS)–Click here to see the latest blog post on Chemicals & The Economy by Paul Hodges, which looks at the problems facing US ethylene exporters. 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. Paul Hodges is the chairman of consultants New Normal Consulting.

02-Apr-2024

SINGAPORE (ICIS)–INEOS said on Monday that it has completed acquisition of TotalEnergies’ 50% share in their three joint ventures, as well as some other infrastructure assets in France. The targets are Naphtachimie, Appryl and Gexaro, which were 50:50 joint ventures between INEOS and the French energy major at Lavera in southern France. Financial details of the acquisition were not disclosed. The deal includes one of Europe’s largest steam crackers which can produce 720,000 tonnes/year of ethylene under Naphtachimie; an aromatics business with a 270,000 tonne/year capacity under Gexaro; and a 300,000 tonne/year polypropylene (PP) business under Appryl. INEOS also acquired a naphtha storage, as well as other infrastructure assets, including part of TotalEnergies’ ethylene pipeline network in France. INEOS will now fully integrate the Naphtachimie, Gexaro and Appryl petrochemical businesses, assets and infrastructure into INEOS Olefins & Polymers South at Lavera in southern France, the company said. Gexaro, which is located on the Lavera refinery site will continue to be operated by Petroineos.

01-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

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 28 March 2024. Asia PX supply to decrease; demand outlook uncertain By Samuel Wong 28-Mar-24 13:08 SINGAPORE (ICIS)–Supply for paraxylene (PX) in Asia is expected to gradually decrease heading into the second quarter of 2024 as a result of several planned maintenance shutdowns. INSIGHT: GCC signs deal with Turkey to start FTA talks as part of diversification plans By Nurluqman Suratman 28-Mar-24 00:54 SINGAPORE (ICIS)–The Gulf Cooperation Council's (GCC) recent deal with Turkey to launch negotiations for a free trade agreement (FTA) further signals the bloc's commitment to diversify away from oil revenues. PODCAST: A tale of two olefins – diverging trends in Asia's olefins markets By Julia Tan 27-Mar-24 19:11 SINGAPORE (ICIS)–Asia's ethylene (C2) market will see northeast Asia supply in Q2 remain ample on the back of relatively high run rates at northeast Asian crackers. Saudi Aramco eyes further chemical investments in China with local partners By Nurluqman Suratman 26-Mar-24 12:03 SINGAPORE (ICIS)–China has a "vitally important" place in Saudi Aramco's global investment strategy, with the energy giant actively developing additional investment opportunities with its Chinese partners in the chemicals sector, Aramco president and CEO Amin Nasser said. China’s Sinopec 2023 profit falls 13% as chemicals incur loss for second year By Fanny Zhang 25-Mar-24 15:14 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. Asia PC makers grapple with poor Chinese demand By Li Peng Seng 25-Mar-24 10:57 SINGAPORE (ICIS)–Asia’s polycarbonate (PC) makers have been struggling to raise prices in China recently due to slow demand, while production costs continue to rise.

01-Apr-2024