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TOPIC PAGE: Sustainability in the fertilizers industry
Updated on 26 February. On this topic page, we gather the latest news, analysis and resources, to help you to keep track of developments in the area of sustainability in the fertilizers industry. LATEST NEWS HEADLINES Germany’s Heraeus invests in Japanese ammonia tech company By Stefan Baumgarten 22-Feb-24 LONDON (ICIS)–German technology group Heraeus has invested an undisclosed amount in Tsubame BHB, a Japanese company that has developed a precious metal-based technology for decentralized ammonia production. Malaysia’s PCG, Sarawak Petchem agree to study low-carbon ammonia and urea plant By Nurluqman Suratman 21-Feb-24 SINGAPORE (ICIS)–Malaysia’s PETRONAS Chemicals Group (PCG) and methanol producer Sarawak Petchem on Wednesday signed an agreement for a joint feasibility study aimed at establishing a low-carbon ammonia and urea production facility in Bintulu, Sarawak. Egypt’s Helwan signs agreement to produce black urea By Deepika Thapliyal 20-Feb-24 LONDON (ICIS)–In Egypt, Helwan has signed an agreement with SML-INNO UK Ltd to set up the world's first vertical integrated unit to produce black urea, with a capacity of 130,000 tonnes annually, the company said today. EU eases climate proposals after widespread farmer protests By Chris Vlachopoulos 07-Feb-24 LONDON (ICIS)–European Commission President Ursula von der Leyen announced on Tuesday that the EU has agreed to ease key demands in its climate proposal plans, following intense protests from farmers. Tecnimont awarded engineering contract for Portugal green hydrogen, ammonia plant By Graeme Paterson 05-Feb-24 LONDON (ICIS)–Tecnimont has been awarded an engineering contract to develop an integrated green hydrogen and green ammonia plant at Sines, Portugal, its parent company Maire said on Monday. EU proposes relaxation in policy following farmer protests By Deepika Thapliyal 31-Jan-24 LONDON (ICIS)–The European Commission Wednesday proposed relaxing green farming requirements under the Common Agricultural Policy (CAP), in its first attempt to quell farmer protests across Europe as the sector struggles to stay economically viable. Biden Administration invests $207m in domestic fertilizer and clean energy endeavours By Chris Vlachopoulos 23-Jan-24 LONDON (ICIS)–The Biden Administration is investing $207m in domestic fertilizer and renewable energy projects, the US Department of Agriculture (USDA) Secretary Tom Vilsack announced on Monday, 22 January. Brazil’s state of Ceara, Bp sign MoU for green hydrogen site By Jonathan Lopez 18-Jan-24 SAO PAULO (ICIS)–The government of the Brazilian state of Ceara and UK-headquartered energy major Bp signed this week a Memorandum of Understanding (MoU) to build a green hydrogen site. Atome Energy in talks with buyers for green fertilizer from Paraguay unit By Manuja Pandey 17-Jan-24 LONDON (ICIS)–UK's Atome Energy Plc is in advanced negotiations with leading international players for the offtake of green calcium ammonium nitrate (CAN) fertiliser from its production facility in Villeta, Paraguay. Sweden's Cinis targets Asia potash market with Itochu partnership By Andy Hemphill 16-Jan-24 LONDON (ICIS)–Swedish green-tech start-up Cinis Fertilizer has signed a letter of intent (LOI) with Japan-headquartered trading house Itochu to launch its environmentally-friendly mineral fertilizer in the Asian market. Helwan selects Eurotecnica's Euromel G5 technology for new melamine facility in Egypt By Melissa Hurley 15-Jan-24 LONDON (ICIS)–Eurotecnica has been selected by Helwan Fertilizers Company (HFC) for the implementation of a world-scale melamine plant based on proprietary Euromel G5 melamine technology, the technology arm of Switzerland's Proman said on Monday. India’s Adani Group plans $24bn green energy park; RIL to commission giga complex By Priya Jestin 12-Jan-24 MUMBAI (ICIS)–India’s western Gujarat state is set to become the domestic hub of green energy projects following an announcement by the Adani Group to set up a large green energy park and Reliance Industries Ltd (RIL) set to commission its giga complex in the state soon. INPEX and LSB pick technology for US ammonia project By Stefan Baumgarten 10-Jan-24 HOUSTON (ICIS)–INPEX Corp and LSB Industries have chosen KBR’s blue ammonia technology for a planned 1.1m tonne/year low-carbon ammonia project on the US Gulf Coast, KBR said on Wednesday. Bayer partners with energy firms on hydrogen cluster in Germany By Stefan Baumgarten 09-Jan-24 LONDON (ICIS)–Pharmaceuticals and agrochemicals company Bayer has signed a memorandum of understanding (MoU) with three energy firms – E.ON, Iqony and Westenergie – to establish a hydrogen cluster at its Bergkamen production site near Dortmund, at the eastern edge of Germany's Ruhr industrial region. At the core of the project will be the production of green hydrogen from imported ammonia. S Korean group picks KBR tech for Malaysian green ammonia project By Al Greenwood 08-Jan-24 HOUSTON (ICIS)–A South Korean consortium has chosen KBR's K-GreeN process technology for a green ammonia project that it will develop in Sarawak, Malaysia, the US-based engineering company said on Monday. Abu Qir signs MoU for green ammonia project in Egypt By Sylvia Traganida 03-Jan-24 LONDON (ICIS)–North Abu Qir for Agricultural Nutrients has signed a memorandum of understanding (MoU) with ABB International Group, MPS Infrastructure Company, and Petrojet for the supply of green hydrogen and renewable electricity. EU CARBON BORDER ADJUSTMENT MECHANISM (CBAM) EXPLAINED What is it? The risk of carbon leakage frustrates the EU’s efforts to meet climate objectives. It occurs when companies transfer production to countries that are less strict on emissions, or when EU products are replaced by more carbon-intensive imports. This new mechanism would counteract this risk by putting a carbon price on imports of certain goods from outside of the EU. How will it work? EU importers will buy carbon certificates corresponding to the carbon price that would have been paid, had the goods been produced under the EU's carbon pricing rules. Conversely, once a non-EU producer can show that they have already paid a price for the carbon used in the production of the imported goods, the corresponding cost can be fully deducted for the EU importer. This will help reduce the risk of carbon leakage by encouraging producers in non-EU countries to make their production processes greener. A reporting system will apply from 2023 with the objective of facilitating a smooth roll out and to facilitate dialogue with non-EU countries. Importers will start paying a financial adjustment in 2026. How is the fertilizer industry affected? The fertilizer industry is one of the sectors to fall under the CBAM. The more energy-intensive nitrogen fertilizers will be affected most in the sector by the mechanism. DEFRA CONSULTATIONS EXPLAINED The UK’s Department for Environment, Food & Rural Affairs (DEFRA) launched a consultation at the beginning of November 2020 on reducing ammonia emissions from urea fertilizers. The consultation ran until 26 January 2021. It set out three options for tackling ammonia emissions: A total ban on solid urea fertilizers A requirement to stabilise solid urea fertilizers with the addition of a urease inhibitor. A requirement to restrict the spreading of solid urea fertilizers to between 15 January and 31 March of a given year. Liquid urea is excluded from any new rules or restrictions. DEFRA is currently analysing the feedback received. In March 2022, DEFRA announced that it had delayed introducing restrictions on the use of urea by at least a year to support farmers with fertilizer availability and keep their costs down Should DEFRA decide to restrict the use of urea in the future, growers would be left with just ammonium nitrate-based fertilizers. PREVIOUS NEWS HEADLINES Yara aims to launch first container ship to run off clean ammonia India’s Odisha state approves green hydrogen, ammonia, methanol projects ADM announces launch of regenerative agriculture program in Brazil Fertiglobe completes first renewable ammonia shipment with carbon certification Allied Green Ammonia picks Topsoe’s tech for Australia project Germany’s VNG looks to secure offtake from Norwegian low carbon ammonia plant Gentari enters into agreement with AM Green to invest into a green ammonia delivery platform ITOCHU Corporation, Orascom Construction sign MOU for development of ammonia bunkering in Suez Canal India developing port infrastructure for green hydrogen exports S Korea, Saudi Arabia firms sign 46 pacts, includes blue ammonia project INSIGHT: CBAM reporting begins, fertilizer exporters to EU challenged to account for carbon KBR to supply green ammonia tech to Madoqua Power2X site in Portugal Germany’s SOM to build green hydrogen, ammonia facility in Brazil’s Piaui state US ADM and Syngenta sign MoU to collaborate on low carbon oilseeds to meet biofuel demand Tecnicas Reunidas, Allied Green Ammonia to build green hydrogen and green ammonia plant in Australia Australian fertilizer producer Orica accelerates climate change targets Nestle, Cargill and CCm Technologies launch joint UK trial on sustainable fertilizer EnBW acquires stake in planned Norwegian ammonia plant Yara Germany signs agreement for decarbonisation of cereal cultivation using green fertilizers Hyphen, ITOCHU ink MoU to explore potential Namibia hydrogen collaboration INSIGHT: BASF grapples with demand trough, slow road back SABIC AN ships low-carbon urea to New Zealand US Cargill and John Deere collaborate to enable revenue for farmers adopting sustainability Canada’s Lucent Bio announces approval of biodegradable nutrient delivery patent Aker, Statkraft’s 10-year PPA to spur European renewable ammonia push further BASF, Yara Clean Ammonia to evaluate low-carbon blue ammonia production facility in US Gulf Coast Yara Clean Ammonia, Cepsa to launch clean hydrogen maritime corridor EU details CBAM reporting obligations Saudi Arabia’s Ma’aden exports its first low-carbon blue ammonia shipments to China US Bunge and Nutrien Ag announce alliance to support sustainable farming practices Maire subsidiary Stamicarbon wins US green ammonia engineering contract India’s IFFCO launches liquid nano-DAP fertilizer EU Parliament backs CBAM, emissions trading measures OCP granted €100m green loan to build solar plants at Morocco facilities EU unveils plans to tackle greenwashing India’s IFFCO and CIL to manufacture nano DAP for three years USDA awards Ostara funds to boost sustainable phosphate fertilizer output Canadian prime minister confirms fertilizer emission goal is voluntary US fertilizers industry increases carbon capture in 2021 – TFI Indian president calls for reduction in chemical fertilizer use IFFCO plans to export nano urea to 25 countries Amman selects Elessent Clean Technologies for Indonesia sulphuric acid plant Lotte Chemical forms clean ammonia consultative body with RWE and Mitsubishi Corporation Global 2020-2021 specialty fertilizer demand growth led by north America, Asia BASF and Cargill extend enzymes business and distribution to US Saudi Aramco awards sulphur facilities overhaul contract to Technip India sets green hydrogen targets for shipping, oil & gas, fertilizer sectors Germany misses climate target despite lower energy consumption TFI reacts to US Congress passing the Water Resources Development ActHelm becomes a shareholder in UK bio-fertilizer company Unium Bioscience Yara inks deal to deliver fossil-free green fertilizers to Argentina Canadian firms plan fuel cell generator pilot using green ammonia Deepak Fertilizers awards contract to reduce emissions, increase productivity Saudi Aramco launches $1.5bn sustainability fund to support net zero ambition CF Industries and ExxonMobil plan CCS project in Louisiana Canada’s plan to cut fertilizer emissions is voluntary – minister Canada’s fertilizer emission goal raises food production concerns Uniper, Vesta to cooperate on renewable ammonia site in the Netherlands German Uniper to work with Japan’s JERA on US clean ammonia projects ADNOC ships first cargo of low-carbon ammonia to Germany US Mosaic and BioConsortia expand collaboration to microbial biostimulant IMO deems Mediterranean Sea area for sulphur oxides emissions control Canada's Soilgenic launches new enhanced efficiency fertilizers technology for retail Austria's Borealis aims to produce 1.8m tonnes/year of circular products by 2030 European Parliament rejects proposed carbon market reform IFA ’22: southern Africa looks to bio-fertilizer as cheaper, sustainable option IFA '22: Indian farmers will struggle to embrace specialty fertilizers – producer Canadian Nutrien plans to build world’s largest clean ammonia facility in Louisiana Japan's JGC Holdings awards green ammonia plant contract to KBR Bayer to partner with Ginkgo to produce sustainable fertilizers Australia Orica and H2U Group partner on Gladstone green ammonia project Canada sets tax credit of up to 60% for carbon capture projects UK delays urea restrictions to support farmers as fertilizer costs at record high EU states agree to back carbon border tax Yara to develop novel green fertilizer from recycled nutrients USDA announces plans for $250m grant programme to support American-made fertilizer Canada seeks guidance to achieve fertilizer emissions target Fertilizer titan Pupuk Indonesia develops hydrogen/blue ammonia business India launches green hydrogen/ammonia policy, targets exports Canada AmmPower to develop green hydrogen and ammonia facility in Louisiana US DOE awards grant to project to recover rare earth elements from phosphate production Fertiglobe, Masdar, Engie to develop green hydrogen for ammonia production Czech Republic’s Spolana enhances granular AS production India’s Reliance to invest $80bn in green energy projects Yara, Sweden’s Lantmannen aim to commercialise green ammonia by 2023 Novatek and Uniper target Russia to Germany blue-ammonia supply chain Fertz giant Yara goes green with electrification of Norwegian factoryCanada Arianne Phosphate exploring use of phosphate for hydrogen technology FAO and IFA renew MoU to promote sustainable fertilizer use Sumitomo Chemical, Yara to explore clean ammonia collaboration Sri Lanka revokes ban on imports Tokyo scientists convert bioplastic into nitrogen fertilizer Aramco plans Saudi green hydrogen, ammonia project China announces action plan for carbon peaking & neutrality Saudi Aramco targets net zero emissions from operations by 2050 Fertiglobe goes green with Red Sea zero-carbon ammonia pro Australian fertilizer major Incitec Pivot teams up for green ammonia study INTERVIEW: BASF to scale up new decarbonisation tech in second half of decade – CEO India asks fertilizer companies to speed up production of nano DAP Japan's Itochu set to receive first cargo of blue ammonia for fertilizer use Norway's Yara acquires recycled fertilizers maker Ecolan Bayer Funds US start-up aims to cut nitrogen fertilizer use by 30% BP: Green ammonia production in Australia feasible, but needs huge investment Origin and MOL explore shipping green ammonia from Australia India’s IFFCO seeks to export nano urea fertilizer Sri Lanka reinstates ban on import of chemical fertilizers Nutrien to cut greenhouse gas emissions 30% by 2030 RESOURCES IFA – Fertilizers and climate change TFI – Sustainability report
Brazil’s Unigel gets green light from creditors for debt restructuring
SAO PAULO (ICIS)–Unigel has agreed a Brazilian reais (R) 3.9 billion ($791 million) debt restructuring with its creditors, which has saved the beleaguered styrenics, acrylics and fertilizer producer from filing for bankruptcy for the time being. The agreement includes raising a new $100 million credit line that will mature in 2027, and give its shareholders “economic benefits corresponding” to 50% of the company, it said. An intention to improve the company’s governance structure is also included, although Unigel did not disclose further details. The restructuring will consist of the issuance of new debt securities and participatory securities in exchange for the cancellation of current debts. One-third of Unigel’s creditors, those with earlier maturities, have agreed to the deal and will apply for 90-day protection to finalize it, which has been made possible under Brazil's financial laws. “The plan will allow the improvement of the company's capital structure, with an increase in its liquidity and a significant reduction in leverage, in order to guarantee the continuity of the business plan that was severely impacted by the crisis in the global petrochemical industry,” said Unigel’s CEO, Roberto Noronha. CFO André Gaia said the new funds will be partly directed to finalizing projects such as Unigel's sulphuric acid plant at Camacari in the state of Bahia. Construction has been on hold since 2023 when the company's financial position deteriorated. The plant is 80% complete, and when fully operational it should produce around 450,000 tonnes/year. REVIVALUnigel’s fortunes took a turn for the worse in 2023 on the back of high input costs – especially at its natural gas-intensive fertilizer operations – poor demand and low prices. It has not published a financial report since Q1 2023, something contemplated under Brazilian financial law for companies under stress. After a poor Q1, Fitch and S&P both lowered the company’s credit ratings several times and put Unigel’s debt obligations at the lowest level to indicate a high probability of default. However, “intense negotiations” with creditors that began in October, after Unigel failed to pay a coupon on one of its bonds, appeared to bear fruit in November when it reversed its decision to shut down the Bahia fertilizers plant. For that to take place, Unigel’s talks with its creditors were accompanied by talks with the government and its appointees to lead the state-owned energy major Petrobras, which supplies natural gas to Unigel. President Luiz Inacio Lula da Silva has repeatedly said that Brazil needs a stronger fertilizer industry as is too dependent on imports to cover booming demand from its growing agricultural sector. The sector has made Brazil one of the world’s breadbaskets and accounts for around a quarter of the country's output. Although details have not been made public, in December, the two companies agreed a tolling agreement for Unigel’s fertilizers plants in Camacari and Laranjeiras, in the state of Sergipe. The two plants were leased from Petrobras in 2019. Capacity at the Bahia plant is 475,000 tonnes/year for ammonia and 475,000 tonnes/year for urea. The Laranjeiras facility has a capacity of 650,000 tonnes/year of urea, 450,000 tonnes/year of ammonia, and 320,000 tonnes/year of ammonium sulphate (AS). The Petrobras-Unigel agreement in December came just weeks after Unigel charged Petrobras for its “unbearable natural gas prices” when it explained to workers at the Camacari plant about redundancies resulting from its closure. As part of the talks with its creditors, Unigel divested its Mexican subsidiary which produces acrylic sheet Plastiglas for an undisclosed amount in December. With an expected improvement in chemicals and fertilizers prices and a helping hand from Petrobras and/or the Brazilian government, Unigel may have managed to avoid a bankruptcy which many had taken for granted a few months ago. At the annual meeting of the Latin American Petrochemical and Chemical Association (APLA), held in Sao Paulo in November, one petrochemicals source foresaw this week’s events. “Unigel has been in financial trouble many times before, and it always got through them. This time looks bad, but it may yet again save the day,” the source said. Focus article by Jonathan Lopez Thumbnail shows Brazilian money. Image by RHJPhtotos.
Commercial production at Methanex's Geismar 3 in Louisiana delayed until late Q3
LONDON (ICIS)–Commercial production at Methanex's newly constructed 1.8 million tonne/year methanol plant, Geismar 3, has been delayed, potentially until the end of Q3, the Canadian producer announced. During the plant's initial start-up, there were complications with the unit's autothermal reformer (ATR). In a press release, Methanex said that following inspections, there was significant damage to a large number of supporting refractory bricks in the ATR which needed replacing. It is estimated that the total capital cost will not significantly exceed the upper end of the capital cost guidance of $1.30bn. Gesimar 3 is located in Louisiana and was originally scheduled to start up in Q4 2023. In Methanex's Q4 earnings report last month, it said the plant was in the process of starting up and was expected to reach full rates in February. The producer said, "Based on the preliminary findings of its root cause analysis, management believes that this issue relates to complications in the initial start-up process and is not a plant design or construction issue." Methanol is primarily used to produce formaldehyde, methyl tertiary butyl ether (MTBE) and acetic acid. Smaller amounts go into production of dimethyl terephthalate (DMT), methyl methacrylate (MMA), chloromethanes, methylamines, glycol methyl ethers, and fuels applications such dimethyl ether (DME), biodiesel and the direct blending into gasoline.
PODCAST: Phosphates, ammonia markets on standby due to low demand
LONDON (ICIS)–As the phosphoric acid settlement for Q1 is announced and India is eagerly awaiting further details on government subsidies, phosphates markets editor Chris Vlachopoulos and ammonia senior editor Sylvia Traganida discuss developments in their respective markets. They talk about demand, recent developments, and provide insight on the possible ways forward for both markets.
Asia petchem markets await China's demand signals after holiday
SINGAPORE (ICIS)–Asia's petrochemical markets will closely watch China's demand signals after the Lunar New Year holiday amid ongoing concerns about the country’s economic health. Asia markets eye China's post-holiday demand signals China's economic health remains central concern Prices likely to rise amid supply constraints Markets in Asia took a breather in the week of 12-16 February, with Lunar New Year holidays in China, Taiwan, Malaysia and Singapore, while countries such as South Korea, Japan and Indonesia observed public holidays as well. Market participants are cautious about the post-holiday market; while some downstream buyers will restock after the holidays, there is concern that existing inventory held by domestic China producers and distributors will largely satisfy demand until early March. PRICES LIKELY TO RISE AMID SUPPLY CONSTRAINTSPetrochemical prices in Asia are expected to continue to increase in February, supported by capacity losses from outages and run-rate reductions, according to ICIS analysts. Among the 31 major petrochemical commodities covered by the ICIS Asia Price Forecast, average February prices for at least 22 of these commodities are anticipated to increase. Ethylene (C2), butadiene (BD) and styrene butadiene rubber (SBR) are expected to lead in terms of gains. In Asia’s C2 market, end-users who have yet to settle March arrival cargo are expected to hit the ground running once most of players return to the market this week. In the southeast Asia C2 market, demand enquiries were largely heard from Thailand last week, while other end-users in Indonesia have begun to look towards the April window for spot cargo. "The Asia C2 industry is likely to be characterised by tight supply in the weeks to come," said Paolo Scafetta, ICIS senior olefins analyst. "February should see about 7% of total monthly nameplate capacity lost due to downtime unless unplanned events cause further technical hiccups." The upstream naphtha market in Asia should be influenced by a few bearish factors, Scafetta added. These include the shift from naphtha to liquefied petroleum gas (LPG) as an alternative cracking feedstock and an improvement in supply from March as naphtha cargoes are expected to increase as Middle East refineries return from their maintenance. Asia's naphtha market is likely to be plagued with volatility in the short term as tensions in the Red Sea will continue to disrupt supplies. In Asia’s propylene (C3) market, trade was largely subdued during the Lunar New Year break but picked up towards the close of the week with most market players, except China, returning from their holiday. Talks and discussions in Taiwan commenced at the end of the week after the holidays ended. However, the post-holiday buying sentiment weakened on the back of ample supply, leading sellers to progressively lower their offers and selling indications. With buyers in China largely away from the market, overall business activity during the week was muted. In southeast Asia, while demand was also heard in Malaysia and Indonesia, most buyers continued to hold back from purchases on the expectation that supply tightness might result in an easing in offers down the road. In Asia’s benzene market, post-holiday restocking is expected to pick up in the second half of February amid strong competition for April and May cargoes from global players. February and March benzene cargoes have been already sold out and April cargoes are in strong demand. Benzene buyers based in both Asia and the West had actively sought procurement since end-January, for pre-holiday and pre-summer stocking up respectively. Asia's acetone market looks poised to maintain its strength. This is due to the high prices of benzene, reduced production leading to tighter supply, and a resurgence in trading flows between Asia and the West. A significant increase in demand for Asia acetone from the US market is bolstering this trend. Limited supply in the US, a result of low phenol production and ongoing allocations, is driving this demand. Meanwhile, supply within Asia is also constrained as phenol/acetone producers scale back production in response to unprofitable margins and decreased demand for phenol in China. In the xylene markets, further support in the market will be dependent on downstream sectors after the Lunar New Year holidays, with eyes firmly on China. For paraxylene (PX), there remains optimism for gasoline-blending demand heading into the second quarter, with positive arbitrage window economics for exports to the West. Firm upstream naphtha prices have also provided some support for PX. Several market participants noted there had been pre-buying of mixed xylenes (MX) and toluene by gasoline blenders to the US. Demand and price developments in the downstream purified terephthalic acid (PTA) and polyester sectors will help provide clarity about whether high PX costs can be absorbed down the chain. Asia's butyl acetate (butac) and ethyl acetate (etac) markets are poised to stay afloat on anticipated post-holiday demand, albeit at a gradual pace. Sellers of butac in both China and the region largely maintained their spot offers for March loading prior to the Lunar New Year holiday. Spot butac prices were on a downtrend in the early part of the fourth quarter of 2023 and have climbed since December, in part driven by cost pressures upstream as suppliers worked towards mitigating compressed margins. Asia’s methylene chloride (MEC) market might be bullish after the Lunar New Year holiday, as rising demand is likely to shift the market to a more balanced state. Most buyers were in a wait-and-see mode, monitoring prices and observing what producers would offer after the Lunar New Year break, with market participants in southeast Asia eyeing a rebound in demand through Q2, around the Ramadan period. CHINA'S ECONOMIC HEALTH IN FOCUS ICIS analysts expect most of China's end-use consumption, including in industries such as agriculture and home appliances, to recover from March. The China government's Two Sessions policy meetings, widely seen as the most important political meeting of the year for the country, will be held on 4-11 March. ICIS analysts expect another series of policies to be introduced to stimulate economic growth. Further market and infrastructure investment can boost petrochemicals demand. Latest official data from China is pointing to some recovery from domestic tourism trips and revenues. Domestic tourism trips and revenues during the Lunar New Year holidays in China jumped by 34.3% and 47.3% year on year respectively, with their levels at 19.0% and 7.7% above pre-pandemic levels in 2019, data from the country’s Ministry of Culture and Tourism (MCT) shows. "Most official and private media channels have been reporting strong (or even exceptionally strong) Lunar New Year holiday consumption data, and markets risk getting caught up in the euphoria of the moment, under the supposition that China’s economy is suddenly bottoming out, driven by the Chinese people’s hidden passion for spending," research analysts from Japan's Nomura Global Markets Research said in a note. "Although we do see some strength in the data, we urge market participants to exercise caution," it said, adding that China's property sector continued its downward spiral, right before the Lunar New Year holiday, and there was no sign of a recovery during the holiday. "Despite the positive [Lunar New Year] data, we maintain our view that the ongoing economic dip is likely to worsen into the spring," Nomura said. With additional reporting by Josh Quah, Julia Tan, Seng Li Peng, Angeline Soh, Helen Lee, Keven Zhang, Melanie Wee and Samuel Wong Focus article by Nurluqman Suratman Thumbnail photo: Lunar New Year lanterns in Shenyang, northeast China's Liaoning Province, on 1 February 2021. Asia will closely watch China's demand signals after the Lunar New Year holiday amid concerns about the country’s economic health. (Source: Xinhua/Shutterstock)
Asia top stories – weekly summary
SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 16 February 2024. Singapore Jan petrochemical exports rise 8.7%, NODX up 16.8% By Nurluqman Suratman 16-Feb-24 09:55 SINGAPORE (ICIS)–Singapore’s petrochemical exports in January rose by 8.7% year on year to Singapore dollar (S$) 1.11bn ($822m), with non-oil domestic exports (NODX) posting a 16.8% growth for the month, official data showed on Friday. Asia fatty acids market faces cost pressures on strong palm oil prices By Helen Yan 15-Feb-24 13:10 SINGAPORE (ICIS)–Asia’s fatty acids market is likely to face costs pressures from recent spikes in upstream crude palm oil (CPO) prices, while demand is expected to stay tepid. PODCAST: Asia R-PE, R-PET see slow 2023; legislations, waste management to shape future By Damini Dabholkar 15-Feb-24 14:07 SINGAPORE (ICIS)–Asia recycled polymers markets were sluggish for the most part in 2023. In early 2024 too, challenges that dim the short-term outlook persist. INSIGHT: Indonesia polls raise questions over Nusantara, import curbs By Pearl Bantillo 13-Feb-24 19:27 SINGAPORE (ICIS)–Indonesia, southeast Asia’s biggest economy, will go to the polls on 14 February to elect a new president, posing uncertainties on continuity of economic policies, from import restrictions coming into effect in March to incumbent President Joko Widodo’s flagship project of building a new capital called Nusantara in Kalimantan province. Asian EPDM market quiet amid holidays; demand outlook mixed By Ai Teng Lim 13-Feb-24 17:22 SINGAPORE (ICIS)–Discussions for Asian spot imports of ethylene propylene diene-monomer (EPDM) ground to a halt this week, with much of Asia out of action on extended Lunar New Year holidays.
Asia top stories – weekly summary
SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 9 February 2024. India methanol gains on lower Iran volumes amid plant outagesBy Keven Zhang 09-Feb-24 14:38 SINGAPORE (ICIS)–Indian methanol spot market continued to be driven by supply outages in Iran, with a trade concluded higher than the previous week. INSIGHT: Asia benzene remains profitable supported by demand in 2024 By Jenny Yi 08-Feb-24 22:27 SINGAPORE (ICIS)–Asia benzene supply growth will moderate in 2024 compared with last year, which saw the the peak of the latest capacity expansion cycle. The downstream market still maintains rapid capacity growth, however, which exceeds the supply growth rate of benzene. Asia adipic acid struggles to keep up with cost pressure ahead of holidays By Josh Quah 08-Feb-24 13:44 SINGAPORE (ICIS)–Adipic acid (ADA) prices in Asia have been on a general upward trend since around mid-December 2023 for China-origin cargoes. INSIGHT: Asia ABS supply length will intensify amid China expansions By May Hu 08-Feb-24 10:00 SINGAPORE (ICIS)–ABS (acrylonitrile butadiene styrene) capacity growth in Asia peaked in 2023 and will be sustained in 2024 on massive new capacities coming on stream in China. China petrochemical demand may stay muted post-holiday By Yvonne Shi 07-Feb-24 15:09 SINGAPORE (ICIS)–Low market confidence has kept petrochemical restocking in China tepid before the Lunar New Year holiday, with players refraining from building up inventory given uncertain demand recovery in March. China Jan petrochemical markets gain on restocking; Feb holidays to hit demand By Yvonne Shi 06-Feb-24 14:58 SINGAPORE(ICIS)–China’s domestic petrochemical markets gained in end-January on the back firm crude prices and some restocking ahead of the Lunar New Year holiday, with demand in February likely to weaken. Asia titanium dioxide spot market may be fuelled by bullish sentiment By Joson Ng 05-Feb-24 16:56 SINGAPORE (ICIS)–The titanium dioxide (TiO2) spot market in Asia is likely to see supply factors driving the market in February. India hikes infrastructure capex for fourth year; Rs11.1tr set for 2024-25 By Priya Jestin 05-Feb-24 14:49 MUMBAI (ICIS)–India’s government has announced plans to increase its capital expenditure on infrastructure projects to rupees (Rs) 11.1trn ($134bn) in its interim budget for 2024-2025, up 11% from the previous fiscal year, boosting the funds available for the sector for the fourth consecutive year.
INEOS Aromatics closes one of two PX units at Texas City, Texas site
HOUSTON (ICIS)–INEOS Aromatics has closed one of its two paraxylene (PX) units at its Texas City, Texas site, according to a company spokesperson. The Texas City site houses two PX units, which are both capable of producing a total of 925,000 tonnes per year, according to an INEOS Investor Day presentation. This accounts for close to 30% of total North American PX capacity. Demand for PX has been lackluster since the beginning of Q3 last year, as downstream polyethylene terephthalate (PET) and purified terephthalic acid (PTA) demand fell following peak bottled beverage season during the summer months. Additionally, imports of PX surged in Q3 as price margins widened between domestic PX and Asia PX, as Asia PX prices dropped, incentivizing players to purchase more imported material. PX is predominantly used as a feedstock to produce PTA. Other outlets include dimethyl terephthalate (DMT), di-paraxylene, herbicides and solvents. Both PTA and DMT are used to make PET. Around 98% of PX is used to produce polyester via PTA or DMT. DMT is also used to manufacture polybutylene terephthalate (PBT) resin. Major producers of US PX are ExxonMobil, Flint Hills Resources, Indorama and INEOS Aromatics. Thumbnail shows bottles made with PET, which is produced with PX. Image by Shutterstock.
India’s Coromandel to expand phosphoric, sulphuric acid production
MUMBAI (ICIS)–India’s Coromandel International Ltd (CIL) plans to increase the phosphoric acid and sulphuric acid capacities at its Kakinada complex in the southeastern Andhra Pradesh state at a cost of rupees (Rs) 10.3bn ($124m). The company plans to increase its phosphoric acid capacity by 48% to 2,300 tonnes/day and its sulphuric acid capacity by 43% to 6,000 tonnes/day, it said in a filing to the Bombay Stock Exchange on 30 January. Coromandel expects to complete this expansion project within 24 months and will finance the project through internal accruals and loans, it added. Separately. Coromandel’s fertilizers facility at Ennore in the southern Tamil Nadu state remained shut following an ammonia leak in December 2023, a company source said on Tuesday. The gas leak from the company’s ammonia unloading subsea pipeline on 26 December led to the hospitalisation of 52 people from nearby villages. A technical committee constituted by the Tamil Nadu state government has ascertained that the ammonia pipeline may have been damaged due to a significant relocation of heavy granite boulders when Cyclone Michaung hit the Tamil Nadu coast on 3 December. In its report on 5 February 2024, the committee has asked Coromandel to replace the offshore pipelines and install state-of-the-art monitoring, automatic control and accident prevention systems. The company will also have to pay an environmental compensation of Rs59.2m to the Tamil Nadu Pollution Control Board (TNPCB). “Following the unfortunate incident of ammonia gas leakage at the Ennore fertiliser facility, the company has taken necessary measures to ensure safety of people in and around the complex. Currently the plant is closed and the company is in the process of addressing the matter,” the company official said. Coromandel operates 16 manufacturing facilities with a total capacity of 4.5m tonnes/year of fertilisers, according to its website. ($1= Rs83.05)
Asia top stories – weekly summary
SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 2 February 2024: Asia R-PE spot market mood bolstered by PE price hikes By Arianne Perez 02-Feb-24 12:11 SINGAPORE (ICIS)–Buying appetite for recycled polyethylene (R-PE) in Asia has been significantly diminished due to inflationary pressures, along with the recent spikes in shipping costs. Snug supply props up Asia MEG; discussions to wane as holiday nears By Judith Wang 02-Feb-24 14:08 SINGAPORE (ICIS)–Snug supply has pushed up Asia’s monoethylene glycol (MEG) prices to the peak so far in 2024, but spot discussions are expected to wane in the coming week ahead of the Lunar New Year holiday. Cold snap disrupts China’s chemical freight market By Hwee Hwee Tan 01-Feb-24 13:05 SINGAPORE (ICIS)–An unusually frigid winter weather has been holding up China’s port operations, tightening tanker supply and pushing up chemical freight costs into February. INSIGHT: Asia PX-PTA-polyester chain margins expected to remain concentrated in the upstream in 2024 By Jimmy Zhang 01-Feb-24 22:54 SINGAPORE (ICIS)–Paraxylene capacity in Asia expanded at a compounded average rate of 11.6% from 2018 to 2023, ICIS data show, However, across the PX-purified terephthalic acid (PTA)- polyester value chain margins remained focused on the upstream. That focus for profitability is expected to continue in 2024. Asia ethylene sees headwinds amid curbed arbitrage, greater competition By Josh Quah 31-Jan-24 12:55 SINGAPORE (ICIS)–On the surface, Asia’s ethylene (C2) markets have looked to draw strength from pre-Chinese New Year restocking. Major producer diverts acetic acid, VAM supply to Europe from Asia By Hwee Hwee Tan 30-Jan-24 14:19 SINGAPORE (ICIS)–A major producer has decided to prioritise exports of acetic acid and vinyl acetate monomer (VAM) to Europe as the Red Sea crisis piled delays on inbound shipments, tightening supplies in Asia through to February. INSIGHT: NE Asia C3 braces for weak demand, SE Asia support likely in short term By Julia Tan 29-Jan-24 13:00 SINGAPORE (ICIS)–The average weekly price for spot propylene (C3) imports in northeast Asia continued to climb last week on restocking demand ahead of the Lunar New Year holidays and on recent gains in the southeast Asian spot markets. Asia naphtha bullish on supply crunch despite weak petrochemical margins By Li Peng Seng 29-Jan-24 09:33 SINGAPORE (ICIS)–Asia’s naphtha prompt supplies are expected to stay tight as unrest at the Red Sea and Black Sea regions will continue to affect supply flows.
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