TOPIC PAGE: War in Ukraine, gas crisis

Author: Aura Sabadus

2022/09/30

Updated at 6:00 GMT on 30 September. Please scroll down to see headlines.

The war in Ukraine first caused oil price volatility, which increased as surging COVID-19 cases in China led to fresh lockdowns, hitting demand and disrupting supply chains. China is the world’s second biggest economy and largest oil importer.

Now Russia's decision to reduce flows of natural gas to Europe means the continent has to look forward to a winter of potential rationing, which could hit chemical production. Tightened supply has also sent gas prices soaring, with high costs forcing production cuts, especially in fertilizers.

India is facing a more severe shortage of fertilizers and edible oil amid wide-ranging trade disruptions as the Ukraine war rages on, with financial sanctions tightening on Russia.

Europe’s energy challenge is immense and put into stark relief by the response to Russia’s war in Ukraine. Cutting the ties that bind EU and non-EU nations to Russian gas and oil will be extremely painful this year and in years to come.

This topic page examines the impact of the Ukraine conflict on oil, gas, fertilizer and chemical markets.

Image credit Vadim Ghirda/AP/Shutterstock

Europe’s energy markets witnessed a year of record prices and extreme volatility in 2021. Russia's invasion of Ukraine has led to more difficult conditions for global markets in 2022.

GAS SUMMARY

  • Gas storage over 70% in Europe, winter demand will be 30% higher than rest of year
  • Record shipments of liquefied natural gas (LNG) to Europe so far in 2022
  • LNG plus Norwegian, Algerian, Azerbaijani pipeline imports compensate for Russian supply shortfall
  • Europe LNG processing operating at full capacity
  • Russia resumed flows through Nord Stream I pipeline at low levels, but halted again for maintenance
  • EU plan calls for voluntary 15% cut to consumption, industry may face much tougher reductions

AMMONIA SUMMARY

  • Russia supplies 20% of global seaborne ammonia market
  • Disrupted supply has pushed up fertilizer and food prices

OIL SUMMARY

  • Friendship oil pipeline flows through Ukraine
  • Russian oil feeds around a quarter of Europe demand
  • Europe seeks to end reliance on Russian crude oil
  • EU agrees ban on seaborne imports from 5 December 2022, petroleum products from 5 February 2023

CHEMICALS SUMMARY

  • High Europe gas, electricity prices force capacity closures
  • Volatile oil and feedstock prices dent chemical producer margins
  • Elevated oil, gas prices dent consumer confidence and demand
  • Prospect of recession, more cheap imports from Asia
  • CEOs plan now for winter gas rationing

Europe is heavily reliant on Russian gas and exposed to disruptions in supply,  but Russia is also an important oil exporter and a supplier of fossil fuel products, which find their way to international markets via Ukraine's ports.

Sanctions and measures against Russian exports of oil and gas have sent shockwaves across the global economy, lifting the cost of living, impacting industrial and agricultural production and potentially leading to social unrest.

How vulnerable are energy and energy-related Russian supplies to disruptions?
Europe depends for close to 40% of its annual gas consumption on Russian supplies, imported via four routes – Ukraine, Belarus-Poland as well as the Nord Stream 1 and TurkStream corridors linking Russia to Germany and Turkey via the Baltic and Black Sea, respectively.

Overall Russian pipeline supplies were limited throughout 2021, and since the beginning of this year producer Gazprom has shipped only one-third of the gas that it was expected to deliver to European consumers via Ukraine as part of a five-year transit agreement.

Russia has banned exports of gas to several EU countries, and reduced flows through the Nord Stream I pipeline. European petrochemicals players face even higher gas prices as a result. Fertilizer companies - where gas can account for 80% of costs - have been forced to curtail production. Chemicals are also now affected, especially those with high exposure to gas prices through utilities or feedstocks.

If the conflict escalates, Ukraine transit pipelines may come under attack but disruptions could be limited because the infrastructure has been built to grant flexibility, allowing the operator to reroute flows away from potentially damaged segments.

AMMONIA IMPACT
The Togliatti-Azot pipeline, the world’s longest ammonia pipeline stretching 2,471km from the Togliatti Azot plant in Russian Samara Oblast to the Ukrainian Black Sea port of Yuzhny, could be caught up in the cross-fire. Russian ammonia supplies account for around 20% of the global seaborne merchant ammonia market each month.

Around two thirds of those volumes are exported via Yuzhny, with the rest reaching European and global markets via Baltic ports. Ammonia is a prime material for fertilizers, so curtailments could potentially lead to higher food prices and shortages.

Ammonia market players are scrambling to cover positions and assess options as the Russian invasion of Ukraine saw loadings at the key export hub of Yuzhny halted with immediate effect.

Russian nitrogen fertilizer major Togliatti confirmed the suspension of the transit of ammonia to the Black Sea port via pipeline to ensure the safety of people living in the vicinity of the lengthy conduit.

OIL PIPELINES VULNERABLE
Supplies on the world’s longest oil pipeline, the Friendship (Druzhba) pipeline, could be threatened if the conflict leads to tough sanctions. The pipeline carries oil from central Russia 4,000km west to Ukraine and Belarus and runs close to the Belarus-Ukraine border. Russia exports around 5m bbl/day, of which half are exported to Europe, including via this pipeline.

Russian oil accounts for about a quarter of Europe’s consumption, with the Druzhba pipeline carrying close to 1m bbl/day. Should sanctions be imposed and exports hindered, Europe will need to secure alternative cargoes from the global market.

Europe consumed most exports of Urals, Russia’s biggest export grade, in 2021 after Saudi Arabia boosted market share in China. Almost 10m tonnes of Urals went through Rotterdam in the first half of last year, up 2m tonnes on 2020.

Germany stands most exposed because it gets 25% of its oil from Russia.

CHEMICALS IMPACT
Gas and electricity are important components in the production costs of many chemicals. Surging gas and feedstock prices in Europe have caused big hikes in contract and spot prices. Now millions of tonnes of fertilizer and chemical capacity are offline in Europe.

Europe is at a competitive disadvantage to other regions and some customers are seeking new sources of lower-priced supply, especially from Asia and the Middle East.

There are fears of a recession thanks to high inflation and Europe's chemical sector may be at a turning point similar to 2008/9 and early 2020.

The conflict in Ukraine has pushed European gas prices back up to record levels, forcing exposed chemical producers to cease production, or add further energy surcharges.

Rising oil prices since late 2021 have already put chemical margins under pressure, and volatility has continued into 2022. As oil and naphtha prices soared, margins for ethylene production based on naphtha went negative for the first time ICIS record began. The are now are swinging wildy in tandem with oil price movements.

Chemical producers are struggling to pass on increasing feedstock and energy costs in Europe. Elevated oil and gas prices also dent downstream consumer confidence and spending, with recession a possibility later in 2022 or 2023.

What contingency plans are being put in place?
US and European officials have been planning for backup LNG supplies. Exports of LNG from Algeria, Qatar, the US and even Australia have been discussed as alternatives. Although Europe imported a record 11bn cubic metres (bcm) of LNG in January alone, half of which were sourced in the US, much of future supplies would depend on price as well as supply and processing capacity.

Europe is proposing to replace 100bn cubic metres (m3) of Russian gas with alternative supplies by the end of the year.

“In this scenario, there would be huge problems unless Europe gets it act together. I estimate that even with new liquified natural gas (LNG) supplies from the US, Norway, and Qatar plus energy efficiency measures and more use of renewables, Europe would still be short," said ICIS senior energy editor, Aura Sabadus.

If the Asian premium were to increase, LNG cargoes would head in that direction, even as seasonal European winter gas demand is on average 30% higher than the rest of the year.

Supply disruptions caused by escalating tensions may lead to a price rebound, incentivising more LNG to return to Europe.

However, European import terminals are already operating at nameplate capacity.

Even if more LNG were to reach European terminals, countries in central and eastern Europe which rely on Russian flows shipped via Ukraine, would struggle to secure imported LNG.

For oil markets, in case of an attack but no international sanctions, the worst-case scenario would be for approximately 240,000 bbl/day of lost Russian exports via Ukraine.

There are other seaborne routes, including the Russian Black Sea port of Novorossiysk.

Gas rationing - impact on Europe petrochemicals, fertilizers

Embattled European fertilizer and petrochemical producers may be the first in line to cut gas consumption as political pressure is mounting to save supplies ahead of a difficult winter.

As Russia, Europe’s largest gas supplier, has been limiting exports to less than a quarter of its deliveries two years ago and may stop them altogether amid its political stand-off with the EU, Brussels has now issued guidance to reduce demand by 15% between 1 August 2022 – 31 March across member states.

Policymakers recommend voluntary reductions but say these would become mandatory in case of a supply emergency jeopardising the bloc’s security.

DEMAND REDUCTION
The EU’s largest consumers include households, accounting for 37% of total demand, electricity and heat generation covering around 30% and industrial consumption accounting for another 30%.

Record high gas prices and an ongoing gas supply crunch over the least year have already been forcing industrial consumers to limit or stop production or seek import substitution globally.

EU proposals for demand reduction released on 20 July indicate the industrial sector may be priority target for major reductions, with three sectors – glass, ceramics and chemicals – consuming half of the sector’s total.

FERTILIZERS
The fertilizer sector, one of the most gas-intensive industries, has also been one of the most affected so far as gas can account for up to 80% of production costs. Production has been cut back drastically because it is no longer economic.

At a gas price of $85.35/MMBtu, it would cost around $3,100/tonne to produce ammonia and nearly $2,300/tonne to manufacture urea. Late August  market levels are significantly below this, at just over $1,200/tonne CFR (cost & freight) NWE (northwest Europe) for ammonia.

ICIS experts focusing on the fertilizer sector estimate 50-60% of nitrogen production is currently down as producers have been forced to temporarily shut due to soaring natural gas prices.

PETROCHEMICALS
On the petrochemicals side, there are now deep production cuts for products such as methyl methacrylate (MMA) and melamine which are heavily exposed to natural gas for utilities or as a feedstock.

Producers are making detailed plans for rationing, particularly in Germany, where the chemicals and pharmaceuticals industry uses about 140 TWh per year, or about 15 percent of Germany's gas consumption.

Gas is mainly used by petrochemicals to generate energy such as electricity and steam as well as to fire furnaces for production complexes such as crackers.

Sites are able to lower operating rates significantly, but they may be forced to close if gas supplies drop so much that production becomes uneconomic or difficult from a technical perspective.

Companies with flexibility are switching from natural gas to liquefied petroleum gas (LPG) or other sources of energy.

Ukraine conflict threatens Europe oil supply, chemicals production

With Russia's invasion of Ukraine, sanctions could cut supplies of crude oil through the Druzhba pipeline, threatening oil refinery operations and chemicals production at installations in Hungary, Slovakia, Czech Republic, Poland and the former East Germany.


Russian oil supplies up to a quarter of Europe’s crude imports, with refineries in central and eastern Europe, which are attached to the Druzhba pipeline, particularly reliant on these supplies. Any interruption to these supplies could force refineries to reduce operating rates unless they can find alternative supplies.

Analysis of the ICIS Supply & Demand database shows that the countries Druzhba runs through, except for Germany, are reliant on Russian crude oil for more than half of their imports, led by Slovakia which obtained 96% of its supplies from Russia in 2021.

Chemical production downstream of refineries in these countries could be impacted by any reduction in operating rates. The ICIS data forecast that for 2022, 2.79m tonnes of ethylene (11% of total European capacity) and 2.34m tonnes of propylene (12% of total European capacity) are reliant on refineries located along the Druzhba pipeline. While some alternative sources of crude oil could be sourced, it is unlikely normal levels of operations could be maintained.

Michael Connolly, ICIS Principal Analyst Refining said: “Although many have built alternate sources, keeping full operating rates would be difficult for them as they rely on a consistent and reliable source of crude. Most refiners in Europe are aware of the risk of Russian crude and over the past 5-10 years have tried to reduce their dependence, or at least to build some capability to have an alternate supply - it doesn't mean they would be unaffected, but there should be a little bit of resilience, depending on the site.”

Connolly explained that some land-locked refineries along the Druzhba pipeline have built pipelines to the coast, allowing alternative sources of crude oil to be sourced. However, these pipelines may not have capacity to feed the whole refinery.

A spokesperson for Grupa LOTOS said: "The LOTOS refinery has dealt with suspended supplies by land before. Due to the contamination of Russian oil with chlorines, PERN, the state-owned operator of transmission and storage infrastructure, had to completely discontinue the transmission of crude oil from the eastern direction between 24 April and 9 June 2019."

He added that scheduling of oil supplies by sea helped to secure volumes sufficient to maintain an unchanged level of throughput and maximise fuel production.

UKRAINE CHEMICALS UNDER THREAT

With Russian forces present in Ukraine, chemical and fertilizer facilities may be threatened by physical damage, interrupted power and gas supplies or logistics disruption.

Kalush cracker closed

Karpatnaftohkhim's cracker at Kalush has been closed down because of the imposition of martial law in Ukraine. It has capacity (tonnes/year) of 250,000 (ethylene); 117,000 (propylene) 110,000 (LLDPE), 300,000 (PVC), 100,000 (benzene).

Black Sea export hub closed 

Ammonia market players have scrambled to cover positions and assess options as the Russian invasion of Ukraine saw loadings at the key export hub of Yuzhny halted with immediate effect.

Russian nitrogen fertilizer major Togliatti confirmed the suspension of the transit of ammonia to the Black Sea port via pipeline to ensure the safety of people living in the vicinity of the lengthy conduit.

The Samara Oblast-based giant also confirmed the shut down of four of its seven ammonia units, with the other three plants operating at reduced rates.

Russia export disruptions to shift global trade flows, future capacities threatened
Disruptions to Russia’s chemicals and polymers exports will change trade flows, particularly to Europe and Asia, as international sanctions, lack of logistics and even “self-sanctions” limit volumes.

While Russia’s capacities are relatively small on a global scale, they can still have a significant impact on regional markets if these exports are disrupted.

Key Russia exports include methanol, polyethylene (PE), polypropylene (PP), styrene and paraxylene (PX).

Russia has increased exports of high density polyethylene (HDPE) and polypropylene (PP) in particular in 2020 and 2021 as new capacity started up from SIBUR’s ZapSibNeftekhim complex in Tobolsk in 2020.

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By Pearl Bantillo 06-Sep-22 17:55 SINGAPORE (ICIS)--Saudi Arabia looks set to stand among the strongest-growing economies in the world in 2022, reaping strong benefits from elevated energy prices - an unwelcome offshoot of the Russia-Ukraine war.

European farmers ditch nitrate fertilizers as prices soar
By Manuja Pandey 06-Sep-22 17:27 LONDON (ICIS)--The price of nitrate fertilizers has soared on the back of reduced supply after a fresh round of production outages was announced by European chemical and fertilizer producers.

LNG charter rates soar in the Pacific basin
By Roman Kazmin 06-Sep-22 16:20 SINGAPORE (ICIS)--The charter rates in the Pacific basin have seen a drastic hike on the back of extreme shortage of tonnage, Singapore-based shipbrokers said.

INSIGHT: Lengthy supply, weak demand reflect extremely difficult September in Europe
By Nigel Davis 05-Sep-22 23:41 LONDON (ICIS)--Market players in Europe usually expect to return from summer breaks with something of a spring in their step. The quietest days of August give way to a busier September and often a relatively strong fourth quarter.

OPEC+ drop production levels for October
By Eloise Radley 05-Sep-22 23:23 LONDON (ICIS)--OPEC+ members met on Monday and agreed to cut production quotas by 0.1m bbl/day in October.

UK power exports fall during August, net flows to France set to persist
By Jack Grant 05-Sep-22 21:45 LONDON (ICIS)--Discounts on UK baseload power prompt products compared with equivalent contracts on European markets suggests the UK will maintain its net export position to Europe through delivery in September.

Global weekly spot IPEX down on declines in NW Europe, US Gulf
By Yashas Mudumbai 05-Sep-22 17:00 LONDON (ICIS)--The weekly ICIS Petrochemical Index (IPEX) dropped by 1% as declines in northwest Europe and the US Gulf offset the slight uptick seen in northeast Asia.

Singapore industries face demand headwinds; Aug PMI slips to 50
By Nurluqman Suratman 05-Sep-22 13:14 SINGAPORE (ICIS)--Singapore's manufacturing sector is expected to face further demand headwinds following a marginal drop in its key purchasing managers' index (PMI) in August as new export orders slow down.

Oil rises $1/bbl on possible OPEC supply cuts; China lockdowns cap gains
By Nurluqman Suratman 05-Sep-22 11:19 SINGAPORE (ICIS)--Oil prices rose by more than $1/bbl on Monday morning as investors fret over a possible production cut by OPEC and its allies later in the day to support the market.

SE Asia palm biodiesel market stays afloat in strong demand
By Keven Zhang  02-Sep-22 10:29 SINGAPORE (ICIS)--Southeast Asian palm methyl ester (PME) biodiesel was supported by buying activities from EU, betting against the consensus of a weakening demand as winter approached.

NE Asia C2 surges on limited Sept supply; outlook for Oct mixed
By Yeow Pei Lin 02-Sep-22 11:16 SINGAPORE (ICIS)--Northeast Asia's spot import prices for September ethylene (C2) rose at an accelerated pace on limited supply but the near-term outlook was clouded by the ailing downstream sectors.

Europe chems stocks dip on growing economic fears
By Tom Brown 02-Sep-22 00:21 LONDON (ICIS)--European chemicals company stocks slumped on Thursday in line with wider markets as fresh negative manufacturing sector data drove increasingly bearish economic growth expectations.

INSIGHT: Global chemicals must ‘prepare for pain’ as central banks press ahead to quash inflation
By Joseph Chang 01-Sep-22 23:45 NEW YORK (ICIS)--‘Pain and sacrifice’ – those are the words coming from the head of the world’s largest central bank – the US Federal Reserve – and the European Central Bank (ECB) on what looms on the horizon. Stamping out inflation is job number one, and they will do whatever it takes, even if it means recession and higher unemployment.

INSIGHT: New Ecovyst CEO eyes growth in petroleum and renewable energy
By Al Greenwood 01-Sep-22 23:35 HOUSTON (ICIS)--Ecovyst's new CEO expects demand to remain resilient for its sulphuric acid and catalysts, which are used to make petroleum based-fuels and polyethylene (PE) as well as renewable fuels and mining metals needed to make lithium-ion batteries and copper wiring.

Gas uncertainty could cause German power spot prices to rise in Q4 delivery
By Karishma Sadanandan 01-Sep-22 23:18 LONDON (ICIS)--German Q4 spot prices are likely to rise above the current forward contract, should cold spells, low winds, and rising gas prices combine to support prices in delivery.

European LNG sendout to remain elevated early September
By Christopher Rene 01-Sep-22 23:10 LONDON (ICIS)--Above-average European LNG sendout will persist in the first half of September, continuing the trend observed throughout 2022 amid ongoing supply tightness and elevated regional hub prices.

India economy posts 13.5% fiscal Q1 growth; outlook dims
By Pearl Bantillo 01-Sep-22 17:21 SINGAPORE (ICIS)--India posted a 13.5% annualized GDP growth in April-June 2022, the first quarter of its current fiscal year, marking the strongest pace of increase recorded in a year on a combination of low base effects and strong growth in private consumption.

NE Asia August factory activities weaken amid slowing global economy
By Nurluqman Suratman 01-Sep-22 13:07 SINGAPORE (ICIS)--Factory activities across northeast Asia weakened in August on poor overseas demand amid slowing global economic growth.

US PE offers in China stoke fears of extended oversupply in SE Asia
By Izham Ahmad 01-Sep-22 09:43 SINGAPORE (ICIS)--The appearance of offers for US polyethylene imports in China earlier in August has driven fears of worsening oversupply conditions in southeast Asia amid an ongoing slump in downstream demand.

Demand returns to European refinery solvents markets but costs a concern
By Jane Gibson 01-Sep-22 01:33 LONDON (ICIS)--European refinery solvents markets pricing is likely to remain volatile in September as feedstocks and energy prices impact price targets amid some regional tightness and cautious September demand.

EU considering “emergency intervention” into power markets: Proposals and likely outcomes
By Matthew Jones 31-Aug-22 19:38 European Commission President Ursula von der Leyen stated this week that the electricity market requires “emergency intervention” in order to reduce the skyrocketing prices of power across the bloc.

China’s PVC exports could be capped but rising deep-sea supply may affect Asia
By Jonathan Chou 31-Aug-22 16:59 SINGAPORE (ICIS)--Despite exports from China having fallen in recent weeks, producers in Asia are likely to continue seeing competition in the form of deep-sea cargo at competitive prices.

China industries contract in August amid power cuts, COVID-19 curbs
By Nurluqman Suratman 31-Aug-22 14:07 SINGAPORE (ICIS)--China's manufacturing activity continued to contract as the country grapples with power outages caused by record heatwave and drought in August, with fresh COVID-19 curbs hampering overall industrial output and consumption.

Asia fatty acids likely to remain flat near term on slowing global demand
By Helen Yan 31-Aug-22 10:46 SINGAPORE (ICIS)--Asia's fatty acids market is likely to remain flat in the near term, as a strong US dollar versus local currencies curbs spot interest amid softening upstream crude palm oil (CPO) prices.

European PMMA to remain gripped by high costs and weak demand
By Mathew Jolin-Beech 31-Aug-22 00:06 LONDON (ICIS)--The European polymethyl methacrylate (PMMA) market is expected to remain gripped by a combination of high energy costs and soft demand.

Global weekly spot IPEX down on falls in northwest Europe, US Gulf
By Miguel Rodriguez Fernandez 30-Aug-22 23:16 LONDON (ICIS)--The spot chemicals index dropped by 0.2% as falls across northwest Europe and the US Gulf outweighed the slight increase in prices seen in northeast Asia, according to the latest figures from the weekly ICIS Petrochemical Index (IPEX).

PODCAST: Chemicals must stay on low carbon track despite current crises
By Will Beacham 30-Aug-22 22:41 BARCELONA (ICIS)--The global chemical industry must remain committed to the net zero agenda, and not be distracted by current macroeconomic and geopolitical crises.

INSIGHT: Impact of power restrictions on China petrochemicals likely to be limited amid weak demand
By Jenny Yi 30-Aug-22 21:20 SINGAPORE (ICIS)--Power supply restrictions in many parts of China have been exacerbated this year by prolonged heatwaves in Sichuan, Chongqing, Anhui, Zhejiang, Jiangsu and Hubei. Record high temperatures have prompted petrochemical plant operating rate cuts and shut downs.

Global oil outlook: Five factors to watch in Week 35
By Eloise Radley 30-Aug-22 19:43 LONDON (ICIS)--Crude rebounded last week, with Brent climbing to over $100/bbl. Supply concerns intensified as OPEC+ threatened to cut production quotas and the US Strategic Petroleum Reserve was at its lowest level in decades.

Asia refiners cut Group II base oils output on negative margins
By Whitney Shi 30-Aug-22 17:08 SINGAPORE (ICIS)--While Asian refiners had cut export prices for Group II base oils in July-August due to weak demand, they have also recently reduced output.

PP demand to slow down in East Med as region enters low-demand season
By Nadim Salamoun 30-Aug-22 05:32 DUBAI (ICIS)--Despite the summer season being traditionally a high-demand season in the region, the economic crisis coupled with the high unemployment rates and soaring inflation Jordan and Lebanon are facing have taken a toll on the purchasing power of the population. Demand has been low during the season.

China’s Sinopec H1 net profit up 10.5%; chemical earnings slump 94%
By Fanny Zhang 29-Aug-22 14:07 SINGAPORE (ICIS)--Chinese petrochemical giant Sinopec reported a 10.5% year-on-year increase in first-half 2022 net profit on the back of strong crude, even as its chemical earnings shrunk 94% as demand collapsed amid COVID-19 curbs.

China’s PE market may remain under pressure from rising supply, weak demand
By Sijia Li 29-Aug-22 10:25 SINGAPORE (ICIS)--China’s polyethylene (PE) market may face further pressure from rising supply and weak demand amid high global inflation and tepid recovery in end-use consumption, curbed by power rationing policies on rising temperatures.

Asia naphtha crack sinks in negative zone, poor margins dent demand
By Melanie Wee 26-Aug-22 13:13 SINGAPORE (ICIS)--Asia naphtha markets are under pressure from feeble demand as a result of poor downstream margins, sending the product’s crack spread into deeper negative terrain.

Asia MEG market falls into a narrow band; outlook mixed
By Judith Wang 26-Aug-22 13:00 SINGAPORE (ICIS)--Asia’s monoethylene glycol (MEG) market discussions have fallen into a narrow band during the week as market participants were weighing higher upstream cost against rising supply and slowing demand, while the outlook is mixed in the absence of clear market indicators.

Asia SM eyes downstream recovery potential in Sep as suppliers limit rates
By Trixie Yap 26-Aug-22 12:41 SINGAPORE (ICIS)--Asia's styrene monomer (SM) discussion levels will hinge on downstream market activity and recovery entering September as supply fundamentals continue to tighten with makers remaining adamant on production cuts amid volatile SM margins.

Indonesia’s extended waiver on palm oil export levy to have limited impact on oleo market
By Helen Yan 26-Aug-22 11:59 SINGAPORE (ICIS)--Indonesia’s extension of its waiver on its export levy on palm oil till the end of October is unlikely to have any significant impact on the oleochemicals market in southeast Asia.

NE Asia C2 spot demand for September rises as output cuts bite
By Yeow Pei Lin 26-Aug-22 10:34 SINGAPORE (ICIS)--Buying enquiries for September spot ethylene (C2) imports increased in northeast Asia due to reduced domestic supply caused by output cuts, which were largely in response to poor margins and high propylene inventory.

INSIGHT: Dow PE operating rate cut highlights global weakness, overcapacity and logistics constraints
By Joseph Chang 26-Aug-22 04:37 NEW YORK (ICIS)--Dow’s announcement on slashing polyethylene (PE) operating rates is a clear sign of weakening global demand and oversupply of the polymer, along with persistent logistics constraints.

European local melamine production heavily reduced on soaring gas prices; affordability concerns grow
By Melissa Hurley 26-Aug-22 01:03 LONDON (ICIS)--European melamine market players are faced with record level gas prices, leading to more shutdowns and reduced run rates. Concerns over affordability are mounting as costs drift further away from market dynamics.

US LNG to Europe to remain at elevated level
By Christopher Rene 25-Aug-22 22:49 LONDON (ICIS)--US LNG exports to Europe are set to be twice as large as 2021 volumes by the end of September, with demand driven by the current energy crisis, ICIS data shows.

INSIGHT: Downside uncertainty hits Europe refined products market but tightness remains
By Tom Brown 25-Aug-22 22:19 LONDON (ICIS)--Pricing for some refined products has started to ease from the highs during the summer as the peak demand season comes to a close and macroeconomic pressure intensifies, but structural tightness in the sector continues to buffer pricing and galvanise future demand upticks.

CDI Economic Summary: US macro challenges build amid labour resilience
By Joseph Chang 25-Aug-22 05:00 NEW YORK (ICIS)--US GDP is expected to slow further but labour and manufacturing are showing resilience while inflation may have peaked.

Mideast TDI market sees cautious optimism after FM announcement in Europe
By Damini Dabholkar 25-Aug-22 17:49 SINGAPORE (ICIS)--The Middle East market saw more activity and producers heard more enquiries from customers this week on expectations of lower supply.

Asia OX supply to tighten further; wide buy-sell gap persists
By Samuel Wong 25-Aug-22 14:45 SINGAPORE (ICIS)--Asian supply of orthoxylene (OX) is expected to stay tight, especially in China, on the back of several planned maintenance shutdowns.

South Korea hikes key interest rate to 2.5% amid soaring inflation
By Nurluqman Suratman 25-Aug-22 10:36 SINGAPORE (ICIS)--South Korea’s central bank on Thursday raised its key interest rate by 25 basis points to 2.5% in a move to contain soaring inflation, which it expects to remain at a high level for a considerable period of time.

INSIGHT: Falling demand expectations cut into crude outlook
By Tom Brown 24-Aug-22 23:17 LONDON (ICIS)--Crude demand and pricing has remained firm through the summer, but the imminent end of the peak driving season and rapidly-deteriorating macroeconomic picture are driving down price and demand expectations for the rest of 2022.

Europe PE/PP players agree to exit 2022 contracts to cut costs
By Ben Lake 24-Aug-22 17:00 LONDON (ICIS)--European polyethylene (PE) and polypropylene (PP) players, desperately looking for ways to trim costs, have resorted to agreeing to mutually abandon parts or the entirety of their 2022 contract agreements – and the relationship between buyers and sellers is likely to remain in flux for the rest of the year.

French power spot on track to deliver above UK in Q4 if nuclear woes persist
By Jack Grant and Karishma Sadanandan LONDON (ICIS)--A widening French power premium over UK equivalents on quarterly contracts this winter suggests French spot prices are likely to deliver higher than the UK during the high-demand season for the first time in recent history, if nuclear uncertainty continues to cause concerns for winter supply.

Soaring European gas prices force 13.5m tonnes of fertilizers, chemicals offline or cut
By Deepika Thapliyal 23-Aug-22 23:23 LONDON, BARCELONA (ICIS)--Soaring natural gas prices in Europe have led  to at least 13.5m tonnes of fertilizer and chemical capacity being shut down or run at reduced rates, representing up to 63% of regional capacity for the worst-affected products.

Russia’s Sakhalin-2 faces difficulties on spot LNG sales
By Roman Kazmin 23-Aug-22 15:15 SINGAPORE (ICIS)--Russia’s Sakhalin-2 project is experiencing difficulties to find participants for spot tenders, a source close to Russia’s incumbent Gazprom told ICIS.

Europe caustic soda tightens on production issues, lower utilisation rates
By Chris Barker 22-Aug-22 22:04 LONDON (ICIS)--European caustic soda players expect the market to tighten in the fourth quarter of 2022, as production of chlorine and caustic soda has decreased and force majeures and maintenance have rocked the market.

Malaysia's PCG Q2 net profit rises 0.5%; warns of waning demand
By Nurluqman Suratman 22-Aug-22 14:53 SINGAPORE (ICIS)--PETRONAS Chemicals Group (PCG) on Monday reported a marginal year-on-year increase in its second-quarter net profit thanks to higher product prices, but the Malaysian producer warned of weaker demand in the second half of 2022.

Supply chain, freight transportation problems plague chem manufacturers - ACC survey
By Adam Yanelli 19-Aug-22 02:31 HOUSTON (ICIS)--Chemical manufacturers in the US have continued to be plagued by major supply chain and transportation issues that have led to 97% of respondents modifying operations, according to the results of an American Chemistry Council member survey.

New Sakhalin-2 operator says contracts stay in place
By Ed Lane 19-Aug-22 07:53 SINGAPORE (ICIS)--The new operator of the Sakhalin-2 project, LLC Sakhalin Energy, was announced in a press statement on 19 August as several offtakers from the project confirmed it has offered the same purchasing terms for clients, but with payment to Gazprombank JSC.

Germany’s chem R&D stalls on impacts from Ukraine war, pandemic
By Stefan Baumgarten 18-Aug-22 23:54 LONDON (ICIS)--Investment on research and development (R&D) in Germany’s chemicals and pharmaceuticals industry has stalled, according to chemical producers’ trade group VCI.

Europe chemicals buyers shift from contractual volumes to spot market on crest of falling demand
By Morgan Condon 18-Aug-22 19:19 LONDON (ICIS)--As economic indicators continue to warn of a downturn towards the end of 2022, Europe’s chemicals markets are adjusting buying habits in a bid to shelter from the crash.

Eurozone construction output slips in June on widespread fall in demand
By Tom Brown 18-Aug-22 18:53 LONDON (ICIS)--Construction output in the eurozone fell 1.3% month on month in June on the back of substantial declines in civil engineering and building productivity in the region, according to data from Eurostat on Thursday.

Philippine central bank hikes key interest rates anew to tame inflation
By Pearl Bantillo 18-Aug-22 18:25 SINGAPORE (ICIS)--The Bangko Sentral ng Pilipinas (BSP) announced on Thursday a 50 basis point (bps) hike in its key interest rates, with further monetary tightening possible as average inflation this year is expected to exceed its 2.0-4.0% target.

INSIGHT: Asia petrochemical margins shrink amid price slump, poor demand
By Nurluqman Suratman 18-Aug-22 13:48 SINGAPORE (ICIS)--Asia’s petrochemical margins are being eroded by sharp price declines, high feedstock costs and tepid downstream demand, with market sentiment weighed down by economic uncertainties in China and fears of a global recession.

Challenges to mount in Europe ECH market in autumn on imports vs energy
By Heidi Finch 18-Aug-22 01:35 LONDON (ICIS)--The Europe epichlorohydrin (ECH) market could face various challenges in the autumn, amid a flurry of competitive imports, gathering macro-economic clouds and a slow derivative epoxy market on the one hand, and heightened energy cost/supply concerns on the other.

Germany's order backlog hits new high, chem backlog eases
By Stefan Baumgarten 18-Aug-22 01:00 LONDON (ICIS)--The backlog of unfilled manufacturing orders in Germany reached yet another record high in June amid the ongoing supply chain issues and raw material shortages, according to the latest statistical data on Wednesday.

Asia petrochemicals bottoming out; concerns on demand recovery, margins remain
By Joey Zhou 17-Aug-22 16:25 SINGAPORE (ICIS)--Asian petrochemical market is expected to bottom out and start rebounding in August, while most products still see lower average prices than July.

India’s GAIL runs Pata complex at reduced rates on LNG supply issue – sources
By Priya Jestin 17-Aug-22 14:33 MUMBAI (ICIS)--State-owned Gas Authority of India Ltd (GAIL) will continue operating petrochemical plants at its Pata complex in Uttar Pradesh at reduced capacity to ensure adequate gas supply to its customers, a company official said on Tuesday.

INSIGHT: High inflation, global economic uncertainty weigh on China PE market
By Amy Yu 17-Aug-22 11:02 SINGAPORE (ICIS)--Rising inflation and concerns over the global economic outlook are likely to weigh on China’s polyethylene (PE) demand growth in the second half of the year.

INSIGHT: IPEX downturn points to difficult time to come
By Nigel Davis 15-Aug-22 23:39 LONDON (ICIS)--Petrochemical price falls across the board in northeast Asia and a sharp price downturn in northwest Europe point either to a feedstock correction from earlier highs or building pressure on demand.

Saudi Aramco posts record Q2 net profit on higher oil prices
By Nurluqman Suratman 15-Aug-22 11:04 SINGAPORE (ICIS)--Saudi Aramco's second-quarter net profit surged to a record riyal (SR) 181.6bn ($48bn), on the back of higher crude oil prices and sales volumes.

Malaysia’s Q2 GDP expands 8.9%, growth to moderate on global uncertainties
By Nurluqman Suratman 12-Aug-22 15:20 SINGAPORE (ICIS)--Malaysia’s economy grew by 8.9% year on year in the second quarter of this year on improving domestic demand, but heightened global uncertainties are expected to weigh on its growth outlook, the central bank said on Friday.

High production costs erode Asian R-HDPE margins
By Arianne Perez 12-Aug-22 13:48 SINGAPORE (ICIS)--As production costs of recycled high-density polyethylene (R-HDPE) blow moulding pellets remain high in Asia while demand stays lacklustre, sellers’ margins will continue to narrow in the weeks ahead.

PODCAST: Asian olefins producers challenged to preserve margins in H2 - ICIS analysts
By Morgan Condon 12-Aug-22 05:00 LONDON (ICIS)--Asian olefins capacity is set to increase in the coming months, but against the prospect of a global recession and challenging demand it is unclear how this will develop for producers.

Trade data show US base oil export availability has not returned to pre-pandemic levels
By Amanda Hay 12-Aug-22 03:04 HOUSTON (ICIS)--ICIS trade data reveal that the US has not yet returned to pre-pandemic export levels of base oils as supply constraints, shifting trade flows and high prices have curbed export activity.

Gas-fired generation drives German power Cal ’23
By Anne Petersen 12-Aug-22 00:45 LONDON (ICIS)--The price of gas remains the main driver for the German power Cal ’23, despite the German government’s focus on limiting the use of gas for power production.

OPEC revises crude demand forecast down on slowing global economy
By Jonathan Lopez 11-Aug-22 22:40 MADRID (ICIS)--While crude oil demand continued its “strong recovery” to pre-pandemic levels, economic growth showed signs of a slowdown in July and, with it, crude demand also took a hit, producing cartel OPEC said on Thursday.

UK to face increased competition for LNG in fourth quarter
By Hector Falconer 11-Aug-22 19:20 LONDON (ICIS)--Britain is likely to face increased competition for LNG supply in the fourth quarter of 2022 amid uncertainty over Russian piped supply to mainland Europe, supporting NBP winter contracts especially in the case of cold weather.

Oil prices exposed to opposing fundamentals, extreme volatility
By Cecilia Barreiro 11-Aug-22 18:58 LONDON (ICIS)--The August outlook for oil prices is subject to increased uncertainty resulting from a number of bullish and bearish factors. Russia’s invasion of Ukraine will continue to be a central driving force and keep oil markets volatile while rising global inflation is expected to keep a lid on demand.

Singapore trims 2022 GDP growth forecast to 3-4% on global headwinds
By Nurluqman Suratman 11-Aug-22 11:43 SINGAPORE (ICIS)--Singapore on Thursday trimmed its 2022 GDP growth forecast to 3-4%, from the previous estimate of 3-5%, due to the deteriorating global economic environment.

SE Asia palm biodiesel to see record export volumes, healthy demand
By Keven Zhang 11-Aug-22 11:15 SINGAPORE (ICIS)--Southeast Asia's palm methyl ester (PME) export volumes are likely to climb to record highs in July and August, as several bullish factors boost buying interest.

PODCAST: Global chemical prices collapse, Europe prepares for dry summer, tough winter
By Will Beacham 10-Aug-22 22:43 BARCELONA (ICIS)--Global chemical prices are falling just as Europe braces itself for more summer heatwaves, drought and a winter of gas rationing.

Thai PTTGC Q2 net profit falls sharply amid lower chem margins
By Nurluqman Suratman 10-Aug-22 15:30 SINGAPORE (ICIS)--PTT Global Chemical’s (PTTGC) net profit fell by 83.9% year on year in the second quarter, weighed partly by lower margins across all of its chemicals businesses, the Thailand-based producer said on Wednesday.

Saudi SABIC Q2 net profit up 3.8%; H2 margins to stay under pressure
By Nurluqman Suratman 10-Aug-22 12:42 SINGAPORE (ICIS)--Saudi petrochemicals major SABIC posted a 3.8% year-on-year increase in second-quarter net profit, while it expects margins to remain under pressure in the second half of 2022.

INSIGHT: Indonesia economy surprises in Q2; prospects dim in H2
By Pearl Bantillo 10-Aug-22 21:03 SINGAPORE (ICIS)--Indonesia’s growth momentum is expected to weaken for the rest of the year and into 2023, as high inflation hits overall domestic consumption. External demand is being threatened by a possible global recession.

Saudi SABIC Q2 net profit up 3.8%; H2 margins to stay under pressure
By Nurluqman Suratman 10-Aug-22 12:42 SINGAPORE (ICIS)--Saudi petrochemicals major SABIC posted a 3.8% year-on-year increase in second-quarter net profit, while it expects margins to remain under pressure in the second half of 2022.

China July petrochemical markets slump; outlook stays bearish
By Yvonne Shi 09-Aug-22 08:00 SINGAPORE (ICIS)--China's petrochemical markets fell across the board in July on weak demand, which persists into August while supply is projected to grow for the rest of the year.

Asia BDO extends losses as demand at a low ebb
By Clive Ong 04-Aug-22 16:47 SINGAPORE (ICIS)--The Asian butanediol (BDO) market extended losses with the downtrend still firmly entrenched. Market participants expect further downside potential in the near term as the decline that started in April does not appear to have run its course.

PODCAST: LPG substitution of higher-priced LNG limited in China
By Yan Wang 04-Aug-22 15:37 GUANGZHOU (ICIS)--ICIS analysts Wang Yan and Xu Fei discuss with Asia deputy news editor Pearl Bantillo why China is not aggressively using liquefied petroleum gas (LPG) as substitute for liquefied natural gas (LNG) in fuel applications in industries despite global supply concerns and soaring LNG prices.

Asian import offers for NBR fall with weak demand, outlook bleak
By Ai Teng Lim 04-Aug-22 10:34 SINGAPORE (ICIS)--Asian spot import offers for acrylonitrile butadiene rubber (NBR) have slipped lower as sellers widened discounts to chase deals in a low-demand market.

India July exports slip; trade deficit widens to record $31bn
By Priya Jestin 03-Aug-22 14:43 MUMBAI (ICIS)--India’s merchandise exports in July dipped for the first time in over a year, while increased imports of crude oil and coal bloated the country’s trade deficit to a record $31bn.

Asia butac, etac slump; demand tepid on weak regional currencies
By Melanie Wee 02-Aug-22 17:41 SINGAPORE (ICIS)--Asia’s butyl acetate (butac) markets are being weighed down by tepid demand as continued weakness of currencies in the region continues to undermine imports.

Asia July industries - a mixed bag as battle with inflation continues
By Nurluqman Suratman 02-Aug-22 13:59 SINGAPORE (ICIS)--Asia's manufacturing sector in July presented a mixed performance, with major economies in the northeast showing a marked slowdown in activity, as the region continues to contend with high input costs and weak demand.

OUTLOOK: Asia epoxy resins to stay sluggish; price competition may intensify
By Luffy Wu 02-Aug-22 13:46 SINGAPORE (ICIS)--Uncertain end-demand outlook and recession fears continue to haunt Asia’s epoxy resins market, with aggressive exports from China forcing some regional suppliers to lower offer.

South Korea July inflation nears 24-year high at 6.3%
By Nurluqman Suratman 02-Aug-22 12:26 SINGAPORE (ICIS)--South Korea's consumer price index (CPI) rose by 6.3% year on year in July, accelerating from 6.0% in the previous month and the fastest rate recorded in nearly 24 years.

OUTLOOK: Europe soda ash market considers quarterly prices as yearly contracts see further correction
By Anne-Sophie Briant-Vaghela 28-Jul-22 18:33 LONDON (ICIS)--Northwest Europe (NWE) and Black Sea contract prices rose 3% and 5.4% from Q2 contract prices this week, marking a third adjustment to annual agreements settled in Q4 last year, as the market reconsiders the pace at which to negotiate prices going forward in the face of heightened volatility in upstream markets.

OUTLOOK: Asian OX demand to stay soft, export opportunity to the West
By Samuel Wong 28-Jul-22 16:47 SINGAPORE (ICIS)--Demand for Asian orthoxylene (OX) is expected to stay soft for the second half of the year, amid a pessimistic downstream demand outlook going forward.

Shell Q2 chemicals loss of $158m as margins hit
By Nigel Davis 28-Jul-22 17:54 LONDON (ICIS)--Higher feedstock and utility costs and higher turnaround activities hit Shell’s chemicals earnings in the second quarter, the energy giant said on Thursday.

PODCAST: Asia C2, downstream recovery in H2 fraught with risks
By Jasmine Khoo 28-Jul-22 15:25 SINGAPORE (ICIS)--The first half of 2022 saw widespread cutbacks in Asia’s cracker and downstream operating rates as the market faced more headwinds from the war in Ukraine and COVID flare-ups in China.

Belgium’s Solvay Q2 underlying profit jumps on higher prices, strong demand
By Pearl Bantillo 28-Jul-22 14:42 SINGAPORE (ICIS)--Solvay’s second-quarter underlying profit increased 70% year on year on the back of higher prices and a 6% increase in sales volumes amid strong demand across key markets, the Belgian specialty chemicals producer said on Thursday.

S Korea's S-Oil Q2 net income more than doubles; Q3 PX spread to weaken
By Nurluqman Suratman 28-Jul-22 13:38 SINGAPORE (ICIS)--S-Oil's second-quarter net income more than doubled year on year on strong refining margins and robust aromatics demand, but the South Korean producer’s paraxylene (PX) spread is expected to weaken in July-September 2022.

Fitch downgrades PTTGC rating as high costs to hit earnings
By Pearl Bantillo 25-Jul-22 17:44 SINGAPORE (ICIS)--Fitch Ratings has downgraded PTT Global Chemical’ long-term national rating and senior unsecured rating to “AA” from “AA+” given weaker earnings prospect for the Thai producer.

Singapore June core inflation at 4.4% - highest since Nov 2008
By Nurluqman Suratman 25-Jul-22 14:11 SINGAPORE (ICIS)--Singapore's core year-on-year inflation in June stood at 4.4%, up from 3.6% in May and the highest hit since November 2008, official data showed on Monday.

India's RIL Q1 oil-to-chems earnings jump 63%; cracker rates fall to 87%
By Nurluqman Suratman 25-Jul-22 12:36 SINGAPORE (ICIS)--Reliance Industries Ltd's (RIL) oil-to-chemicals net profit increased by around 63% year on year in its fiscal first quarter ending June 2022 on the back of higher oil and product prices.

BLOG: Europe’s gas crisis: the implications for global chemicals
By John Richardson 25-Jul-22 11:41 SINGAPORE (ICIS)--Click here to see the latest blog post on Asian Chemical Connections by John Richardson. The European chemicals is no doubt in the midst of intensive crisis management because of the risk that this winter will see power cuts and interruptions in the supply of natural gas supply needed for feedstocks and to run furnaces, etc.

INSIGHT: Weakening Asian currencies stifle petrochemical demand
By Felicia Loo 22-Jul-22 13:41 SINGAPORE (ICIS)--The continued depreciation of Asian currencies against the strong US dollar is quashing hopes of a petrochemical demand recovery, as imports become more expensive, eroding the purchasing power of buyers in the region.

INSIGHT: Europe chemicals must prepare now for deep gas cuts
By Will Beacham 22-Jul-22 11:00 LONDON (ICIS)--Chemical companies across Europe need to prepare now for an almighty battle over gas rationing as winter approaches.

The Nord Stream pipeline is back online at around 40% capacity, but it may continue to operate at very reduced rates and could easily be switched off again if the Kremlin decides to continue using it as a political weapon to hurt Europe’s economy. Gas rationing is still likely this winter, with or without this source of supply.

INSIGHT: Ferts, petchems in firing line as EU gas stockpile pressure intensifies
By Aura Sabadus 20-Jul-22 18:38 LONDON (ICIS)--Embattled European fertilizer and petrochemical producers may be the first in line to cut gas consumption as political pressure is mounting to save supplies ahead of a difficult winter.

As Russia, Europe’s largest gas supplier, has been limiting exports to less than a quarter of its deliveries two years ago and may stop them altogether amid its political stand-off with the EU, Brussels has now issued guidance to reduce demand by 15% between 1 August 2022 – 31 March across member states.

Gas flows resume on Nord Stream pipeline but remain below capacity
By Tom Brown 21-Jul-22 12:22 LONDON (ICIS)--Flows resumed on Thursday along the Nord Stream natural gas pipeline between Russia and Europe, but the volume of deliveries remains significantly below capacity.

Running between Russia and Germany, the pipeline is a key part of the EU’s energy infrastructure, and there had been questions over whether gas deliveries would resume once work had been completed.

Inflation to stay ‘undesirably’ high in mid-term – ECB’s Lagarde
By Tom Brown 21-Jul-22 23:42 LONDON (ICIS)--Inflation levels in the eurozone are expected to remain high for some time, European Central Bank (ECB) president Christine Lagarde said on Thursday, as the bank moved to hike each of its key interest rates and prepare a new bond purchase scheme.

OUTLOOK: Asia PX to take cue from downstream in H2; tight supply to ease
By Samuel Wong 21-Jul-22 13:57 SINGAPORE (ICIS)--Asia’s paraxylene (PX) is expected to take its cue from the downstream purified terephthalic acid (PTA) market in the second half of 2022, moving away from the previous strong support from gasoline blending markets.

Developing Asia GDP growth cut to 4.6% on China slowdown – ADB
By Nurluqman Suratman 21-Jul-22 12:05 SINGAPORE (ICIS)--The Asian Development Bank (ADB) on Thursday cut its GDP growth forecast for developing Asian countries to 4.6% from its previous projection of 5.2%, with China’s growth lowered by a full percentage point to 4.0%.

INTERVIEW: Financing market a major headwind for chemical deals – banker
By Joseph Chang 18-Jul-22 23:53 NEW YORK (ICIS)--Extremely challenged debt markets will be a major headwind for leveraged chemical deals going forward, an investment banker said.

Global weekly spot IPEX down significantly on falls across regions
By Yashas Mudumbai 18-Jul-22 17:40 LONDON (ICIS)--The spot chemicals index dropped by 5.2% as falls across regions continued, according to the latest figures from the weekly ICIS Petrochemical Index (IPEX).

Asia July petrochemicals on general downtrend; sentiment to stay bearish
By Jimmy Zhang 18-Jul-22 17:07 SINGAPORE (ICIS)--Downward price corrections have been seen for crude and Asia’s petrochemicals markets in July, following a general increase in June. ICIS expects the bearish sentiment to continue throughout the month as previous sharp increases in crude prices may not be seen again for the rest of 2022.

OUTLOOK: Asia FAE demand to stay soft on sluggish Chinese economy
By Helen Yan 15-Jul-22 17:37 SINGAPORE (ICIS)--Asia’s fatty alcohol ethoxylates (FAE) demand is expected to remain soft in the near term due to prevailing weak market conditions and a sluggish Chinese economy.

OUTLOOK: Asia VAM correction accelerates; H2 demand to stay weak
By Helen Lee 15-Jul-22 15:48 SINGAPORE (ICIS)--Asia’s vinyl acetate monomer (VAM) market correction has accelerated (this week) since late May (late May refers to the start of the correction) on broad-based demand slowdown, with inflationary pressures dampening the outlook in the second half.

Indonesia palm oil shipments surge 89% in June after lifting export ban
By Nurluqman Suratman 15-Jul-22 15:20 SINGAPORE (ICIS)--Indonesia's shipments of palm oil and its derivatives surged by 89.3% year on year in June following the lifting of an export ban a month earlier, official data showed on Friday.

World petrochemical market sentiment weak as demand falters
By Felicia Loo 15-Jul-22 14:12 SINGAPORE (ICIS)-Global petrochemical markets are mired in a challenging situation writ large, with demand dull as recession risks gather pace.

OUTLOOK: East, South Asia LAB at a crossroad amid elevated economic uncertainty
By Clive Ong 15-Jul-22 11:12 SINGAPORE (ICIS)--Linear alkylbenzene (LAB) markets in east and south Asia are at a crossroad with the path ahead mired in uncertainty. With outlook increasingly clouded, participants found decision-making an onerous task.

Inflationary pressures could impact economic growth in Europe for coming years
By Morgan Condon 14-Jul-22 22:55 LONDON (ICIS)--The European economy is set to hit record highs for inflation this year as the Russian invasion of Ukraine has driven energy and food prices higher, but volatile macroeconomic conditions obfuscate when sentiment will calm down.

INSIGHT: Asia C2, downstream recovery in H2 fraught with risks (Part 2)
By Yeow Pei Lin 14-Jul-22 13:00 SINGAPORE (ICIS)--The outlook for Asia's ethylene derivatives remains largely weak in the second half of 2022. Capacity is growing across downstream sectors but demand is uncertain amid China's zero-COVID stance and global recession fears.

INSIGHT: Asia C2, downstream recovery in H2 fraught with risks
By Yeow Pei Lin 13-Jul-22 13:00 SINGAPORE (ICIS)--The first half of 2022 saw widespread cutbacks in Asia’s cracker and downstream operating rates as the market, which was already sagging under the weight of huge capacity increases in South Korea and China, faced more headwinds from the war in Ukraine and COVID flare-ups in China.

Singapore tightens monetary policy further to tame inflation
By Nurluqman Suratman 14-Jul-22 13:53 SINGAPORE (ICIS)--Singapore's central bank unexpectedly tightened its monetary policy on Thursday in a bid to quell mounting inflation pressures, which are expected to continue heating up this year.

OUTLOOK: China base oils imports to continue decline in H2
By Whitney Shi 12-Jul-22 13:43 SINGAPORE (ICIS)--China’s base oils imports slumped year on year in January-June 2022 on strong import prices, which will likely persist into the second half although demand from downstream lubricant producers could improve in the third quarter.

LNG shipping activity rises in both basins
By Roman Kazmin 12-Jul-22 11:39 SINGAPORE (ICIS)--South Korean shipowner H-Line has chartered a vessel for a single voyage on behalf of the incumbent KOGAS as charter activity steps up in the Atlantic and Pacific basins.

Crude falls nearly $2/bbl on fresh China COVID-19 curbs
By Nurluqman Suratman 12-Jul-22 11:08 SINGAPORE (ICIS)--Oil prices fell by nearly $2/bbl on Tuesday morning on worries over fresh COVID-19 restrictions in China, the world's biggest crude importer.

OUTLOOK: Asia naphtha braces for H2 with trepidation, frail demand
By Melanie Wee 12-Jul-22 10:33 SINGAPORE (ICIS)--Asia naphtha markets are headed for challenging times as cautious demand outweighs oil supply concerns.

Europe petchems natgas worries rise as Nord Stream 1 enters maintenance
By Morgan Condon 08-Jul-22 17:18 LONDON (ICIS)--The threat of short gas supply in Europe is causing concern in the region’s petrochemicals industry and could begin to weigh down on production.

INSIGHT: UK chemicals battle 'Four Horsemen of the Apocalypse'
By Will Beacham 08-Jul-22 18:23 LONDON (ICIS)--The UK’s chemical sector is battling against “The Four Horsemen of the Apocalypse” as it is battered by the fallout from Brexit, COVID-19, the cost of living crisis and the war in Ukraine, according to the CEO of trade group The Chemical Industries Association (CIA).

Malaysia May chemicals sales up 7.7%; high inflation threatens production
By Nurluqman Suratman 08-Jul-22 16:16 SINGAPORE (ICIS)--Malaysia's chemicals sector sales in May rose by 7.7% year on year, supporting the overall expansion in manufacturing revenue, but inflation headwinds are expected to continue to weigh on overall factory activity.

NE Asia ethylene stays weak; August demand recovery likely tepid
By Yeow Pei Lin 08-Jul-22 10:53 SINGAPORE (ICIS)--Northeast Asia’s spot ethylene import prices fell for a 14th week as poor downstream demand continued to outweigh production cuts.

Crude trades below $100/bbl on global recession fears
By Nurluqman Suratman 07-Jul-22 12:02 SINGAPORE (ICIS)--Oil prices were extending losses on Thursday, with both key benchmarks trading below the psychological $100/bbl mark, amid growing concerns that the global economy will again plunge into a recession.

Asia petchems mired in bearishness on elevated recession fears
By Felicia Loo 07-Jul-22 11:21 SINGAPORE (ICIS)--Asian petrochemical markets are in a jam, with price bearishness across the board as recession risks continue to mount. Elevated concerns on the economic front, from the fallout of the Russia-Ukraine conflict and sanctions on Russia, plus fears of upward spiralling inflation continue to weigh on sentiment.

OUTLOOK: Tight supply concerns flip to reduced oil demand by Q4
By Barney Gray 07-Jul-22 00:49 LONDON (ICIS)--Oil prices were in a post-Covid recovery phase prior to Russia’s invasion of Ukraine in February. Since then, H1 crude prices have been driven by the fallout from the war, reaching record highs. But the oil market will be characterised by major volatility and rising uncertainty as we head into H2.

Japan May trade deficit biggest in eight years; imports surge 48.9%
By Pearl Bantillo 16-Jun-22 18:56 SINGAPORE (ICIS)--Japan posted its biggest trade deficit in eight years at yen (Y) 2.385tr ($18bn), with imports surging by 48.9%, largely due to high energy prices and sharp depreciation of the yen.

US LNG deliveries to the UK in July set to be more profitable than Asian destinations
By Kaja Sillett 16-Jun-22 18:36 LONDON (ICIS)--US LNG deliveries to the UK in July are set to be more profitable than to east Asian destinations, despite the British NBP July’22 contract remaining at a discount to the equivalent ICIS East Asia Index (EAX) price, according to ICIS calculations.

India May exports grow 20.6%; trade deficit widens to $24.3bn
By Priya Jestin 16-Jun-22 17:03 MUMBAI (ICIS)--India’s merchandise exports in May rose by 20.6% year on year to $38.9bn, backed by higher shipments of petroleum products and chemicals, but the country’s trade deficit widened due to high cost of energy imports.

China MEG prices rise on stronger crude market
By Cindy Qiu 16-Jun-22 14:57 SINGAPORE (ICIS)--China’s monoethylene glycol (MEG) prices have been on an uptrend since June, mainly driven by the bullish crude market, as supply-demand fundamentals remain largely unchanged. This has somewhat dampened market players’ confidence in the market outlook.

Asian petrochemicals to rebound in June amid bumpy recovery - ICIS analysts
By Ann Sun 16-Jun-22 12:12 SINGAPORE (ICIS)--Asian petrochemical market is expected to be generally firmer in June given higher crude prices and easing lockdowns in China, according to a latest Price Forecast by ICIS analysts.

Asia BDO weakens on prevailing weak demand, ample supply
By Clive Ong 16-Jun-22 11:32 SINGAPORE (ICIS)--The Asian butanediol (BDO) market remains on a downtrend with regional demand staying lacklustre while ample supply made buyers unhurried. Suppliers concede that buying interest showed limited signs of any revival with further market weakness a possibility.

S Korea truckers' strike to hit Ulsan petrochemical output; halts port ops
By Nurluqman Suratman 10-Jun-22 18:28 SINGAPORE (ICIS)--The ongoing nationwide strike by unionised truckers in South Korea are forcing several producers in the petrochemical hub of Ulsan to consider production cuts amid logistics disruption.

SE Asia biodiesel market optimism rises on post-lockdown China
By Felicia Loo 10-Jun-22 17:35 SINGAPORE (ICIS)--Market optimism in China to increase imports of southeast Asian palm methyl ester (PME) biodiesel helped bolster market sentiment to some degree amid higher weekly gains in feedstock crude palm oil (CPO) futures.

Asia PET offers reaching level of last historic high on recent upstream price surges
By Hazel Goh 10-Jun-22 12:15 SINGAPORE (ICIS)--Asia polyethylene terephthalate (PET) offers increased in the week and were approaching the level of the last historic high four years ago amid recent Asia upstream price surges.

NE Asia ethylene stays bearish on ample supply, weak demand
By Yeow Pei Lin 10-Jun-22 11:59 SINGAPORE (ICIS)--Northeast Asia’s spot ethylene prices stayed weak due to ample supply amid limited demand for end-June and first-half July arrival cargoes.

India domestic LAB prices rise; China demand improves as lockdowns ease
By Clive Ong 10-Jun-22 11:53 SINGAPORE (ICIS)--India’s domestic prices for linear alkylbenzene (LAB) have spiked on the back of rising costs, but some players expect some headwinds with the monsoon season kicking off.

Oil prices drop more than $1/bbl on partial lockdowns in China
By Nurluqman Suratman 10-Jun-22 11:34 SINGAPORE (ICIS)--Oil prices fell more than $1/bbl on Friday on renewed demand fears after fresh COVID-19 lockdown measures were announced in China, but tight supply concerns capped losses.

S Korea truck drivers go on strike amid rising fuel costs, inflation
By Nurluqman Suratman 08-Jun-22 14:17 SINGAPORE (ICIS)--South Korea's unionised cargo truck drivers are staging a nationwide, indefinite general strike at ports and container depots across the country in a move which could potentially impact petrochemical-related supply chains and logistics.

East Asia and Pacific growth to slow to 4.4% in 2022 on China deceleration - World Bank
By Nurluqman Suratman 08-Jun-22 11:54 SINGAPORE (ICIS)--Growth in East Asia and the Pacific is projected to slow to 4.4% this year from the 7.2% expansion in 2021, reflecting the marked deceleration in China, the World Bank said late on Tuesday.

Asian PTA prices up on firmer feedstock costs, sustainability uncertain
By Samuel Wong 08-Jun-22 11:51 SINGAPORE (ICIS)--Asian purified terephthalic acid (PTA) prices were supported by costs push because of higher feedstock paraxylene (PX) costs, but long-term sustainability is still a question amid a lack of strong demand growth in the downstream polyester sector.

China May petrochemicals track crude gains; June demand to improve
By Yvonne Shi 08-Jun-22 11:09 SINGAPORE (ICIS)--China’s petrochemical markets largely tracked gains in crude prices in May, accompanied by some improvement in demand as pandemic-related restrictions have started to ease.

Japan's Q1 GDP revised to smaller contraction of 0.5%
By Nurluqman Suratman 08-Jun-22 11:01 SINGAPORE (ICIS)--Japan's economy shrank less than initially reported in the first quarter, contracting by an annualised 0.5% instead of the initial 1.0% drop, on the back of improved private consumption, official data showed on Wednesday.

Asia polyester prices gain momentum tracking higher crude, rising cost pressure
By Judith Wang 07-Jun-22 16:27 SINGAPORE (ICIS)--Asia polyester prices gained further momentum as bullish crude futures and rising feedstock prices bolstered spot discussions, while demand has showed some improvement on easing lockdowns in China.

Asia Q3 biodiesel market sentiment to stay weak on poor European demand
By Felicia Loo 07-Jun-22 12:13 SINGAPORE (ICIS)--The third-quarter market sentiment for southeast Asian palm methyl ester (PME) biodiesel is expected to remain weak amid poor buying requirements from Europe, a key importing region for southeast Asian material.

INSIGHT: India cuts raw material import duties to boost local production
By Priya Jestin 07-Jun-22 12:07 MUMBAI (ICIS)--India has cut import duties on some raw materials in the hope of boosting overall domestic production amid surging inflation and rupee weakness.

VIDEO: China PTA plants’ run rates stay low on high production costs
By Winnie Huang 01-Jun-22 18:35 SINGAPORE (ICIS)--Watch industry analyst Lifang Huang discuss China’s purified terephthalic acid (PTA) market amid high production cost.

PODCAST: China LPG prices fluctuate on elevated costs, weak demand
By Candy Nie 01-Jun-22 17:44 SINGAPORE (ICIS)--ICIS analyst Jady Ma and Candy Nie discuss the recent developments and outlook of China's Liquefied petroleum gas (LPG)  market.

Saudi Aramco’s June LPG contract prices continue downtrend
By Candy Nie 01-Jun-22 15:10 SINGAPORE (ICIS)--Saudi Aramco’s term contract prices (CP) for June-loading liquefied petroleum gas (LPG) continued to edge down and hit a five-month low, the company announced on Tuesday afternoon.

China MTBE cargoes face narrowing arbitrage opportunities into Europe
By Jun Kai Heng 01-Jun-22 14:17 SINGAPORE (ICIS)--The reopening of the Chinese economy in June is expected to pressure arbitrage opportunities into Europe for Chinese methyl tertiary butyl ether (MTBE) cargoes.

S Korea May petrochemical exports rise 14%, total exports up 21.3%
By Nurluqman Suratman 01-Jun-22 12:32 SINGAPORE (ICIS)--South Korea's petrochemical exports rose by 14% year on year to $5.18bn in May, supporting the overall rise in shipments abroad, official data showed on Wednesday.

Japan's au Jibun Bank May manufacturing PMI dips to 53.3 on slower output growth
By Nurluqman Suratman 01-Jun-22 11:38 SINGAPORE (ICIS)--au Jibun Bank’s manufacturing purchasing managers’ index (PMI) for Japan slipped to 53.3 in May from 53.5 in April as new orders rose at a slower rate, the Japanese bank said on Wednesday.

Topic Page by Aura Sabadus and Will Beacham. Additional reporting by  Richard Ewing and Sophie Udubasceanu. Maps and graphs by Yashas Mudumbai.