Bisphenol-A (BPA)

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 3 April 2024. Asian BD discussions under pressure as buying slows down By Ai Teng Lim 03-May-24 11:06 SINGAPORE (ICIS)–Asian spot butadiene (BD) import discussions are slipping due to slowing demand, fueled by holiday closures this week and persistent external macroeconomic headwinds. SABIC Q1 net income falls 62%, warns of industry overcapacity By Nurluqman Suratman 02-May-24 10:55 SINGAPORE (ICIS)–SABIC's net income fell by 62% year on year to Saudi Riyal (SR) 250 million in the first quarter amid a drop in prices and sales volumes, the chemicals major said late on Wednesday. CHINAPLAS ’24: PODCAST: China's polymer industry targeting high-end products amid fierce competition By Zhibo Xiao 30-Apr-24 16:17 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. China domestic acetic acid demand to weaken; sellers eye more exports By Jady Ma 30-Apr-24 11:25 SINGAPORE (ICIS)–China’s domestic acetic acid market may face headwinds from increased supply and weaker demand in May after generally firming up in April, while producers are exporting more volumes. Asia BPA makers will not increase run rates until margins improve By Li Peng Seng 29-Apr-24 12:25 SINGAPORE (ICIS)–Asian bisphenol A (BPA) makers are expected to stay entrenched in the months ahead despite falling Chinese imports, as they seek to combat firm feedstock costs. Saudi Aramco, Chinese Rongsheng plan liquids-to-chemicals JV in Jubail By Nurluqman Suratman 29-Apr-24 11:55 SINGAPORE (ICIS)–Saudi energy giant Aramco and Chinese Rongsheng Petrochemical are planning a joint venture liquid-to-chemicals expansion project in Jubail, Saudi Arabia.

06-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

LONDON (ICIS)–Red Sea shipping issues have been the hot topic in Q1, with import delays opening up domestic demand opportunities and leading to a firmer price sentiment in some markets. There has been some increase in buying in January, but underlying demand is yet to recover in a shaky macro-economic climate. Europe ICIS editors Jane Gibson (acetone and phenol), Heidi Finch (bisphenol A and epoxy resins), Mathew Jolin-Beech (methyl methacrylate) and Meeta Ramnani (polycarbonate) discuss the impact of rising sea freight and feedstock costs in the acetone, phenol and derivatives markets. Phenol and acetone markets look to downstream demand pull for support Red Sea crisis set to continue impacting MMA supply for remainder of Q1 Europe epoxy and BPA markets exposed to Red Sea issues/import delays, tendency firmer European PC suppliers benefiting from the unavailability of Asian imports Podcast editing by Meeta Ramnani

09-Feb-2024

SINGAPORE (ICIS)–Here are the 2024 Asia Outlook stories which ran on ICIS news throughout December and January. Click on a headline to read the full story. OUTLOOK ‘24: China acrylic acid to see shifts in focus, limited supply-demand changes New acrylic acid plants in China are mostly scheduled to start up in the second half of 2024, with the timeline remaining uncertain. Apart from expansions of supplementary acrylic esters plants, new capacities are also seen in other downstream industries such as water treatment. OUTLOOK ’24: Asia ethylene dour sentiment may undermine derivative expansion While Asia ethylene markets are likely to see demand in some regions being able to keep pace with new planned capacity, a bearish outlook for the coming year threatens to dampen further recovery hopes for the commodity. OUTLOOK ‘24: Asia etac, butac demand to stay limited amid China economic woes Asia’s ethyl acetate (etac) demand may remain limited in Q1 2024 amid challenging macroeconomic conditions and concerns of China’s frail demand. OUTLOOK ‘24: Macroeconomic headwinds to continue to impact Asia R-PET Sustainability targets will remain insufficient to bolster downstream demand for Asian recycled polyethylene terephthalate (R-PET) in the first half of 2024. OUTLOOK ‘24: China propylene supply to be driven by PDH run rates China's domestic propylene market will continue to see expanding capacities in 2024. Spot supply is expected to depend more on the operating rates of propane dehydrogenation (PDH) units as PDH will become the largest production route in the new year. OUTLOOK ’24: Asia acrylic acid and acrylates face strong economic headwinds, ample supply Asian acrylic acid and acrylate esters faced a turbulent 2023, with hopes of a recovery dented by multiple setbacks. OUTLOOK '24: Asia ECH, LER recovery hampered by supply overhang, tepid demand The recovery in Asia’s epichlorohydrin (ECH) and liquid epoxy resins (LER) markets, which hinges on the primary end-use market of the construction industries, will be hampered by continued demand headwinds and increases in ECH and LER capacities. OUTLOOK '24: Asia propylene braces for volatility, downstream demand growth to slow Asia’s propylene import market is set to face increased volatility in 2024 as market participants opt to lower term volumes in favour of higher spot allocations. Beyond this, uncertainties in upstream markets also continue to compound expectations that 2024 spot markets will see more volatility. OUTLOOK ’24: Asia BD to wrestle between tight supply and muted downstream demand Asia's spot butadiene (BD) market has been gripped by supply constraints for some time now. A respite seems to be quite unlikely in the near term, or at least for Q1 2024, so long as operations at regional crackers remain sub-optimal. OUTLOOK ’24: Asia glycol ethers await demand rebound, BG supply to contract Demand for Asia glycol ethers may stay sluggish in Q1 2024, while the butyl glycol (BG) market will grapple with tighter supply in Q1 2024. OUTLOOK '24: Oversupplied China PP market to face obstacles for export growth Faced with trade barriers from multiple countries and uncompetitive raw material costs, China PP market is expected to face rising capacity and saturated demand in 2024. OUTLOOK '24: SE Asia PP overshadowed by oversupply; new import regulations add uncertainties Southeast Asia's polypropylene (PP) market remains overshadowed by an oversupply situation that may worsen further with additional production capacities coming on stream in China and some major southeast Asian producers ramping up their commercial operations. OUTLOOK ’24: China ACN demand growth to trail behind new capacity additions China's acrylonitrile (ACN) market is set to see a concurrent rise in both supply and demand in 2024. OUTLOOK '24: China benzene supply to tighten in H1 on demand pick-up China’s benzene market will remain tightly balanced in 2024 on the back of slowing capacity expansions from large integrated refining and petrochemical facilities, amid new downstream plant start-ups. OUTLOOK '24: Asia melamine could see demand support, stable costs China's melamine makers have hopes to see steady buying interest on the domestic and external fronts going into 2024, even as the market could continue to face some pressure from high run rates in China. OUTLOOK ’24: Supply overhang, slow derivative to blunt Asia adipic acid recovery While most of the year seemed lacklustre for Asia adipic acid markets, ICIS data showed that adipic acid did see an 8.69% year-on-year improvement in exports from northeast Asia from January to October*, indicating a year of recovery overall for the commodity in spite of the pessimistic climate. OUTLOOK ‘24: Mideast conflict to keep regional PE, PP demand weak in Q1 Demand for polypropylene (PP) and polyethylene (PE) in the Middle East is expected to remain weak throughout the first quarter of 2024, weighed down by a prolonged Israel-Hamas conflict and amid fears it would spread to neighbouring countries. OUTLOOK ’24: China PE supply-demand to rebalance on capacity rise China’s PE capacity expansion shows an overall slowdown in 2024. However, competitive pressures persist for high-density polyethylene (HDPE), while demand is poised for a steady and modest increase. OUTLOOK ’24: SE Asia PE face challenges from China, Vietnam demand weakness The southeast Asian polyethylene (PE) market is expected to see a sluggish start to the new year, with demand from China showing little sign of any improvement while demand in Vietnam also stagnates amid an increasingly competitive price environment. OUTLOOK '24: Asia PX looks to gasoline markets, downstream for direction The paraxylene (PX) markets in Asia will look towards the gasoline markets as well as the downstream purified terephthalic acid (PTA) and polyester sectors for direction in 2024. OUTLOOK ’24: Asia MEK facing strong upstream pressure; demand outlook mixed Heading into 2024, market players are divided about demand in the Asia methyl ethyl ketone (MEK) markets. The main driver of the market in early 2024 could likely be the strong feedstock naphtha market. OUTLOOK ’24: Asia IPA braces for upstream-driven volatility, rising capacity In 2024, Asian isopropanol (IPA) makers are likely to face pressures from the acetone volatility which plagued the market in 2023, as well as increased supply when new capacities in China come on stream in Q1 2024. OUTLOOK ‘24: China demand recovery to play major role in India PE, PP sentiment Demand for polypropylene (PP) and polyethylene (PE) in the Indian market during the first half of 2024 will be tightly linked to an expected demand recovery in China after the Lunar New Year Holidays in February. OUTLOOK ‘24: Asia toluene pins hopes on demand recovery Asia’s toluene markets are heading into a traditional slowdown, with the winter season weighing on gasoline-blending demand, while solvent-sector buying may only see a pick-up in early 2024. OUTLOOK ’24: Asia benzene-naphtha spread to stay healthy, derivative additions outweigh production Asia benzene players expressed mixed projections for 2024, amid planned nameplate capacity additions down the benzene chain. OUTLOOK ’24: Asia ACN market sees low chance of improvement The acrylonitrile (ACN) market in Asia has endured a difficult 2023, with promises of a strong COVID-19 recovery hitherto unfulfilled. OUTLOOK '24: Asia's naphtha supply crunch to persist Asia’s naphtha market is expected to stay well supported in the short-term as political tensions, bad weather conditions and Middle Eastern refinery maintenance will limit supplies coming to this region. OUTLOOK ’24: Asia MX growth subdued, downstream expansions to support demand Asia mixed xylenes (MX) of both isomer grades will observe slowdown in capacity expansions in 2024, but new downstream paraxylene (PX) and purified terephthalic acid (PTA) start-ups are prompting cautious expectations of demand support among some regional market players. OUTLOOK '24: East and south Asia ethanolamines faces soft demand, ample supply The ethanolamines markets in east and south Asia are expected to be mired in weakness into the first quarter of 2024. The plant outages in Europe and Asia in the latter half of Q4 2023 did little to bolster the market, with demand largely in a low ebb. OUTLOOK ’24: Asia PBT to face increased competition, weak demand The Asian polybutylene terephthalate (PBT) market ended 2023 on a softer note with concerns that the weak demand would continue into Q1 2024. OUTLOOK ’24: China BD market supply still tight, downstream expansion provides support In 2024, China’s butadiene (BD) capacity expansion will slow, but downstream ABS and others may continue to launch new facilities, and so downstream sectors will still have room to accept overseas BD supply. OUTLOOK '24: China BDO faces high-speed capacity expansion, low utilization China’s 1,4-butanediol (BDO) capacities will rise at a quicker pace in 2024, after kicking off a new expansion cycle since 2023, but plant utilization rates may stay low amid a potential supply surplus. OUTLOOK ’24: Asia ABS, SAN run rates to be reduced, capacity additions outweigh demand Asia acrylonitrile-butadiene-styrene (ABS) and styrene acrylonitrile (SAN) players largely expect production to be mitigated to factor in recent and upcoming capacity additions, with some sellers readjusting their focus to emerging Asian markets and beyond. OUTLOOK '24: East, south Asia LAB in seasonal lull while China soldiers on The linear alkylbenzene (LAB) markets in east and south Asia have entered a slower year-end season, with demand likely to stay tepid in the near term. OUTLOOK ’24: Asia BDO faces greater oversupply, lacklustre downstream performance The Asia 1,4-butanediol (BDO) market had already faced the first round of new capacities in China, with even more to follow. OUTLOOK ’24: Asia synthetic rubber braces for soft demand; hopes pinned on China Soft downstream demand, underscored by lingering macroeconomic headwinds, is expected to weigh on Asian’s spot import market for various synthetic rubber grades – from styrene-butadiene-rubber (SBR), polybutadiene rubber (PBR) to acrylonitrile-butadiene-rubber (NBR). OUTLOOK ’24: Mideast, S Asia PS to remain dull, potential restocking ahead of Lunar New Year Polystyrene (PS) markets in both South Asia and the Middle East struggled to show any momentum in the last quarter of 2023, as evidenced by the poor demand and sales. OUTLOOK ’24: Asia PS market to face competition, macro uncertainties After struggling with feedstock styrene monomer (SM) market uncertainties and shallow margins for a year, Asia’s polystyrene (PS) market players appear to have a mostly conservative market outlook for 2024. OUTLOOK ’24: Asia caustic soda demand likely mixed; producers grapple with costs Asia's caustic soda spot market is likely to see uneven demand, while producers are likely to struggle with squeezed margins amid higher operating costs. OUTLOOK '24: Asia nylon markets to meet tougher challenges in 2024 The nylon markets in Asia saw obstacles in 2023 which have mostly yet to be overcome. Macroeconomic factors and increased frugality among consumers of end-use products, such as textiles and clothing, have driven down demand, especially with ramped-up recycling and upcycling efforts. OUTLOOK ‘24: China n-butanol to see ample supply on capacity expansions Supply will likely remain sufficient in the first half of 2024 due to few turnarounds for n-butanol (NBA) despite the switch to 2-ethylhexanol (2-EH) production at some oxo-alcohols plants. OUTLOOK ’24: Asia styrene players eye changing trade landscape, recovery may stay slow Asia's styrene market players faced a challenging year in 2023 amid slow demand and shallow production margins. OUTLOOK ’24: China SM capacity growth to slow, competition to intensify China’s styrene monomer (SM) capacity growth is expected to slow down significantly in 2024, after rapid expansions in 2020-2023, with only Chambroad Petrochemical’s 600,000 tonne/year and Luoyang Petrochemical’s 120,000 tonne/year plants likely to come on stream. Despite the slowing capacity additions, competition will intensify as the industry is in the process of seeking a dynamic balance. OUTLOOK ’24: China acetic acid may face pressure from capacity expansion China’s acetic acid market may face pressure from imbalanced fundamentals in 2024. A number of new units are scheduled to start up while there are many uncertainties on the demand side. OUTLOOK '24: Asia fatty acids demand tepid in Q1, with pick up from Q2 Asia fatty acids demand for the first quarter of 2024 is likely to be tepid but is expected to strengthen from the second quarter onwards if there is an ease in the macro-economic headwinds which have battered the global economy. OUTLOOK '24: Asia fatty alcohols subdued in Q1 but CPKO rally may bolster demand Asia fatty alcohols market is likely to be subdued in the first quarter of 2024, but a rally in the feedstock crude palm kernel oil (CPKO) price will bolster demand. OUTLOOK ‘24: Asia EVA supply overhang clouds Summer Olympics optimism Asia’s ethylene vinyl acetate (EVA) market outlook in the near-term faces supply length and slow demand pressures, as the downstream footwear and photovoltaic (PV) industries focus on destocking activities hence clouding optimism from the 2024 Summer Olympics multiplier effect. OUTLOOK ‘24: TiO2 trend could mirror 2023, but potential ADD may be a game changer Spot titanium dioxide (TiO2) prices could continue to trend similarly to 2023 while Chinese makers are bracing for potential antidumping duties (ADDs) on Chinese products to Europe. OUTLOOK’24: Asia’s phenol market faces rationalisation as China’s capacity growth threatens Phenol and acetone market rationalisation in Asia is underway as output cuts in 2023 failed to safeguard margins amid capacity growth in China. Leading producers will push for a benzene cost-based approach in the 2024 contract pricing. OUTLOOK ’24: Asia’s PO markets likely to remain subdued, minimal downstream support Asia’s propylene oxide (PO) markets will likely continue grappling with weak demand in 2024, with supply mixed across the region, and the downstream sectors unlikely to provide significant support to demand. OUTLOOK ’24: Asia polyols demand outlooks mixed across region Asia’s import markets for slabstock polyols were in the doldrums for most of 2023, and the demand outlooks for 2024 are mixed across the region. OUTLOOK ’24: China phenol to wrestle between supply surge and demand China’s phenol capacity expansions in 2024 may be slower than in 2023, but the market will continue to feel supply-side pressure as a number of new plants coming on stream around the end of 2023 are likely to release output in 2024. Whether downstream producers could digest the supply additions and whether exports will increase in 2024 are a key concern for the market. OUTLOOK '24: Asia chemical freight rates may remain elevated Charterers have advanced discussions for chemical shipments in Asia amid expectations that tanker supply may remain tight into the new year. OUTLOOK ‘24: China BPA imports to drop further on new start-ups The expected surge in 2024 domestic supply following start-ups of more capacities in end-2023 will further erode demand for overseas cargoes. OUTLOOK ’24: Mideast polyether polyols market to see supply outstrip demand in 2024 Middle East polyols markets are expected are facing excess supply and tepid demand next year on additional capacities for both polyols and their feedstock, propylene oxide (PO). OUTLOOK ’24: Asia’s acetone market braced for higher term prices on reduced output outside China Asia’s acetone market players were braced for higher 2024 term prices as global supply shortages in 2023 – due to planned and unplanned output cuts and outages at phenol/acetone plants – supported pricing discussions. OUTLOOK '24: Asian BPA sellers brace for tough times as China cuts imports Asian bisphenol A (BPA) makers will continue to have a challenging time in most of the first quarter as China is likely to keep its import volume low due to growing domestic supplies and weak downstream demand. OUTLOOK ‘24: Asia Group I base oils supply to stay tight, Group II supply to rise Asia’s Group I base oils supply is expected to remain tight in Q1 2024 due to a refinery turnaround and production cuts in southeast Asia. OUTLOOK '24: Asia caprolactam market anticipates China’s shift from net importer A shift in caprolactam (capro) supply and dynamics throughout 2023, especially in China, has led to expectations that China, once a net importer, could be self-sufficient as soon as 2024 or 2025. OUTLOOK '24: Asia MA mired in demand weakness while supply expands Asia’s maleic anhydride (MA) markets are likely to remain subdued in the first quarter of 2024 amid weak demand and ample supply. OUTLOOK ‘24: Asia oxo-alcohols stalemate to persist amid tight import supply The stalemate in Asia's oxo-alcohol import markets is expected to continue into the first half of the first quarter. OUTLOOK '24: Asia methanol prospects marred by production expansions, stagnant demand Methanol market participants in Asia are maintaining a bearish outlook, weighed by the rise in production capacity expected in 2024 and following a slower-than-expected recovery from last year. OUTLOOK '24: Asia PA near-term demand to remain muted, supply-driven upside capped Asia’s phthalic anhydride (PA) markets are likely to stay subdued in H1 2024, with tepid demand outweighing cost-push factors. OUTLOOK '24: Asia MTBE supply glut persists, demand may improve Trading of methyl tertiary butyl ether (MTBE) in Asia has been active in Asia on ample supply in 2023, while the extent of oversupply could be reduced with potentially improving demand in 2024. OUTLOOK '24: China MTBE capacities to continue growing; exports to SE Asia persist China's methyl tertiary butyl ether (MTBE) capacity expansion will continue into 2024, exacerbating the domestic supply pressure amid expectations of limited local demand as gasoline consumption may have peaked, but southeast Asia may still require some incremental volumes. OUTLOOK '24: Asia’s PVC market enters 2024 in a sombre mood If Asia’s polyvinyl chloride (PVC) spot market performance in 2023 is anything to go by, players are bracing themselves for similar challenges in 2024. OUTLOOK ’24: Mideast, south Asia PVC Q1 uptake expected to be healthy, oversupply remains a challenge Polyvinyl chloride (PVC) markets in both South Asia and the Middle East saw a lot of volatility in 2023, affected by events like the safeguard investigation in India, seasonal factors and economic challenges faced by major economies, like China. OUTLOOK '24: China methanol supply-demand to grow at slower pace; imports to stay high China’s methanol output and demand are expected to grow further in 2024, albeit at a slower pace, while the import volumes may remain at high levels. OUTLOOK '24: Asia plasticizers demand sluggish, 2-EH to remain key market driver The Asian plasticizers market is expected to remain sluggish in H1 2024, as a seasonal lull in demand coincides with weak end-user consumption due to the bearish construction sector in China. OUTLOOK ’24: New capacities to exert further pressure on China PO market China's domestic propylene oxide (PO) market is expected to suffer further supply pressure because of new capacity start-ups in 2024. OUTLOOK ’24: China 2-EH supply to remain tight in H1 2024 China’s 2-ethylhexanol (2-EH) market is likely to experience a tight balance in the first half of 2024 due to limited new capacities. OUTLOOK '24: Easing Asia acetic acid supply may outstrip demand upside in Q1 Asia acetic acid supplies will lengthen during the first half of 2024, offsetting upside from regional plant outage and increased downstream plant utilisation in two key markets. OUTLOOK ’24: Asia glycerine demand to stay tepid in Q1 on bearish sentiment Asia’s glycerine demand is expected to remain soft in the first quarter of 2024 given continued weakness in the global economy. OUTLOOK '24: Asia PET supply expected to outstrip demand on new capacities Asia's polyethylene terephthalate (PET) supply is set to outstrip demand in 2024 on the back of new capacities coming on stream. OUTLOOK '24: Asian PTA capacity expansion continues, downstream demand growth to lag The purified terephthalic acid (PTA) markets in Asia will undergo another challenging year ahead, amid continual expansions of new capacities in China. OUTLOOK ’24 INSIGHT: Asia MEG market could improve in 2024 as capacity build-up eases The Asian mono ethylene glycol (MEG) market is expected to hit the pause button in 2024 after aggressively expanding capacity over the past few years. The market is expected to brace for some improvement in prices to help ease poor or even negative margins. OUTLOOK '24: GCC PET supply to recover, demand to rise in 2024 Supply of polyethylene terephthalate (PET) spot cargoes from the Gulf Cooperation Council (GCC) is expected to be healthy going into 2024, while domestic demand is expected to be flat. Demand from key export markets, however, is expected to see some slight increase going into 2024. OUTLOOK ‘24: China’s MEG supply-demand to improve on slower capacity growth The capacity boom since 2020, driven by the start-ups of multiple large refining and chemical projects, will ease in 2024, which will give a relief to the pressurized monoethylene glycol (MEG) market and improve the supply-demand fundamentals. OUTLOOK ’24: China slated to transform into net exporter for MIBK Asia’s methyl isobutyl ketone (MIBK) import demand looks set to contract in 2024 as China dramatically increases its production capacity from as early as the first half of next year. OUTLOOK ’24: Reduced supply may support China’s DEG market As a by-product, the output of diethylene glycol (DEG) has been significantly squeezed in recent years by the low operating rates at monoethylene glycol (MEG) units. MEG producers in various regions based on different routes are facing competition amid persistently thin margins. OUTLOOK '24: Asia soap noodles to remain soft in Q1 on macro headwinds Asia’s soap noodles market is expected to remain soft in the first quarter of 2024 as regional economies grapple with inflationary pressures and global recession fears amid a global economic downturn. OUTLOOK '24: Asia FAE tepid in Q1 on weak demand and bearish sentiment Asia’s fatty alcohol ethoxylates (FAE) market is expected to remain tepid in the first quarter of 2024 amid a slowdown in activities during the Lunar New Year holidays. OUTLOOK ’24: Solar glass demand, supply disruption fuel China’s soda ash market China’s soda ash market may continue to find support in the first quarter of 2024 amid domestic output disruptions on the back of capacity additions in the downstream solar glass sector in 2023 while stock buffering interest among buyers in southeast Asia may stimulate spot market liquidity. OUTLOOK ‘24: Costs to drive China PTA market amid capacity mismatch with upstream PX The domestic purified terephthalic acid (PTA) market is likely to be cost-driven in 2024, as its capacity expansion – albeit slowing down – may lead to a mismatch compared with upstream paraxylene (PX), which may not see any capacity additions next year. OUTLOOK '24: Tight VAM supplies in Asia may persist into Q1 Asia’s vinyl acetate monomer (VAM) prices for prompt imports have risen on signs that bulk cargo availability may remain tight into the first quarter, contrary to previous expectations. OUTLOOK ‘24: China VAM supply may tighten in Q1 despite new capacities China’s domestic vinyl acetate monomer (VAM) production capacity is poised for a consistent upswing in 2024, with the continuous expansion of downstream China's ethylene vinyl acetate (EVA) production capacity in recent years.

16-Jan-2024

HOUSTON (ICIS)–The US is on track to use its main chemical safety program to impose restrictions or even bans on various uses of vinyl chloride monomer (VCM) and acrylonitrile (ACN) as well as aniline, the main feedstock used to make the polyurethane chemical methylene diphenyl diisocyanate (MDI). The Environmental Protection Agency (EPA) oversees the main chemical safety program of the US, known as the Toxic Substances Control Act (TSCA) The guidelines adopted by the EPA under the current administration indicate that it will impose restrictions once it completes the multi-year TSCA process The EPA indicated that it could target an additional 5 chemicals/year, including benzene, butadiene (BD), styrene and two xylene isomers THE ROAD TO RESTRICTIONSBack in mid-December, the EPA announced that it had started the 12-month prioritization process to determine whether VCM, ACN, aniline and two other chemicals should be designated as high priority substances. Those two other chemicals are acetaldehyde and 4,4’-methylene bis(2-chloroaniline), a chemical known as MBOCA or MOCA. The EPA had already said that it "expects these chemicals to be designated as high priority for risk evaluation during the prioritization process". If the EPA designates those chemicals as high priority substances, then it will start the risk evaluation phase, in which the regulator will determine whether the chemicals pose unreasonable risks. This process is supposed to last three years with a six-month extension, although it is unclear whether the EPA will meet this deadline. Under President Joe Biden, the EPA has taken a whole chemical approach to determine whether a substance poses an unreasonable risk. Under such an approach, the EPA is expected to find that VCM, ACN, aniline and the other two chemicals pose unreasonable risks, said Lynn Bergeson, managing partner at Bergeson & Campbell, a law firm that specializes in TSCA. If the EPA makes such a finding, then it will proceed with the risk management phase, in which it will propose ways to manage the unreasonable risks. Those can include restrictions or bans on certain uses. EPA TO CONSIDER PLASTIC WASTE, ENVIRONMENTAL JUSTICE DURING TSCA PROCESSIn its mid-December announcement, the EPA indicated that it is taking an expansive interpretation of TSCA by considering environmental justice and plastic waste. It said the prioritization process advances Biden's "goal of environmental justice for all" The announcement took the unusual step of quoting the president of Beyond Plastics, an advocacy group that greeted the regulator's decision as the first step towards banning VCM Such an expansive approach increases the likelihood that the EPA will propose restrictions or bans during the risk management phase. The concern is that the administration could harness the nation's chemical safety regulations as a tool to restrict plastic production in the name of environmental justice and waste reduction. All five of the chemicals selected for the prioritization process are used to make polymers. TSCA SETS SIGHTS ON OTHER MAJOR CHEMICALSBiden's EPA plans to start prioritization on five chemicals each year, which could put more commodity chemicals on track for potential restrictions or bans. The EPA did not say which chemicals could be next, but the 2014 TSCA Work Plan provides a list of candidates. The EPA selected VCM, ACN and aniline from that same work plan. Other notable chemicals in the work plan include the following: Benzene Bisphenol A (BPA) Butadiene (BD) Ethylene dichloride (EDC) Ethylbenzene (EB) Formaldehyde Orthoxylene (OX) Paraxylene (PX) Phthalic anhydride (PA) Styrene HOW RESTRICTIONS COULD WORKA recent post by Bergeson & Campbell explains how the restrictions could work. The EPA could propose workplace chemical protection programs (WCPP) that include existing chemical exposure limits (ECEL). These exposure limits could be several orders of magnitude stricter than current workplace regulations. RAMIFICATIONS FOR CHEMICAL COMPANIESFor the chemical industry, those stricter limits could require costly plant upgrades, procedures and other measures. Those additional costs would trickle down to the final prices for VCM, ACN and aniline. Companies would pass through those higher prices directly to their derivatives. For aniline, that would be MDI, the main isocyanate used to make polyurethane. For ACN, downstream products would include acrylonitrile butadiene styrene (ABS), acrylic fiber and polyacrylonitrile (PAN), the feedstock used to make carbon fiber. For VCM, higher costs would pass through to polyvinyl chloride (PVC). POLICY INSTABILITYThe EPA's expansive interpretation of TSCA could lead to unstable policies, regardless of the merits of pursuing environmental justice and or reducing plastic waste. If the EPA is sued over any TSCA restrictions, the court may find that the regulator exceeded the scope of the law. It could then strike down the restrictions. Something similar happened in the last decade, when the court found that the EPA exceeded the scope of the Clean Air Act when it used an ozone statute as the basis to phase down the use of refrigerants and polyurethane blowing agents that contributed to climate change. The court threw out the program, and US efforts to phase down the materials were delayed until Congress passed new legislation. In the meantime, states passed their own phasedown laws, leading to a patchwork of regulations. NEW CHEM POLICIES EVERY FOUR YEARSBergeson, the managing partner of Bergeson & Campbell, expressed larger concerns about volatile policy-making at the EPA. When Donald Trump succeeded Barack Obama as president in 2016, the EPA pursued a different approach to chemical safety. In 2021, the EPA changed tack under President Joe Biden. This year, the US presidency could change again with Trump potentially returning as president and causing another about-face in chemical safety policy making. Such volatility makes it difficult for companies to make plans and anticipate future policies and regulations, she said. When Congress passed TSCA reforms in 2016 under the Frank R Lautenberg Chemical Safety for the 21st Century Act, two of its intentions were to make the country's chemical safety program more predictable and to diminish the number of state chemical initiatives that also posed commercial challenges. Seven years later, chemical companies are facing the prospects of sharp swings in the US regulatory climate and unrelenting state chemical initiatives. Insight by Al Greenwood Thumbnail shows test tubes, which are often used in testing chemicals in toxicological studies. Image by Shutterstock.

11-Jan-2024

SINGAPORE (ICIS)–Japan’s Mitsui Chemicals is considering downsizing its domestic phenols business, as well as optimize domestic cracker and polyolefin operations, as part of its business restructuring, to transition into a specialty chemicals producer by the end of the decade. The company is "mulling domestic downsizing" of its phenol/acetone plants, citing a decision by Japanese producer Idemitsu Kosan to withdraw from the bisphenol A (BPA) business by October 2024 due to oversupply. Phenol and acetone are feedstocks for the production of BPA. Mitsui Chemicals operates a plant in Chiba which can produce 114,000 tonnes/year of acetone and 190,000 tonnes/year of phenol; and a unit in Sakai with a 120,000 tonne/year acetone and 200,000 tonne/year phenol capacities, according to the ICIS Supply & Demand Database. The company is stepping up efforts towards becoming a global specialty chemical firm by 2030, it said in a presentation to investors on 28 November. " As well as stepping up the pace of business portfolio transformation, we will further aim to further reduce volatility by accelerating the second phase of [the] Basic & Green Materials business restructuring," the company said in the presentation slides. "This will include an optimised production setup at our crackers, among other efforts." Mitsui Chemicals’ two crackers have a combined ethylene capacity of around 1.1m tonnes/year. Mitsui Chemicals on 21 November said that intends to close its polyethylene terephthalate (PET) plant within the Iwakuni-Ohtake Works in October 2024 after it determined that "that it is no longer feasible to secure a profit from domestic PET resin production". At the same site, the company’s 400,000 tonne/year purified terephthalic acid (PTA) plant was shut permanently this year, as it had announced in March 2022. For its polyolefins business, Mitsui Chemicals said that it will be mulling optimisation options via "multi-company collaborations" following the move by its subsidiary Prime Polymers to shut a 110,000 tonne/year polypropylene (PP) line at its Chiba site in March this year. Prime Polymers' new 200,000 tonne/year PP plant – which is part of Mitsui Chemicals' plan to restructure its existing production system under and "scrap-and-build-approach" – is expected to start up in 2024. CARBON-NEUTRAL CRACKERS Mitsui Chemicals is planning to come up with an "ideal state" plan for its crackers by the end of its 2025 fiscal year (year to March 2026), which could include capacity optimisation in line with demand fundamentals. The company operates naphtha-based crackers in Chiba and Sakai, Osaka. The Sakai cracker can produce 500,000 tonnes/year of ethylene (C2), while its Chiba unit has 612,000 tonnes/year of C2 capacity. The company, along with Maruzen Petrochemical, Toyo Engineering and Sojitz Machinery launched in 2022 a pilot project aimed at switching feedstock at crackers from conventional methane-based fuel to one in which ammonia is the principal component. In July 2023, Mitsui Chemical had announced its intention to become the first company in Japan to start producing and marketing chemical products and plastics derived from chemical recycling based on the mass balance approach. The mass balance in petrochemicals involves calculating the input, output, and accumulation of raw materials and products in a petrochemical process to ensure efficiency and to minimize waste. Pyrolysis oil made from plastic waste will be supplied by Japan's CFP Corp and will be used by Mitsui Chemicals as feedstock for the cracker at the Osaka Works in January to March 2025. In the fiscal first half to September 2023, Mitsui Chemicals’ net profit declined by 53.4% year on year to Japanese yen (Y) 20.7bn ($141m), with sales down by 13.4% at Y823.7bn. Focus article by Nurluqman Suratman ($1 = Y147.1) Thumbnail image: At a container port in Tokyo, Japan, 19 October 2023. (By KIMIMASA MAYAMA/EPA-EFE/Shutterstock)

30-Nov-2023

LONDON (ICIS)–The latest draft of the Packaging and Packaging Waste Regulation (PPWR) – which passed its plenary vote in the EU Parliament on Wednesday 22 November – brings further sweeping changes to the proposed legislation, some of which are likely to prove controversial. The wide-ranging changes from the initial draft, many of which are in line with the European Parliament’s Committee on Environment (ENVI)’s proposed amendments from October, include: A watering down of minimum recycled content and collection targets at member state and company level The acceptance of bio-based material as potentially counting towards 50% recycled content targets Exemptions for linings in recycled content targets and recyclability assessments, which could encourage the use of difficult-to-recycle paper and cardboard food-contact packaging Exemptions from recyclability assessments for wood and wax packaging Bans on the intentional addition of bisphenol A (BPA) and per-and-polyfluoroalkyl substances (PFAs) in packaging Labelling obligations and data provision obligations – including making information publicly available An extension of Extended Producer Responsibility obligations, which would include member states using fees collected to support collection infrastructure and make producers/distributors responsible for covering recycling fees A push towards ‘regulated value chains’ Further amendments to the definition of recycling, tying the PPWR to directive 2008/98/EC, as well as the legislation’s own definition of recycling Amendments to mandated Deposit Return Scheme (DRS) proposals Changes to reuse and refill targets, including adding requirements that it must be reusable ‘multiple times’ to the reuse definition Including online retailers into many of the PPWR obligations The setting up of a ‘Packaging Forum’ made up of value chain stakeholders to vet future legislation and targets The legislation still needs to go through the trilogue stage, where recommendations from the EU Council and other stakeholders will be debated, before it is adopted, and the final version could look quite different from the version voted on by the Plenary. At a minimum it is likely to provoke heated discussion and lobbying from all sides of the various packaging value chains. RECYCLED CONTENT TARGETSWhat will most likely prove one of the most hotly-debated changes under the latest version of the PPWR is the incorporation of ENVI’s proposed amendment on the acceptance of bio-based plastics as counting towards up to 50% of mandated recycled content targets in packaging. This was something that was heavily criticised by many in the mechanical recycling and packaging chains, when it was adopted by ENVI under their proposed changes. This is not because the industry doesn’t support the development of the bio-based plastic chain, but because the acceptance of bio-based as recycled content could potentially harm investment in and development of the mechanical recycling chain. Many players have stated that there should potentially be bio-based content targets, but that these should be separate from the recycled content targets. Coupled with this, many do not view bio-based as a form of recycling – although it reuses biological waste – but as a form of virgin production. On those targets the minimum recycled content target for contact-sensitive plastic packaging has been reduced to 7.5%, from 10% by 2030, and food-contact material appears to have been granted an exemption from having to meet those targets. It also adds a 25% recycled content target for non-polyethylene terephthalate (PET) contact sensitive packaging. It also reduces member state packaging collection targets down from 90% in the previous draft, to 85%. Taken together, these changes amount to a significant dilution of the previous targets. Nevertheless, they remain ambitious, and would require a significant scale-up in packaging suitable recycled content production and collection, particularly in markets such as recycled polyolefins, given current structural shortages in Europe. Likely to be more warmly received by the industry, the latest version shifts the calculation of recycled content from a per packaging basis, to an average per format, per manufacturing plant, and per year, which would make the regulation more practical to enforce. The new version also deletes the clause in the draft version that would have allowed the Commission to amend the recycled content targets due to the lack of availability or “excessive prices” of specific recycled plastics. It would require the Commission to develop a methodology by 31 December 2025 to certify recycled content placed on the market. LINING EXEMPTIONS AND PAPER AND CARDBOARD PACKAGINGThe other area of the new draft likely to cause controversy in the market is the addition of exemptions for linings, coatings, varnishes, paints, inks adhesives, lacquers, and closures from definitions of ‘composite packaging.’ This would appear to remove them from key ‘recyclability at scale’ assessments, and from recycled content targets. Of these, it is the lining exemptions likely to cause the fiercest debate. This is because food-contact cardboard and paper packaging – outside of corrugated cardboard used in fruit and vegetable packing – typically includes a plastic barrier (now apparently exempted under the lining exemption) which makes it a multi-layer and typically difficult to recycle. Not including a barrier would expose the paper or cardboard to food-contamination and moisture, which would make the material non-recyclable. Coupled with this, non-plastic food packaging alternatives typically have higher energy usage, carbon dioxide (CO2) emissions, and higher weight (which results in higher emissions and fuel consumption when transported). While cardboard and paper packaging does have high recycling rates of 81.5% in the EU27 in 2020, according to Eurostat data (the latest year for which data is available, although 2021 rates have been estimated by Eurostat at 82.5%), much food-contact packaging falls in to the 18.5% not currently recycled. Coupled with this, recycling rates for cardboard and paper packaging have been falling from a peak of 85.4% in 2016 and 2017. Correlation is not causation, but this coincides with increased adoption of paper and cardboard in food-contact packaging. When this amendment was first proposed by ENVI a number of players in the industry expressed concern both that this would leave the impression in the consumer’s mind that paper and cardboard food-contact packaging is more recyclable and sustainable than it actually is, and that it would hasten a shift to alternative materials and away from plastic. Tempering this slightly, barriers are now included in the annex under the list of indicative parameters to be considered when establishing design criteria for recycling, along with: Additives Labels/sleeves Closure systems and small parts Adhesives Inks/printings Colours Material composition Coatings Products residues/ease of emptying Ease of dismantling Wood and wax packaging have been exempted from recyclability criteria. RECYCLING DEFINITIONS AND CHEMICAL RECYCLINGThe new version incorporates ENVI’s proposed rewording of the regulations definition of recycling, which appears to re-add the ambiguity for pyrolysis-based chemical recycling on whether pyrolysis oil would count towards the targets that exists in current recycling definitions under EU law. This is an ambiguity the original draft had seemingly sought to remove.  It also adds in requirements that material meets the definition of recycling under 2008/98/EC, which has itself created ambiguity on the legal status of pyrolysis-based chemical recycling. By tying chemical recyclers to both definitions it could potentially make it more difficult for pyrolysis oil – the dominant output of chemical recycling in Europe – to be considered as recycled material, depending on how definitions interpreted and enforced. REGULATED VALUE CHAINSThe new draft also adopt ENVI's proposed wording in the recital portion of the regulation around developing ‘regulated value chains’ although there are no details around what this would mean in practice. It would also require member states to set up a system “to provide safe and equitable access to recycled materials for use in applications where the distinct quality of the recycled material is preserved or recovered in such a way that it can be recycled further and used in the same way and for a similar application, with minimal loss of quantity, quality or function,” by January 2029. Again, there is no detail or clarity on what ‘equitable access’ would mean in this context, but it has the potential to fundamentally reshape the value chain and existing pricing and contract mechanisms. EXTENDED PRODUCER RESPONSIBILITYThe changes stipulate that funds raised by Extended Producer Responsibility fees set out in the draft are earmarked to finance the cost of collection, sorting and recycling of packaging. Lack of sufficient infrastructure has consistently been one of the key challenges to reaching scale for recycled plastics commonly mentioned by players throughout the value chain. It is likely to be welcomed. Less likely to be welcomed are requirements for public disclosure of information collected under its Extended Producer Responsibility (EPR) proposals, online and free of charge. The new draft would also extend EPR costs to also cover the subsequent transport and treatment of waste, in addition to waste collection and infrastructure costs that formed part of the initial draft. OTHER MEASURESThe PPWR would create a number of new labelling obligations under a harmonized system, including pictograms and minimal language, to detail recycled content and recyclability. The latest version extends many of the proposed regulations’ requirements to online platforms. It also adds obligations on member states to reduce per capita packaging waste by 10% by 2030, 15% by 2035, and 20% by 2040, compared with 2018 levels. Lastly, the latest version would see the creation of a ‘Packaging Forum’ consisting of stakeholders throughout the value chain across member states – including waste treatment industry representatives, manufacturers and packaging suppliers, distributers, retailers, importers, SMEs, environmental protection groups and consumer organisations – to be consulted on the preparation of delegated and implementing acts under the regulation. The scope of the PPWR is wide-ranging, and with the trilogue period approaching – which will seek to harmonise the view of the EU Parliament, the Council, the Commission, and the industry – discussion is likely to be intense and the final form of the regulation currently unknowable. Whatever form it takes, it is likely to have major repercussions across the packaging chain and any players connected to the market will need to familiarize themselves with the proposals and ensure their voice forms part of the debate. Insight by Mark Victory

28-Nov-2023

LONDON (ICIS)–The Europe acetone, phenol and derivative markets are slow ahead of year end and the outlook is cautious for 2024. Economic troubles, capacity increase in Asia and ongoing derivative import competition are likely to continue to weigh heavy on markets. Although there may be a few demand bright spots for BPA and epoxy into the downstream wind energy and marine sectors. Europe ICIS editors Jane Gibson (acetone and phenol), Heidi Finch (bisphenol A and epoxy resins), Mathew Jolin-Beech (methyl methacrylate) and Meeta Ramnani (polycarbonate) analyse trends in the acetone, phenol and derivatives markets. Europe BPA and epoxy markets slow, outlook for 2024 mixed, depending on end sector, Asian competition to weigh Low phenol and acetone operating rates keep acetone balanced, with no signs of phenol demand improvement European PC market imbalanced, global capacities way above consumption Europe MMA market subdued with persistent weak demand that is expected to last into 2024 Podcast editing by Meeta Ramnani

10-Nov-2023

HOUSTON (ICIS)–Trinseo could achieve industrial scale production of recycled polycarbonate (PC) using its dissolution technology in 2025, the CEO said on Monday. "Through this ongoing investment, and our ability to repurpose the idled PC production line in Stade, Germany, for this process, we expect to be able to achieve industrial scale production beginning in 2025 with a low capital expenditure," said Frank Bozich, CEO. He made his comments during an earnings conference call. The company already has started a pilot plant in Terneuzen, the Netherlands, and it is producing samples of recycled PC for its customers, Bozich said. Trinseo's dissolution process relies on solvents to recover PC from mixed waste, which can include metal, glass or other types of plastics, Bozich said. He described the process as physical versus mechanical or chemical. Because Trinseo can use waste as a feedstock, production costs at industrial scale could be lower than traditional methods of producing virgin PC, Bozich said. The PC extracted from Trinseo's dissolution process is on par with virgin PC, Bozich said. The recycled PC contains lower levels of bisphenol A (BPA), which could open up new applications that are off limits to virgin material. Trinseo's process emits up to three times less carbon dioxide (CO2) versus traditional PC production, Bozich said. The process can recover PC from consumer electronics or automotive parts, he said. Trinseo can take automotive headlamps that are low quality, off grade or at the end of their life, recycle the PC and return it to its customers so they can make a new headlamp using the material, Bozich said. Trinseo has done this with interior door panels and consumer electronics, and they have met the quality requirements of the customers. Bozich envisions establishing closed-loop partnerships with automotive, electronics and consumer goods producers. Thumbnail shows a compact disc, which is made with PC. Image by ICIS.

06-Nov-2023

LONDON (ICIS)–The European Parliament’s Committee on Environment (ENVI) has voted on initial amendments to the draft Packaging and Packaging Waste Regulation (PPWR), potentially ushering in sweeping changes. These include: Bio-based virgin plastics acceptable in recycling targets Regulated value chain Harsh penalties Requirements for separate collection systems at member state level Banning intentionally added bisphenol A (BPA) Redefining meaning of “composite packaging” Potential loopholes for recycling targets in 2030, 2040 Major investments in infrastructure required Ambiguity around chemical recycling The vote took place on 24 October, with a wider vote among EU legislators set to take place later in November, before the regulation is adopted or signed into law. Below are some of the key takeaways from the amendments and what they could mean for the industry. BIO-BASED VIRGIN PLASTICS ACCEPTABLE IN RECYCLING TARGETSOne of the most significant amendments, if the legislation is adopted in its current form, would be the acceptance of bio-based plastics as counting towards up to 50% of mandated recycled content targets in packaging, in effect significantly diluting the targets. New text published relating to Article 7 on bio-based plastics introduces “the possibility to meet up to a maximum 50% of the targets set out in Article 7(1) and (2) by using bio-based plastic feedstock”. The Commission will publish a report assessing the possibility of laying down targets for the use of bio-based plastics by 31 December 2025. REGULATED VALUE CHAINENVI appears to be asking for regulated pricing as part of the development of recycling capacities as part of a regulated value chain that would also include quality checks, quality assurance, certification and logistics. What this means for the market and the pricing of recycled materials is open for debate, but could be a big shift compared with current pricing mechanisms. HARSH PENALTIESArticle 62 empowers member states to set out rules on penalties for themselves if they fail to comply with the new regulation requirements. These include: Deprive those responsible of the economic benefits derived from their infringements, and gradually increase such fines for repeated infringements Confiscation of revenues gained by the manufacturer, producer, supplier, distributor, importer, authorised representatives, or appointed representatives for extended producer responsibility from a transaction with the relevant products concerned Temporary exclusion for a maximum of 12 months from public procurement processes and from access to public funding, including tendering procedures, grants and concessions Temporary prohibition from placing or making available on the market, or exporting relevant products, in the event of a serious infringement or of repeated infringements These penalties would come into effect 24 months after the regulation is put into force and could have significant impacts on anyone they are imposed upon. SEPARATE COLLECTION SYSTEMSBy January 2029, all member states will need to ensure there are sufficient separate collection systems for different fractions of packaging waste materials, which is likely to require a huge amount of investment. For example, this may require separate bins for polyethylene terephthalate (PET) bottles, other plastics, glass, cardboard and paper, metals, general waste, which could see a huge change for some member states compared with their current collection set-up. Coupled with this, the amendments also remove the previously proposed exemptions from separate waste collection systems where it does not conflict with the recyclability of a product. The proposed Article 43 paragraph 3 (b), which has now been deleted by ENVI, stated that: “By way of derogation from the separate waste collection obligation in paragraph 3, certain types of packaging waste may be collected together where such collection does not affect their potential to undergo recycling operations and results in output from those operations which is of comparable quality to that achieved through separate collection.” BANNING INTENTIONALLY ADDED BISPHENOL A (BPA)Food contact packaging with intentionally added BPA will be banned from being placed on the market 18 months after the date the regulation enters into force, along with intentionally added  per- and polyfluorinated alkyl substances (PFASs). This could have an impact on European demand for BPA. COMPOSITE PACKAGINGThe amendments change the definition of “composite packaging”, adding exemptions for coatings, linings, paints, inks, adhesives, and lacquers to the existing exemptions for labels, caps and closures. This is significant because paper, cardboard and aluminium can producers often use plastic linings as a barrier material, and this would appear to exempt them from recyclability requirements and could incentivise the shift to alternative materials to plastic, which in some cases may arguably have a higher overall environmental impact. LOOPHOLE FOR 2030 TARGETSAn amendment to Article 7 paragraph 1 – which sets out recycling targets for 2030 – introduces an exemption where the inclusion of recycled content “results in non-compliance with food safety requirements laid down at Union level”. This could present a loophole in hitting those targets if packaging producers or brands claim they are unable to find sufficient food-safety compliant material in the market – a particular challenge for plastics such as polyethylene (PE) and polypropylene (PP). The European Food Safety Authority (EFSA) states that, to gain a positive opinion, recycled material must originate from 95% food-contact packaging. For other polymers where end-use sources are varied and typically collected in a single input stream, it is an significant challenge and barrier to market growth. The only currently available source of post-consumer food-grade recycled polyolefins is limited to the UK recycled high-density polyethylene (R-HDPE) market, where used milk bottles create a separable and easily identifiable source of input material. In the majority of the rest of Europe, milk bottles are manufactured from PET. There is also some food-grade mechanically recycled polyolefins currently available from post-industrial secondary packaging sources from the meat and agriculture sector, but volumes remain minimal and there is a limited ability to scale up. The PPWR’s proposed introduction of separate collection may help meet this requirement. Nevertheless, the EU’s recently adopted food-contact legislation mandates the use of “suitable technologies” for recycling waste, which currently only include mechanical PET recycling and chemically uncontaminated closed-loop recycling “not collected in mixed form, and/or from consumers”, and reused in the same type of product they have originated from. INFRASTRUCTURE BUILDSeveral elements of the amendments would require a significant investment in infrastructure across member states to meet the targets. For example, Article 43, paragraph 5 has been removed, which had previously allowed for “certain types of packaging waste to be collected together” – meaning that combined collection of packaging waste is no longer allowed and separate collection for different types of waste must be put into place. For packaging waste that is not separately collected, a new addition in the form of paragraph 5a puts the emphasis on member states to ensure that packaging waste not separately collected is sorted prior to disposal to remove packaging designed for recycling. This, again, could require huge investments in infrastructure for certain countries. EXPORTSExports of packaging waste out of the EU may become more challenging as they will only be calculated for the member state they were collected in if the exporter can “prove that the shipment of waste complies with the requirements of this Regulation and that the recycling of packaging waste outside the Union took place under conditions that are broadly equivalent to those prescribed by the relevant Union legislation”. AMBIGUITY AROUND CHEMICAL RECYCLINGThe initial draft of the PPWR had appeared to clarify the legal status of pyrolysis oil – which has been left ambiguous under existing definitions of recycling – as counting towards the targets set out in the legislation. The amendments introduced by ENVI, though, roll this back. The initial draft stated: “The amount of packaging waste materials that have ceased to be waste as a result of a preparatory operation before being reprocessed may be counted as recycled provided that such materials are destined for subsequent reprocessing into products, materials or substances to be used for the original or other purposes.” The ENVI amendments change this to: “The amount of packaging waste materials that have ceased to be waste as a result of a recovery operation by which waste materials are reprocessed into products, materials or substances either for the original or other purposes may be counted as recycled.” Under both wordings, end-of-waste materials to be used as fuels are not included, and the amendments add an exclusion for other means of energy generation. However, under the amended version it is unclear whether pyrolysis oil would count – because pyrolysis oil can be used as a fuel – reintroducing the same ambiguity that exists in the wording of Directive 2008/98/EC, which forms the basis of most definitions of recycling in EU legislation. Also, unfavourably for chemical recycling, it introduces the following text signalling a thawing among EU legislators in their view of chemical recycling: “While it is important for the Commission to take into account all processing technologies when drafting the delegated acts establishing the recyclability criteria, as well as the criteria for recyclability at scale, it is essential that the Commission further assess the added value of chemical recycling for those fractions that cannot be processed by mechanical recycling technologies. “In the context of the objectives that have been set by Regulation (EU) 2021/1119, the Commission should take into account the energy consumption of new technologies, water consumption, material losses and, in the context of the revision of the Union legislative framework on environmental claims, avoid misleading environmental claims, by limiting these applications to a truly circular approach, excluding, for example, approaches to converting materials into fuel.” The legislation has not yet been introduced into law, and the November vote could see further amendments before any final version is adopted. Additional reporting by Mark Victory

26-Oct-2023