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General Motors, China’s BYD to invest over $2.0bn in EVs at Brazilian facilities
SAO PAULO (ICIS)–General Motors is to invest Brazilian reais (R) 7.0bn ($1.4bn) in 2024-2028 at its facilities in the country to implement a “complete renewal” of its vehicle portfolio focusing on production of electric vehicles (EVs), the US automotive major said this week. Meanwhile, China’s EV major BYD also announced this week it would invest R3.0bn at its facilities in Camacari, in the state of Bahia. The company purchased the plant from Ford in 2023. The Brazilian government approved at the end of 2023 the so-called Mover program, which envisages tax breaks and incentives for greener mobility. Both GM and BYD’s announcements were made after weeks of talks with the government, although details of the agreements signed have not yet been made public. The automotive boost this week will have been music to the ears of both automotive executives in Brazil and the government presided by Luiz Inacio Lula da Silva, in office since January 2023. For the former, the announcements could be a catalyst for further growth in EVs, a sector in which Brazilian producers are lagging versus other big producing countries. In the past decade, those executives have presided over a sharp fall in output, down the peak of nearly 3.5m units/year in the early 2010s to just over 2.3m units produced in 2023. Brazil’s automotive exporting prowess to the rest of Latin America has dwindled on the back of fierce competition from overseas producers, mainly Chinese. For the government, the announcements will be a relief after the Lula Administration has struggled to show any sign of a revival in manufacturing, a key promise to its core electorate. Manufacturing stayed in contraction territory for most of 2023. President Luiz Inacio Lula da Silva made sure this week to capitalize on both announcements, which were made in Brasilia’s Planalto presidential palace. Earlier in the week, he also presented a 10-year industrial policy plan envisaging incentives for green investments to the tune of R300bn. The Mover program is part of that plan. TURNAROUNDIn GM’s case, the announcement this week is a remarkable turn of events after the company and some of its workers in Brazil were involved in a legal dispute after GM implemented 1,200 redundancies without prior consultation with trade unions. A judge disregarded the redundancies and ordered GM to rehire all workers. GM is a key automotive producer in Brazil. The company operates three production facilities in the state of Sao Paulo: Sao Jose de Campos, Sao Caetano do Sul, and Mogi das Cruzes. The company said the investments would also include research and development (R&D) of “innovative and customized” products for the Brazilian market as well as the “creation of new” businesses. “The factories will also receive developments that will make them even more modern, agile, and sustainable,” said GM. A large part of Brazil’s current vehicle fleet can also run on biodiesel, an element which has greatly helped reduced the country’s emissions from the transport sector but has also made producers rest in their laurels in terms of EV production. “Brazil is strategic for GM’s global business expansion plan. In addition to being a vehicle export hub for South America, it has a large engineering development center and is a market with high growth potential with a vocation for new technology vehicles, in line with the predominantly clean energy matrix of the country,” said Shilpan Amin, president of GM International. The official announcement from GM did not mention EVs but used the wording “sustainable mobility” instead. However, in the ceremony where the investments were announced GM’s vice president for South America, Fabio Rua, said: “Our investments in Brazil are focused on sustainability. Our future is all electric,” as quoted by Bloomberg. The automotive industry is a major global consumer of petrochemicals, and chemicals make up more than one-third of the raw material costs for an average vehicle. The automotive sector drives demand for chemicals such as polypropylene (PP), along with nylon, polystyrene (PS), styrene butadiene rubber (SBR), polyurethane (PU), methyl methacrylate (MMA) and polymethyl methacrylate (PMMA), among others. ($1 = R4.91) Focus article by Jonathan Lopez
TOPIC PAGE: War in Ukraine, gas crisis
Note: this page is no longer updated and is held on the ICIS archive. Russia’s invasion of Ukraine led to an unprecedented energy crisis in 2022. Russian producer Gazprom slashed natural gas exports to Europe by 90%, expecting to deflect western military and political support for Ukraine. The war thus led to record natural gas prices around the world, as Europe scrambled to secure alternative volumes. These higher costs also had a major impact in other key areas such as fertilizers and petrochemicals. Although prices have since retracted, the damage remains, shown by sluggish demand levels, while the outlook is equally subdued – and not just in Europe. The World Bank has again revised down its global GDP forecast, to 2.4%, warning that the past five years will have seen the slowest half-decade of growth for 30 years. 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 since then. GAS SUMMARY Gas storage remains robust in Europe ahead of winter 2023 Poor downstream demand still affecting industrial production, gas demand Record shipments of liquefied natural gas (LNG) to Europe so far in 2023 LNG plus Norwegian, Algerian, Azerbaijani pipeline imports compensate for Russian supply shortfall Europe LNG processing operating at full capacity Nord Stream I and II pipelines damaged by explosions, zero flows to Europe EU implements voluntary 15% cut to consumption 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 From 5 December Russian crude oil cargoes only be insured if subject to price cap CHEMICALS SUMMARY Millions of tonnes of capacity remain offline despite gas cost collapse Elevated oil, gas prices dent consumer confidence and demand Prospect of recession, more cheap imports from Asia Margins, prices under pressure due to collapsed downstream demand 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. How vulnerable are energy and energy-related Russian supplies to disruptions? Europe has historically depended 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 further reduced in 2022. By the end of last year Russian pipeline supplies fell to less than 10% of Europe's total gas imports compared to 40% in the previous year. Russian volumes shipped through Ukraine to Europe are now at third of what they should be as part of a five-year transit agreement Russia has banned exports of gas to several EU countries, and the Nord Stream I and II pipelines have been damaged. In 2022 flows via Yamal and Nord Stream 1 stopped completely. European petrochemicals players faced even higher gas prices as a result, though these have since collapsed to pre-war levels, though still above long-term averages. Fertilizer companies – where gas can account for 80% of costs – have been forced to curtail production. Chemicals were 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. Sanctions have been imposed on imports of Russian crude oil and products by sea, but the ban does not include pipeline oil. 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. SInce the ban came into place, Russia has successfully switched exports mainly to China and India, though priced at a steep doscount. CHEMICALS IMPACT Gas and electricity are important components in the production costs of many chemicals. Surging gas and feedstock prices in Europe have caused margins to drop because producers are often unable to push these costs through to downstream customers. Now millions of tonnes of fertilizer and chemical capacity are offline in Europe. ICIS has also created an interactive timeline which shows the history of the gas impact since July 2021. These products have been most badly affected by outages in Europe, with more than half of capacity offline or running at reduced rates in some cases. Analysis by the ICIS Margin Analytics team shows the products which are most exposed to energy and gas prices in Europe as a feedstock or utility. 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. Collapsed demand means that millions of tonnes of European chemicals capacity remains offline despite much lower gas costs. 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? Europe prepared for a difficult winter although rising storage fullness levels, falling demand and more import capacity for liquefied natural gas (LNG) have helped it get by, assuming there will not be an extensive cold spell. As of 11 October, storage facilities across Europe were 97% full compared with 88% the same time last year. Altogether another 157bn cubic meters/year of regasification capacity is due to be added by the end of the decade, increasing Europe's capacity by one third from pre-war levels. Most of it should be ready by next year or 2025/26. The capacity includes offshore terminals in the Netherlands, Germany and Estonia/Finland. Demand has been decreasing by more than 20% in the industrial sector in north-west European countries and by 20-30% for households in Germany, according to official data. Nevertheless, there is a possibility that Russia may completely stop its gas supplies to Europe via the last two remaining routes – Ukraine and Turkey, which could lop off some 70 cubic meters of Russian gas entering Europe daily. In such a scenario, the most affected countries would be those in eastern and central Europe, which are landlocked and have been struggling to secure regasified LNG from importing countries. 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 if the region experiences a cold snap in the weather. 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. 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 had forced consumers to limit or stop production or seek import substitution globally. The mild winter has alleviated this situation. 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. 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. LATEST HEADLINES INSIGHT: Top five risks for energy, petrochemicals and fertilizers in 2024: an Insight series By Aura Sabadus 26-Jan-24 00:39 LONDON (ICIS)–A wide range of threats to the global economy have been highlighted by international financial institutions, ranging from housing bubble busts and banking failures to extreme weather and cost-of-living crises. German chem labour union calls for 'massive' investments to reverse decline By Stefan Baumgarten 24-Jan-24 23:11 LONDON (ICIS)–Germany’s chemical and energy labour union IGBCE is calling for a "massive" investment package to reverse the decline in Europe’s largest economy. INSIGHT: Chemical M&A sets up for rebound in 2024 as deal backlog bursts at seams By Joseph Chang 18-Jan-24 04:57 NEW YORK (ICIS)–Following a horrendous 2023 with deal activity stymied by massive inventory destocking, weak demand, rising interest rates and tight capital markets, global chemical mergers and acquisitions (M&A) are setting up for a rebound in 2024. However, the magnitude of any recovery is still very much in question. OUTLOOK ’24: Naphtha, gasoline brace for ‘uncharted territory’ as crude enters another tumultuous year By Shruti Salwan 05-Jan-24 22:00 LONDON (ICIS)–The fate of the European naphtha and gasoline markets is likely to be determined by crude oil volatility in 2024, with a sharp shift in upstream prices and a flattening downstream demand curve to mount pressure upon refiners. OUTLOOK ’24 Uncertainty looms over Europe feedstocks By Cassandra Abolaji 05-Jan-24 20:00 LONDON (ICIS)–Liquefied petroleum gas (LPG) demand is expected to pick up in Q1 as long as weather conditions remain steady. JANUARY CRUDE OUTLOOK: Prices could ease this month on global demand concerns By Eloise Radley 05-Jan-24 15:30 LONDON (ICIS)-Although shipping and supply worries have gripped the market in recent weeks, crude prices are likely to be subdued for the first month of 2024 as focus remains on weak demand. Strong economic headwinds in China, the US and the Eurozone are likely to raise fears of lower oil consumption in January. OUTLOOK '24: Europe capro, CX markets cautiously eye incremental improvement By Fergus Jensen 03-Jan-24 18:30 LONDON (ICIS)–After a year of contracting demand, Europe’s cyclohexane (CX) and caprolactam (capro) markets remain cautious, and beyond immediate disruptions they may see only marginal consumption gains in 2024 amid expectations of ongoing challenges in consuming industries. Coal closures to increase gas influence on German power By Calum Andrews 14-Dec-23 19:19 LONDON (ICIS)–Significant reductions in hard-coal capacity through 2024 could increase the influence of gas prices on the German power market, traders told ICIS. German clean dark spreads crash on power availability By Rian Flanagan 14-Dec-23 01:15 LONDON (ICIS)– German clean dark spreads move further out of the money after continued losses in the power market, pressured by strong fossil-fuel power plants and French nuclear availability. Free energy markets: Still fit for purpose? – Part 3 By Aura Sabadus 13-Dec-23 22:43 The deregulation of electricity and gas markets created the biggest transfer of wealth in history and enabled the efficient allocation to resources. However, the energy crisis of 2022 and the risks emerging from the green transition are raising questions whether the model is still fit for purpose. In this five-part series, Gretchen Ransow and Aura Sabadus analyse the ability of free energy markets to respond to three challenges: security of supply, security of infrastructure and security of price. LONDON (ICIS)– If the security of energy supplies is defined as the availability of energy in various forms in sufficient quantities, the security of infrastructure is described as the provision and protection of critical systems or assets needed to guarantee their delivery. PODCAST: Capacity equal to Europe’s entire 2023 ethylene demand could close by 2028 By Will Beacham 13-Dec-23 18:56 BARCELONA (ICIS)–As waves of new cracker projects come on stream first in China and then the Middle East, low demand growth means 18m tonnes of existing capacity could have to close by 2028 to maintain operating rates and margins. INSIGHT: Global petrochemicals market in a decade of unprecedented oversupply By James Wilson 12-Dec-23 23:14 LONDON (ICIS)–The global petrochemicals market is currently in a difficult moment with oversupply driving utilisation rates and margins for chemicals producers to hit record lows. CDI Economic Summary: US soft landing more likely as inflation eases By Joseph Chang 07-Dec-23 00:10 NEW YORK (ICIS)–What a difference a year makes! Last year around this time, there was nearly unanimous consensus among economists that the US was barreling into a recession. Today, less than half see such an outcome. GPCA'23: 2024 global PP/PE demand pick-up expected to be delayed By Nadim Salamoun 06-Dec-23 23:33 DOHA (ICIS)–Discussions about the polypropylene (PP) and polyethylene (PE) markets at the 17th Annual Gulf Petrochemicals and Chemicals Association (GPCA) Forum in Doha centred on the pick-up of global demand in 2024. INSIGHT: Consolidation, new leaders to revive European competitiveness – LANXESS CEO By Joseph Chang 05-Dec-23 00:34 NEW YORK (ICIS)–Consolidation will be critical to reviving a stagnant European chemical industry to make it more competitive, and as a result, new leaders will emerge in specialty chemicals, said the CEO of Germany-based LANXESS. IPEX: Global spot index drops as soft demand, lower feedstock costs drive prices down By Miguel Rodriguez Fernandez 04-Dec-23 20:08 LONDON (ICIS)–The global spot ICIS Petrochemical Index (IPEX) fell for the fourth consecutive week as softer upstream costs and subdued underlying demand keep pushing chemical prices down across all regions. Japan factory activity contracts anew; Nov PMI falls to 48.3 By Pearl Bantillo 01-Dec-23 13:50 SINGAPORE (ICIS)–Japan’s manufacturing activity shrank in November, registering a purchasing managers’ index (PMI) reading of below 50 for the sixth straight month, as output and new orders declined. Japan's Mitsui Chemicals restructuring continues amid Asia oversupply By Nurluqman Suratman 30-Nov-23 12:27 SINGAPORE (ICIS)–Japan’s Mitsui Chemicals is considering downsizing its domestic phenols business, as well as optimize domestic cracker and polyolefin operations, as part of its business restructuring, to transition into a specialty chemicals producer by the end of the decade. PODCAST: Butanediol markets in Asia and Europe to usher in 2024 with soft demand By Yashas Mudumbai 30-Nov-23 20:50 LONDON (ICIS)–The Asian and European butanediol (BDO) markets have struggled with poor demand across downstream sectors in 2023. Market players remain uncertain because there is little sign of the tide turning given current global economic conditions and new plant capacities in China. Japan's Mitsui Chemicals restructuring continues amid Asia oversupply By Nurluqman Suratman 30-Nov-23 12:27 SINGAPORE (ICIS)–Japan’s Mitsui Chemicals is considering downsizing its domestic phenols business, as well as optimize domestic cracker and polyolefin operations, as part of its business restructuring, to transition into a specialty chemicals producer by the end of the decade. UK power December outlook mixed amid weather risks By Anna Coulson 29-Nov-23 02:00 LONDON (ICIS)— A mixed outlook is expected for UK power prices with delivery in December with potential for a bullish start to the month, likely to then transition to a bearish second half. Difficult conditions to persist with ‘highly challenged’ Europe, ‘painfully slow’ China recovery – LyondellBasell CFO By Joseph Chang 29-Nov-23 01:20 NEW YORK (ICIS)–Challenging market conditions for petrochemicals and plastics are expected to last through the end of this year and likely into H1 2024, the CFO of LyondellBasell said. IPEX: Global spot index continues to fall as NW Europe declines By Miguel Rodriguez Fernandez 27-Nov-23 21:07 LONDON (ICIS)–The global spot ICIS Petrochemical Index (IPEX) dropped for the third week in a row as northwest European prices went down, counteracting a slight increase in northeast Asia and the US Gulf. INSIGHT: China likely to end property slump in H2 2024 By Fanny Zhang 27-Nov-23 19:15 SINGAPORE (ICIS)–China’s ailing property sector is expected to see a turning point in the second half of 2024 when reduced supply meets returning demand. UK Q1 energy price cap rises quarterly, drops year on yearBy Anna Coulson 23-Nov-23 20:50 LONDON (ICIS)–The UK energy price cap for January-March increased quarter on quarter, energy regulator Ofgem said on 23 November, but has fallen year on year in line with lower wholesale gas and power prices. Oil prices fall more than $1/bbl after OPEC+ delays meeting By Nurluqman Suratman 23-Nov-23 10:37 SINGAPORE (ICIS)–Oil prices fell by more than $1/bbl on Thursday, extending losses in the previous session after OPEC and its allies delayed a meeting to discuss whether to expand oil output cuts. ExxonMobil to significantly scale up plastics recycling business – president By Joseph Chang 22-Nov-23 23:31 HOUSTON (ICIS)–ExxonMobil is planning major investments and partnerships to become a leader in plastics recycling, said the head of its chemicals and refining business. Poor demand constrains Asia petrochemical production; further output cuts likely By Nurluqman Suratman 21-Nov-23 12:15 SINGAPORE (ICIS)–Operating rates at petrochemical plants in Asia will remain constrained, with further production cuts likely amid weak margins due to high costs, oversupply, and poor downstream demand. INSIGHT: Asia petchem prices expected to trend down through traditional November lull By Jimmy Zhang 20-Nov-23 22:00 SINGAPORE (ICIS)–Asia petrochemical prices are expected to move downward in November mainly due to the traditional low demand season. UK government to boost offshore wind support by 66% By Anna Coulson 17-Nov-23 02:29 LONDON (ICIS)–The UK government increased the maximum strike price available to new offshore wind projects by 66% it announced on 16 November, as it seeks to support development in a sector facing huge cost rises. Russia's EU gas market share: A battle on four fronts – LNG By Rob Dalton 17-Nov-23 01:44 Russia’s European market share may be further reduced if the Ukrainian gas transit contract is not renewed after 2024 and its LNG exports are sanctioned. While most central and western European buyers may be able to replace missing imports, Russia’s ability to retain and even regain some of the lost share will depend on four pivotal decisions, as Rob Dalton and Aura Sabadus explain in this six-part analysis. APLA '23: Petchems to get worse before it gets better on geopolitics, China exports – Arkema exec By Jonathan Lopez 14-Nov-23 01:10 SAO PAULO (ICIS)–The global downturn in petrochemicals may still need to reach a bottom as new geopolitical tensions add pressure to energy and feedstocks supplies, an executive at France’s chemicals major Arkema said on Monday. UK government considers shifting chems regulation plans to cut costs By Tom Brown 10-Nov-23 00:50 LONDON (ICIS)–The UK government is considering a rethink of its post-Brexit chemicals regulatory framework, focused around reducing the financial impact of the legislation and potentially stepping away from the goal of replicating the datasets held in the EU under the Reach system. INSIGHT: Companies focus further on costs as weak demand persists By Nigel Davis 09-Nov-23 00:35 LONDON (ICIS)–Weak demand is embedded in the supply chain making it extremely difficult this quarter to have any forward visibility for the start of next year. INSIGHT: Fourth quarter prices and margins under pressure against weak economic backdrop By Nigel Davis 07-Nov-23 00:50 LONDON (ICIS)–Petrochemical and polymer producers continue to balance output to demand, and costs to output, as well as they can. Operating rates remain depressed globally, and acutely so in Europe. And while there may be some stirrings in product supply chains, close inventory management keeps a lid on potential demand growth. Chevron to announce East Med assets “concept development process” in 2024By Clare Pennington 03-Nov-23 11:52 LONDON (ICIS)–US-based Chevron said it will select a concept for how to further develop its Eastern Mediterranean assets by the first quarter of 2024, according to a company spokesperson. Europe blending demand for ethanol, toluene and MX mixed By Zubair Adam 02-Nov-23 20:49 LONDON (ICIS)–Consumption in Europe for gasoline blending agents are mixed for ethanol versus aromatics products toluene and mixed xylenes. Power losses weigh on German coal and gas profits By Anna Coulson 02-Nov-23 00:44 LONDON (ICIS)– Decreasing power prices saw German clean dark and clean spark spreads fall further out of the money over the last seven days, with the rolling front-month clean dark spread seeing the greatest week-on-week loss. Polish and Ukrainian TSOs look into incremental gas capacity project By Irina Breilean 02-Nov-23 00:37 LONDON (ICIS)–Polish and Ukrainian transmission system operators (TSOs) Gaz-System and Gas Transmission System Operator Of Ukraine (GTSOU) have launched on 1 November a public consultation on a project to increment the gas interconnection between the two countries. Ukraine prepared for winter but Russian missile attacks still a risk By Aura Sabadus 01-Nov-23 01:15 LONDON (ICIS)–Ukraine has stocked up on coal and gas resources for winter but increased Russian missile attacks and an extensive cold weather could leave it struggling to cover the deficit. Shell exits Pakistan via sale of entire SPL stake to Saudi Wafi Energy By Pearl Bantillo 01-Nov-23 15:01 SINGAPORE (ICIS)–Shell will sell its 77.4% stake in a listed subsidiary company in Pakistan to Saudi Arabia’s Wafi Energy for an undisclosed amount, marking the Anglo-Dutch energy giant’s exit from the south Asian country by late next year. INSIGHT: Divergent trends in Asia olefins supply and demand balances for 2024 By Amy Yu 27-Oct-23 18:29 SINGAPORE(ICIS)–The supply and demand balance for the ethylene market in Asia will be improved in 2024, but the propylene imbalance will worsen current data show. CDI Economic Summary: US continues to show resilience on healthy consumer spending By Joseph Chang 26-Oct-23 05:16 CHARLOTTE, North Carolina (ICIS)–Despite softening consumer confidence, the US economy continues to roll along, driven largely by a healthy services sector and resilient consumer spending – a disconnect between sentiment and reality. High prices to limit European gas-fired generation in Q1 2024 By Rob Dalton 25-Oct-23 22:44 LONDON (ICIS)–Recent gains across European gas prices has pushed gas-fired power generators well out of the money for the first quarter of 2024, while clean dark spreads indicate increasing profitability for coal-fired generators. INSIGHT: More gas price volatility in 2023/4 as geopolitics spreads panic amid tight supply By Will Beacham 24-Oct-23 19:00 BARCELONA (ICIS)–European natural gas prices are likely to become even more volatile amid increasing geo-political instability and tight global liquefied natural gas (LNG) supply. Oil jumps more than $2/bbl as Middle East tensions heighten By Nurluqman Suratman 18-Oct-23 05:08 SINGAPORE (ICIS)–Oil prices jumped by more than $2/bbl on Wednesday after tensions escalated in the Middle East amid the Israel-Hamas conflict following a blast at a hospital in Gaza that killed at least 500 people. Following the blast, leaders of Jordan and Egypt cancelled a summit with US President Joe Biden, who is travelling to Israel as part of efforts to prevent the conflict from widening. Middle Eastern producers sign new LNG supply deals By Kintan Andanari 18-Oct-23 20:54 SINGAPORE (ICIS)–Middle Eastern producers QatarEnergy and ADNOC Gas announced separate LNG supply deals on 18 October, continuing a long line of contracts signed by Middle Eastern companies over the past year. QatarEnergy signed two long-term LNG sale and purchase agreements (SPAs) with Shell to supply up to 3.5m tonnes of LNG annually for 27 years from Qatar to the Netherlands, according to an 18 October QatarEnergy press statement .Meanwhile, ADNOC Gas signed a multi-year agreement with energy trader JERA Global Markets (JERA GM), a subsidiary of Japan’s largest power utility JERA Co Inc, ADNOC gas said in a statement . Details of the agreement’s tenure, volume and pricing were not immediately available. This represents the third long-term contract QatarEnergy signed for delivery to Europe with portfolio players over the past year, as the continent seeks to secure long-term LNG supply to replace Russian gas following the outbreak of the Russia-Ukraine war. IPEX: Global spot index maintains downward trend as NE Asia, NW Europe decline By Yashas Mudumbai 16-Oct-23 10:21 LONDON (ICIS)–The global spot weekly ICIS Petrochemical Index (IPEX) remained on a downward trend in the week to 13 October, despite higher crude prices following an escalation of the Middle East conflict and fears about its impact on supply. The spot IPEX index for northeast Asia was down 1.7% in the week, dragged lower by tepid demand following the Golden Week holiday in China and hit by weaker paraxylene (PX), styrene and polyethylene (PE) values. Ukraine energy sector prepares for more military strikes this winter By Aura Sabadus 12-Oct-23 21:44 LONDON (ICIS)–The Ukrainian energy sector is prepared for winter despite the risk of new Russian attacks, the largest private power producer DTEK said in a statement on 12 October. The company, which generates around a quarter of Ukraine’s electricity capacity, said it had completed repairs on 16 thermal power units, doubled coal investments, tripled the pace of gas drilling and developed 114MW of hard-to-hit wind generating capacity 100km away from the frontline. It has spent $107m to repair thermal power plants and reconnected two moth-balled power units to provide an extra 500MW of capacity, it added. Ukraine’s electricity generation and transmission infrastructure has been heavily targeted in Russian attacks since the start of the war in February 2022. Chemicals stuck between low demand, volatile energy – UBS By Joseph Chang 10-Oct-23 05:23 NEW YORK (ICIS)–The chemical sector is expected to continue through a rough patch with weak volumes and volatile energy and feedstock costs through the end of the year, an analyst with investment bank UBS said. “Once again, volumes are generally weaker than anticipated, in spite of low expectations during the last earnings cycle,” said UBS analyst Joshua Spector in a research note, citing slower China demand and weaker Europe and US construction activity. “Uncertainty around end demand is again compounded by volatile energy prices, this time the quick move up in oil from mid-year, leaving chemicals firms stuck between weaker demand and shifting spreads,” he added. UK chemicals pessimistic as sector battered by higher costs, cheap imports and collapsed demand By Will Beacham 09-Oct-23 19:23 BARCELONA (ICIS)–The latest survey of UK Chemical Industries Association (CIA) members reveals that the majority expect sales, production and operating rates to be flat or fall in Q4 2023 and 2024. The CIA’s Q3 Business Survey of 50 member companies says 86% of companies expect their sales to remain the same or reduce while 57% report lower production levels and capacity utilisation. Domestic demand remains low with only 4% of businesses reporting an increase in local sales. The UK chemical industry has been battered on all sides, with the cost of living crisis causing demand to collapse as consumers focus on the basics and shy away from big ticket purchases. This has particularly impacted the construction and automotive sector. China’s petrochemical market falls after surges in September, sentiment weak By Yvonne Shi 09-Oct-23 17:41 SINGAPORE (ICIS)–China's petrochemical market strengthened in H1 September, driven mainly by policy implementations, but as procurement and pre-holiday stocking gradually came to an end, the market saw less transactions and an increasingly cautious outlook. By end-September, the ICIS China Petrochemical Price Index (IPEX) rose slightly by 0.82% from the end-August, closing at 1,296.73. In late August and early September, China introduced a series of policies to boost the property market and consumption. The petrochemical futures market saw significant gains, which led to some recovery in the spot market. An increase in purchasing was attributed to seasonal demand, with more lower-price transactions seen. INSIGHT: Global economic slowdown at hand By Kevin Swift 03-Oct-23 00:39 Charlotte, NORTH CAROLINA (ICIS)–The years since the emergence of COVID-19 have been unusual to say the least, and old rules of thumb about economic cycles have evolved. The past year and a half have been especially challenging for business forecasters. There has been war in Europe along with energy disruptions (and price shock), geopolitical tensions in east Asia, worldwide inflation and tightening monetary policy by central banks. There have been recession calls by a number of prominent pundits but in the US, but a recession has yet to develop. Chemical companies have faced volatile raw material and selling prices, and demand has slumped in many markets. Earnings have suffered for many firms. INSIGHT: EU industry policy will support future low-carbon chemical industry By Nigel Davis 05-Oct-23 22:57 LONDON (ICIS)–The chemical industry often feels sidelined when, as the supplier of materials and potentially lower carbon solutions for industry and commerce, it thinks it should be at the centre in the debate about Europe’s industrial future. Yet, that perception is not necessarily correct. The EU is driving hard towards net zero encouraging delivery on its climate pledges. The European Commission has agreed the Transition Pathway for chemicals and is looking for solutions to many aspects of the move towards greater materials circularity and for the energy transition. The EU likes to incentivise investment and encourage climate change developments by regulation. Yet the adoption in the US last year of the Inflation Reduction Act (IRA) provided a wake up call and highlighted how a different approach might accelerate climate action. INSIGHT: Sustaining European assets in higher cost, low-carbon environment By Nigel Davis 02-Oct-23 22:50 LONDON (ICIS)–Companies across the value chain are accelerating towards decarbonisation trying to avoid the consequences that bumps in the road might bring but mindful of the destination. At the European Petrochemical Association (EPCA) meeting in Vienna last week it was clear that corporate carbon reduction pledges to wider society and the financial markets have a widespread impact, as producers, sellers and buyers of petrochemicals look to achieve targets on a regional as well as a global basis. UK power winter supply margins adequate – system operator By Calum Andrews 28-Sep-23 23:04 LONDON (ICIS)–The UK should be able to maintain adequate supply margins through Winter 2023, according to an outlook released by grid operator National Grid on 28 September. EPCA ’23: Europe petchem markets in trough, no upturn expected for 2024 By Katherine Sale 27-Sep-23 21:17 VIENNA (ICIS)–The European petrochemical markets are in a trough, with no demand upturn expected for 2024. High stocks, low demand to shield Europe’s winter gas supply margins By Rob Dalton 27-Sep-23 20:12 LONDON (ICIS)–After weathering the global energy crisis last year, the European gas markets’ outlook for winter 2023-2024 has significantly improved amid high gas storage levels and subdued demand. EPCA '23 INSIGHT: Europe petrochemicals face another tough year By Will Beacham 25-Sep-23 16:41 BARCELONA (ICIS)–Europe’s beleaguered petrochemical sector continues to be battered by persistent low demand, global overcapacity and cheap imports from China which are all contributing to poor margins. Germany producer prices fall by a record 12.6% By Stefan Baumgarten 21-Sep-23 02:58 LONDON (ICIS)–Producer prices in Germany fell 12.6% year on year in August, marking the biggest year-on-year decline since 1949, when collection of the data began. UK inflation edges down in August despite higher fuel prices By Morgan Condon 20-Sep-23 20:30 LONDON (ICIS)–UK annual inflation slowed for the third consecutive month in August, according to the latest data from the Office for National Statistics (ONS) on Wednesday. The Consumer Prices Index (CPI) was recorded at 6.7%, down from 6.8% in July, driven by softening inflation for food prices. Further contraction was offset by rising prices for motor fuels. Oil prices hit highest since Nov ‘22 on China recovery hopesBy Nurluqman Suratman 15-Sep-23 12:11 SINGAPORE (ICIS)–Upbeat August data on China’s industrial production and consumer spending accompanied by cuts in banks’ reserve requirement on Friday sent crude prices soaring to their highest level since November 2022. INSIGHT: Lummus, Clariant enhance PDH tech amid tougher propylene market By Al Greenwood14-Sep-23 23:15 HOUSTON (ICIS)–The enhancements that Lummus Technology and catalyst producer Clariant have made to the CATOFIN propane dehydrogenation (PDH) technology will compete not just with the market leading Oleflex tech from Honeywell UOP, but with new entrants from Dow and KBR as well as renewable processes that have become more popular as companies strive to become more sustainable. INSIGHT: ICIS Leading Business Barometer gauges pressured global economy By Nigel Davis 14-Sep-23 18:47 LONDON (ICIS)–The health of the chemical industry can be used as a bellwether for the that of the wider economy, tied as it is so closely to upstream energy and vitally important downstream industries and sectors, principally autos, construction and electronics. PODCAST: Global oil Q4 tight supply could intensify on three factors By Eloise Radley 14-Sep-23 16:03 LONDON (ICIS)–Crude prices rose above $90/bbl for the first time in 2023, in the week ending 8 September. Europe, US economies to grow in 2024, China slowdown to persist for years: economist By Will Beacham 12-Sep-23 23:41 SITGES, SPAIN (ICIS)–Europe and the US economies should grow next year while China will be trapped in a prolonged multi-year slowdown, according to Koes De Leus, chief economist of BNP Paribas Fortis. INSIGHT: Saudi, Russia crude cuts firm prices but macro bearishness casts a shadow By Tom Brown 11-Sep-23 23:45 LONDON (ICIS)–News last week that Saudi Arabia and Russia are to extend voluntary crude oil output cuts through to the rest of the year has driven prices to the highest levels of the year, but economic weakness and stronger flows from elsewhere may cap gains. Singapore factory activity improves in Aug but major external headwinds remain By Nurluqman Suratman 06-Sep-23 13:58 SINGAPORE (ICIS)–The country's manufacturing purchasing managers' index (PMI) rose marginally to 49.9 in August from 49.8 in July, marking the third consecutive month of improvement, according to data from the Singapore Institute of Purchasing and Materials Management. INSIGHT: Styrene capacity build up shifts global cost curve and threatens structural change By Moritz Lank 05-Sep-23 23:40 LONDON (ICIS)–High cost styrene production units are challenged in a difficult, slow-growing demand environment and one in which global capacity is building fast. INSIGHT: Trinseo seeks breathing room amid fiercely challenging market, financing conditions By Joseph Chang 07-Sep-23 03:55 NEW YORK (ICIS)–It has been a tough stretch for Trinseo as the polymers and latex binders producer seeks to refinance debt coming due next year amid fiercely challenging market and credit conditions, especially in Europe where it still operates a good chunk of assets even after shutdowns. European caustic soda quiet during August lull, spot prices under further pressure By Chris Barker 29-Aug-23 22:48 LONDON (ICIS)–European caustic soda players cut back activity in August, adding to the market's already weak outlook. Asia fatty alcohols mid-cuts C12-14 weakens on feedstock PKO decline By Helen Yan 30-Aug-23 12:40 SINGAPORE (ICIS)–Despite ongoing and upcoming plant turnarounds, spot prices of mid-cuts C12-14 are facing downward pressure from the decline in the feedstock palm kernel oil (PKO) prices and stagnant demand. Europe MA offers undercut Asian offers, some restocking may be seen By Anne-Sophie Briant-Vaghela 29-Aug-23 22:05 LONDON (ICIS)–European maleic anhydride (MA) prices could be near a bottom, although it remains to be seen how long the uptick or a halt in the downtrend will last given unanimous expectations that underlying demand will be stagnant for the rest of the year. Europe jet fuel price rally stalls following upstream volatility, fading gasoil strength By Shruti Salwan 25-Aug-23 17:17 LONDON (ICIS)–Consumption for aviation and road fuels has started to soften as the wind-down of the summer travel season begins, with lower gasoil and jet fuel spending exerting downward pressure on prices. CDI Economic Summary: US mild recession expected in H1 2024 By Kevin Swift 25-Aug-23 03:30 CHARLOTTE, North Carolina (ICIS)–The US economy could enter a mild recession in H1 2024 as the lag effects from the Federal Reserve’s heavy dose of rate hikes finally kick in. The Fed has also signaled the potential for further hikes as core inflation remains sticky. Gas sell-off to trigger German peak spark spread upside By Daniel Muir 24-Aug-23 22:48 LONDON (ICIS)–The sell off of benchmark natural gas contracts after Australian LNG strike risks eased should see clean peak spark spreads for German front-year delivery rebound in coming sessions, traders told ICIS. Front-month clean dark and clean spark spreads tighten By Anna Coulson 24-Aug-23 00:32 LONDON (ICIS)–Rising fuel costs saw German rolling front-month Clean Dark and Clean Spark Spreads improve slightly over the last seven days, but a weaker fuel mix saw coal and gas front-year profitability decrease. Thailand 2023 growth forecast cut to 2.5-3.0% after H1 slowdown By Nurluqman Suratman 21-Aug-23 15:37 SINGAPORE (ICIS)–Thailand on Monday cut its full-year growth forecast to 2.5-3.0% after the economy slowed in the first half of the year due to the weakness in global demand which has weighed on exports and manufacturing. INSIGHT: Shrinking China trade signals trouble for chemicals everywhereBy Will Beacham 10-Aug-23 19:26 BARCELONA (ICIS)–Double-digit declines in China’s latest import and export figures, together with shrinking domestic manufacturing data, confirm a persistent collapse in demand for chemicals around the world. Thailand’s PTTGC swings to Q2 net loss on crude-led slump in product prices By Pearl Bantillo 10-Aug-23 15:04 SINGAPORE (ICIS)–Thai producer PTT Global Chemical swung into a net loss of baht (BT) 5.6bn ($159m) in the second quarter of 2023 as product prices tracked the slump in upstream crude prices amid global recession and petrochemical overcapacity concerns. Saudi raises most Sept crude prices for Asia; hikes all Europe prices By James Dennis 08-Aug-23 10:49 SINGAPORE (ICIS)–Saudi Arabia issued its September Official Selling Prices (OSP), with price rises for most grades for customers in Asia and more marked increases for customers in northwest Europe and the Mediterranean, while there were no increases for US buyers. Saudi Aramco Q2 net profit falls 37.9% on lower oil prices, poor chemical margins By Nurluqman Suratman 07-Aug-23 15:49 SINGAPORE (ICIS)–Aramco's net profit fell by 37.9% year on year in the second quarter on the back of lower crude oil prices and weakening refining and chemicals margins, the Saudi energy giant said on Monday. Singapore manufacturing shows signs of recovery; external headwinds persistBy Nurluqman Suratman 03-Aug-23 12:55 SINGAPORE (ICIS)–Singapore’s manufacturing sector showed signs of recovery in July as new orders improved, but export headwinds are expected to persist as economic conditions at major trading partners remain poor. OUTLOOK: US BD, SBR likely to remain oversupplied amid weak demandBy Amanda Hay 03-Aug-23 03:03 HOUSTON (ICIS)–US butadiene (BD) and styrene butadiene rubber (SBR) are expected to remain oversupplied through the second half of 2023 because of weak demand for tyres. Austrian gas storage withdrawals could buck 2022 trend in Q4 ‘23By Irina Breilean 02-Aug-23 22:54 LONDON (ICIS)–Austrian VTP price dynamics suggest storage withdrawals will likely concentrate during the first quarter of 2024, with VTP Q1 ’24 prices trading at a premium over Q4 ’23, October ’23 and November ’23. INSIGHT: BASF grapples with demand trough, slow road backBy Tom Brown 02-Aug-23 21:12 LONDON (ICIS)–BASF and the wider chemicals sector is dealing with an environment more singular even than the conditions seen in the pandemic and 2008 financial crash according to BASF chief Martin Brudermuller, with little sign of a V-shaped recovery from the current demand trough. INSIGHT: Commercial start-up of Vietnam petrochemical complex delayed amid weak global demand By Pearl Bantillo 02-Aug-23 18:57 SINGAPORE (ICIS)–Thailand’s Siam Cement Group (SCG) expects mechanical completion and commissioning of Vietnam’s first cracker in August to September, pushing back the full commercial start-up of the Long Son Petrochemical project to the second half of the year amid oversupply concerns in Asia. China rolls out fresh stimulus to boost growth as July manufacturing contracts By Fanny Zhang 31-Jul-23 16:30 SINGAPORE (ICIS)–China has announced new measures to revive its fragile economy that has been losing steam since the second quarter, with the focus on boosting consumption. INFOGRAPHIC: Europe PET in survival mode despite peak summer season By Miguel Rodriguez Fernandez 24-Jul-23 19:01 LONDON (ICIS)–Post-COVID life, coupled with the Russia-Ukraine war and the volatile macroeconomics it has unleashed, are upending consumers’ habits. Restaurants are full, tourism is booming, yet people are saving on supermarket purchases, which is severely hurting demand f or polyethylene terephthalate (PET). IMF ups 2023 global GDP forecast, slowed growth expectations remain By Tom Brown 25-Jul-23 21:00 LONDON (ICIS)–The IMF on Tuesday modestly increased its global GDP growth estimates for 2023 while maintaining expectations that the recovery over the next 18 months will continue substantially slower than in 2022 as post-COVID headwinds and the Russia-Ukraine war weigh on the economy. OUTLOOK: Europe polyols demand forecast uncertain for H2 By Zubair Adam 26-Jul-23 17:00 LONDON (ICIS)–Polyols consumption in Europe was mainly limited in H1 2023, and there is no major recovery expected in H2. OUTLOOK: Short-term European SBR demand expectations bearish By Melissa Hurley 27-Jul-23 17:00 LONDON (ICIS)–European styrene butadiene rubber (SBR) demand has weakened in 2023 and the situation is expected to continue in the third quarter. INSIGHT: Resurgence of Iran gas price debate as politicians seek a rollback to formula By Keven Zhang 28-Jul-23 12:00 SINGAPORE (ICIS)–In mid-July, an official announcement from the Iranian government stated that the natural gas price for petrochemical producers was Iranian rials (Rls)70,000/cubic metre, up from Rls50,000/cubic metre. OUTLOOK: Europe PX braces for a gloomy H2 amid recessionary fears By Miguel Rodriguez Fernandez 21-Jul-23 17:00 LONDON (ICIS)–The Europe paraxylene (PX) market is getting ready to navigate a second half of the year marked by disappointing downstream demand, as the challenging macroeconomic scenario keeps denting orders from customers. French nukes to drive German gas-to-power demand in August By Eduardo Escajadillo 20-Jul-23 23:07 LONDON (ICIS)–German gas-fired generation could potentially gain momentum in August to compensate in the event of lower French nuclear power output amid warmer temperatures forecast in northwest Europe. Ukraine needs more realistic energy targets to attract investors, MP By Aura Sabadus 20-Jul-23 17:42 LONDON (ICIS)–Ukraine must guarantee a stable regulatory environment and competitive market conditions if it is determined to attract investments to rebuild its war-ravaged energy sector, Andrii Zuphanyn, the chair of the gas subcommittee in the Ukrainian parliament told ICIS. Profit warnings may drive sell-side M&A – bankers By Joseph Chang 20-Jul-23 04:55 NEW YORK (ICIS)–A very active earnings warning season for the chemical industry portending difficult conditions throughout 2023 could lead to more M&A activity, particularly on the sell side. Robust domestic demand to drive Asia ‘23 growth amid weak exports By Nurluqman Suratman 19-Jul-23 14:31 SINGAPORE (ICIS)–The Asian Development Bank (ADB) on Wednesday maintained its growth outlook for developing economies in Asia and the Pacific at 4.8% this year as robust domestic demand continues to support the region’s recovery. INSIGHT: Pakistan gets much-needed reprieve; polymer imports to improve By Pearl Bantillo 14-Jul-23 17:11 SINGAPORE (ICIS)–Billions of US dollars have started flowing into Pakistan after getting the much-awaited IMF stamp of approval that the south Asian nation will set its house in order, averting an impending sovereign debt default. INSIGHT: Chems warn of weak consumer goods, China as earnings season starts By Al Greenwood 13-Jul-23 21:41 HOUSTON (ICIS)–Chemical companies have flagged weakness in consumer goods and China in a wave of profit warnings issued before the start of earnings season. PODCAST: Falling chemical prices signal switch from inflation to deflation By Will Beacham 12-Jul-23 20:07 BARCELONA (ICIS)–Falling chemical prices could be a leading indicator of a switch from inflation to deflation in the broader economy. OUTLOOK: No respite from economic pressures and weak demand for Europe plasticizers market By Nicole Simpson 12-Jul-23 17:21 LONDON (ICIS)–Weak demand, strong competition between sellers and economic woe are expected to continue defining the European plasticizers spot market through the second half of 2023. OUTLOOK: As busy ‘warnings season’ nears end, a new reality sets in for H2 2023 By Joseph Chang 12-Jul-23 05:37 NEW YORK (ICIS)–A very active earnings warnings season for the chemical industry is just about over, resulting in a big reset downwards in earnings expectations for Q2 and the rest of the year. With a new reality setting in, the industry is bracing for earnings and new guidance that is likely to be far less optimistic than at the start of the year. OUTLOOK: Asia methanol to grapple with more supply; feedstock swings to direct market By Keven Zhang 11-Jul-23 11:40 SINGAPORE (ICIS)–Asia’s methanol market is expected to grapple with increased global supply in the second half of 2023 as new capacities are slated to come on stream in China, Middle East and north America. Europe suffers further operating rate cuts as demand malaise, overcapacity bite By Will Beacham 07-Jul-23 16:49 BARCELONA (ICIS)–Collapsing demand and competition from other regions have led to further deterioration in operating rates for Europe’s petrochemical sector, new data from ICIS shows. South Korea removes tariffs on naphtha, crude imports until yearend By Nurluqman Suratman 07-Jul-23 15:21 SINGAPORE (ICIS)–South Korea has removed tariffs imposed on naphtha and crude oil imports, to reduce cost burden for the domestic petrochemical industry and tame high inflation. Ukraine can scale up wind output despite war, market challenges By Aura Sabadus 06-Jul-23 20:01 LONDON (ICIS)–Ukraine could bring online as much as 55GW of wind capacity by 2050 despite major challenges related to the Russian invasion and issues linked to market design. Weak economic activity pressuring European oil demand, refining margins By Cecilia Barreiro 06-Jul-23 00:07 LONDON (ICIS)–It has been difficult for oil prices to push above the $80/bbl threshold as economic anxiety weighs on the market. Weak industrial and manufacturing demand in the US, EU and China has driven bearish market sentiment despite recent announcements from Saudi Arabia, Russia and Algeria of further supply cuts. Eurozone manufacturing slips to mid-2020 levels as demand slows, rate hikes bite By Tom Brown 03-Jul-23 19:00 LONDON (ICIS)–Eurozone manufacturing sector activity slowed in June to the weakest level since the early days of the COVID-19 pandemic as demand continued to fall, confidence sank and producers started to feel the impact of the central bank's interest rate hikes. INSIGHT: China MTBE pushed into overseas markets due to limited domestic demand By Aviva Zhang 30-Jun-23 12:30 SINGAPORE (ICIS)–Chinese methyl tert-butyl ether (MTBE) producers have been pushing into overseas markets since 2022 due to limited domestic consumption potential. Production capacity is in surplus and gasoline demand has plateaued. Brazil’s chemicals May producer prices fall sharply on lower naphtha values, stronger real By Jonathan Lopez 30-Jun-23 02:26 SAO PAULO (ICIS)–Brazil’s chemicals producer prices fell by nearly 6% in May, month on month, on the back of lower global naphtha values and a stronger currency bringing down prices in reais, the country’s statistics office IGBE said on Thursday. INSIGHT: Worries over weak Asia PA6 and domestic China market remain By Josh Quah 28-Jun-23 20:25 SINGAPORE (ICIS)–Asia polyamide 6 (PA6) markets are ending the quarter with much of the concerns that have been prevalent since the start of it – against a backdrop of weak demand in most regions and already below-threshold margin levels under pressure of falling further. OX imports into Europe up by nearly 10% in Q1 By Miguel Rodriguez Fernandez 27-Jun-23 19:55 LONDON (ICIS)–Imports of orthoxylene (OX) into the EU and the United Kingdom went up by 9.9% in Q1 year on year, according to the latest data from the ICIS Supply and Demand database. European heatwave could dampen German power imports through July By Calum Andrews 23-Jun-23 01:05 LONDON (ICIS)–Germany is likely to maintain a net import position through July, market sources have suggested to ICIS, however the extent will largely hinge on European temperatures. INSIGHT: Embedding inflation further weakens 2023 industrial demand for chemicals By Nigel Davis 22-Jun-23 20:12 LONDON (ICIS)–Chemical producers in Europe are in an especially difficult position but operators worldwide have had to face up to the fact that demand recovery in 2023 appears increasingly distant. INSIGHT: LANXESS CEO ‘Lehman 2’ warning highlights extreme and broadening demand weakness By Joseph Chang 21-Jun-23 05:29 NEW YORK (ICIS)–A huge earnings warning by Germany-based specialty chemicals company LANXESS highlights the extreme and extended weakness in European and global construction and electronics markets, along with surprising declines in “usually stable” consumer applications. Asia polyolefins overcapacity to worsen amid eurozone recession By Nurluqman Suratman 20-Jun-23 14:38 SINGAPORE (ICIS)–Asia’s polyolefins market is bracing for a supply overhang as heavy capacity additions coincide with a significant weakening of demand from the recession-laden eurozone, and amid the slowing Chinese economy. Global weekly spot IPEX down again on declines across regions By Yashas Mudumbai 19-Jun-23 18:58 LONDON (ICIS)–The global spot ICIS Petrochemical Index (IPEX) went down by 1.7% week on week on the back of price declines across all regions. Ample UK gas supply to boost exports over winter 2023 By Hector Falconer 16-Jun-23 01:30 LONDON (ICIS)–National Gas released its Gas Winter Review and Consultation on 15 June. For this coming winter, the British grid operator expects: INSIGHT: Shell joins list of companies reviewing chemicals as demand tanks, overcapacity grows By Will Beacham 15-Jun-23 22:36 BARCELONA (ICIS)–Shell has joined the ranks of major chemical companies which are reviewing and rationalising their operations as demand and profitability continue to fall amid rampant overcapacity. INSIGHT: Asia petrochemicals markets plunge in June on supply length – ICIS analysts By Ann Sun 15-Jun-23 18:24 SINGAPORE (ICIS)–Following a weak May, petrochemical markets in Asia are witnessing a further drop in prices in June on supply/demand imbalances. INSIGHT: Shell to be ‘ruthless’ in capital allocation with Singapore petchems, Europe units under review By Joseph Chang 15-Jun-23 05:29 NEW YORK (ICIS)–UK-based energy giant Shell will take a “ruthless” approach to capital allocation along with a focus on simplification. There will be a renewed commitment to oil and gas, and liquefied natural gas (LNG) where returns are expected to be the highest, while chemicals will come under greater scrutiny with the Singapore energy and petrochemical assets under review and European plants being evaluated “unit by unit”. JUNE CRUDE OUTLOOK: Bearish demand narrative confronted by tightening global oil supplies By Cecilia Barreiro 13-Jun-23 22:39 LONDON (ICIS)–Oil prices are expected to continue retreating during the rest of June as worries over the health of the global economy and bearish oil demand prospects depress market sentiment. However, dwindling spare capacity and a tighter sour-crude market could rekindle price volatility in July. PODCAST: China, energy transition spur volatility in oil and chemical markets By Will Beacham 13-Jun-23 20:36 BARCELONA (ICIS)–As China’s economy decelerates and the shift to renewable energy gathers pace, prepare for much greater volatility in the oil and chemical markets. Global spot IPEX down for ninth consecutive week on falls across all regions By Miguel Rodriguez Fernandez 12-Jun-23 19:31 LONDON (ICIS)–The global spot ICIS Petrochemical Index (IPEX) went down by 1.8% week on week on the back of price declines across all regions. Saudi Arabia 2023 GDP growth slows to 2.1% on oil output cuts – IMF By Nurluqman Suratman 08-Jun-23 15:31 SINGAPORE (ICIS)–Saudi Arabia, the world’s biggest crude exporter, is expected to post a slower GDP growth of 2.1% this year in view of production cuts announced in April, according to the International Monetary Fund (IMF). Czech Republic eyes SMRs development in addition to standard reactors by 2030 By Simona Uhrinova 08-Jun-23 01:14 LONDON (ICIS)–The Czech Republic would need to develop small and medium sized modular reactors (SMRs) in addition to standard nuclear plants to reduce its dependence on cross-border imports before 2030. ICIS China May petrochemical price index slumps 7%; June demand stays weak By Yvonne Shi 08-Jun-23 11:33 SINGAPORE (ICIS)–Sluggish demand sent the ICIS China Petrochemical Price Index in May tumbling by 7% from end-April despite some stability in the upstream crude market during the period. Fears of gloomy summer for Europe PE, PP By Ben Lake 06-Jun-23 19:25 LONDON (ICIS)–Polyethylene (PE) and polypropylene (PP) players in Europe are bracing for a challenging summer, with buyers worried by woeful demand, while producers closely monitor already lowered operating rates to avoid dipping into negative margins. Dow cuts Q2 sales guidance on challenging macros By Joseph Chang 02-Jun-23 04:48 NEW YORK (ICIS)–US-based Dow is taking down its Q2 sales forecast to a range of $11.0bn-11.5bn from its prior estimate of $11.75bn-12.25bn on challenging macroeconomic conditions and lower pricing levels, its CEO said at an investor conference. PODCAST: Ukraine SOE corporate governance is vital for reconstruction efforts, specialist By Aura Sabadus 01-Jun-23 21:28 LONDON (ICIS)– Corporate governance rules at Ukraine’s energy state owned enterprises (SOEs) have been critical to market reforms and to helping the country secure a long-term gas transit contract with Russia. NE Asia C2 outlook downbeat on rising regional supply, weak China data By Yeow Pei Lin 01-Jun-23 11:26 SINGAPORE (ICIS)–Northeast Asia’s ethylene (C2) players are cautious on expectations of rising regional supplies and weak downstream outlook for the third quarter as the recovery in the Chinese economy loses momentum. Caixin China May manufacturing PMI rises to 50.9, first expansion in three months By Nurluqman Suratman 01-Jun-23 11:26 SINGAPORE (ICIS)–Caixin’s China manufacturing purchasing managers’ index (PMI) picked up from 49.5 in April to 50.9 in May, marking the first expansion in three months, the Chinese media firm said on Thursday. High stocks could curb Italian Q4 ‘23 gas and power risk By Camilla Vitanza 31-May-23 23:44 LONDON (ICIS)– High gas storage levels could reduce some of the risk premium priced in the Italian gas and power Q4 ’23 products ahead of expiry, although LNG supply will likely remain a key driver. China manufacturing weakness weighs on crude; outlook dims further By Nurluqman Suratman 31-May-23 13:36 SINGAPORE (ICIS)–China's manufacturing sector lost further momentum in May, heightening concerns that oil consumption in the world’s second-biggest economy could weaken further. INSIGHT: Petrochemical prices and margins under relentless pressure By Nigel Davis 31-May-23 00:38 LONDON (ICIS)–The persistent global weak demand environment continues to put pressure on producers and prices are falling as the balance with output remains elusive. PODCAST: Demand flops in chemical markets around the world, gloomy outlook By Will Beacham 30-May-23 20:25 BARCELONA (ICIS)–Chemical markets around the world are suffering from collapsed demand conditions and oversupply with no prospect of a turnaround in the coming months. Depressed US manufacturing activity weighing on PP demand By Zachary Moore 26-May-23 05:40 HOUSTON (ICIS)–Demand for polypropylene (PP) in the US is facing a bearish short-term outlook as the US manufacturing sector remains in contractionary territory. INSIGHT: A tale of two economies, as resurgent services eclipses languishing industry By Tom Brown 25-May-23 23:05 LONDON (ICIS)–After the dark warnings of late 2022, ministers at the European Commission could be forgiven for sounding a little smug. PODCAST: Rampant China chemicals overcapacity could rebalance by 2024/5 By Will Beacham 25-May-23 21:00 BARCELONA (ICIS)–Excess capacity plaguing China’s petrochemical markets could return to more balanced conditions by 2024/5 as the current wave of additions ends and demand gradually improves. APIC '23: INSIGHT: Asia petrochemicals navigate poor demand amid China start-ups; carve 'green' path By Pearl Bantillo 24-May-23 19:50 SINGAPORE (ICIS)–Uncertainties will hound Asia’s petrochemical markets for the rest of the year and possibly into 2024 amid the global economic slowdown at a time of strong capacity additions in regional powerhouse China. INSIGHT: Europe petrochemicals demand remains weak and prices under intense pressure By Nigel Davis 23-May-23 23:10 LONDON (ICIS)–This striking chart from Germany’s chemicals and pharmaceuticals trade association, the VCI, does not even tell the full story for the country’s petrochemical and polymers sectors. APIC ’23: Asia PE, PP margins to stay in unhealthy range despite China reopening By Nurluqman Suratman 19-May-23 19:25 NEW DELHI (ICIS)–Asia’s polyethylene (PE) and polypropylene (PP) markets are expected to face poor margins across all production routes despite China’s reopening, an industry analyst said on Friday. APIC ’23: Japan petrochemical plants run at 80% on current demand By Pearl Bantillo 19-May-23 17:13 NEW DELHI (ICIS)–Japan’s petrochemical plants have been running at an average rate of about 80% amid demand uncertainties this year, an industry executive told ICIS. INSIGHT: Fundamental Asia olefin imbalance persists despite better margins By Joey Zhou 19-May-23 14:00 SINGAPORE(ICIS)–Asia olefin margins from major production routes have improved and remained in profitable territory since March, driven by lower feedstock prices. Eurozone inflation rises on energy cost pressure By Morgan Condon 17-May-23 20:05 LONDON (ICIS)–Eurozone inflation edged up slightly on persistent pressure from energy costs in April, as the rate for the wider EU showed a soft decrease, according to the latest data from the EU’s statistical agency Eurostat on Wednesday. Annual inflation in the eurozone rose to 7.0%, up from 6.9% in March. In the wider EU, annual inflation fell to 8.1%, from 8.3% in the previous month. Compared to a year prior, inflation for the eurozone remained slightly softer, as the rate was pitched at 7.4% in April 2022, while the level remained stable on the previous year for the EU at 8.1%. Global oil demand expectations for 2023 increased in May on stronger China recovery – IEA By Morgan Condon 16-May-23 22:25 LONDON (ICIS)–Global oil demand is set to increase in 2023, driven by strength in China, according to the International Energy Agency (IEA) on Tuesday. The IEA’s monthly oil report shows that demand is expected to rise by 2.2m bbl/day year on year in 2023, marking an average 102m bbl/day, supported by economic recovery in China surpassing expectations. Macroeconomic pressures and soft demand was reflected in weaker oil pricing in April and early May, caused lingering concerns of a recession in some regions. The IEA, however, increased its output forecast on a strong recovery in the second half of the year. China is expected to account for nearly 60% of global growth in 2023. INSIGHT: Weak demand dominates chemicals in Q2 as economies drag By Nigel Davis 11-May-23 00:41 LONDON (ICIS)–The persistence and wide spread of the demand slump is the key issue for chemical producers in 2023, now mid-way through the second quarter. Recent financial reporting from chemical companies of all types and in all locations has underlined the impact of weak demand on sales in the first quarter. The year-on-year comparisons have proved to be stark, and reduced production the driver of lower revenues at a time of still high costs of sales. Certainly, the focus in Europe and large parts of the rest of the world has shifted from energy costs (and availability). Higher feedstock costs, slow demand maintain pressure on US polyether polyol margins By Zachary Moore 21-Apr-23 06:41 HOUSTON (ICIS)–A combination of higher feedstock costs along with slower demand has been maintaining pressure on margins for US polyether polyol producers, with margins likely to remain compressed over the next few months. INSIGHT: Plastics, petchems in Europe still waiting for construction season, Q2 may be reality check By Vicky Ellis 20-Apr-23 21:45 LONDON (ICIS)–As warmer, sunnier days grow more frequent, Europe’s construction industry should be ramping up for a busy period. But the season is proving a disappointment, with weaker demand across a wide range of petrochemical and plastics products. INSIGHT: Hope for 2023 European construction market recovery falters as spring demand uptick fails to materialize By Nicole Simpson 19-Apr-23 20:52 LONDON (ICIS)–Since late 2022, chemicals players have been hopeful that better demand is just around the corner but optimism is faltering as economic conditions remain challenging and spring construction demand has failed to ignite. INSIGHT: Diverse Asia April price trends for olefins and aromatics chain chemicals By Jimmy Zhang 19-Apr-23 19:15 SINGAPORE (ICIS)– Weak consumer confidence and economic pressures are expected to weigh on the price outlook for Asia petrochemicals. UK summer demand to drop, exports to France in Q3 likely By Anna Coulson 19-Apr-23 00:07 LONDON (ICIS)–National Grid is confident that there will be sufficient supply to meet electricity demand over the summer, the UK’s Electricity System Operator (ESO) announced in its Summer Outlook 2023 on 18 April. Global oil demand growth hopes pinned on faltering Chinese economy By Barney Gray 12-Apr-23 18:42 LONDON (ICIS)–Chinese government data for March, published earlier this month, indicated that domestic consumer demand is weak and the manufacturing sector was under pressure at the end of Q1, which could hinder the anticipated China-led growth in global oil demand. IMF keeps developing Asia 2023 growth forecast at 5.3%; trims India projections By Nurluqman Suratman 12-Apr-23 13:23 SINGAPORE (ICIS)–The International Monetary Fund (IMF) has kept its 2023 growth forecast for developing Asia at 5.3% but trimmed its forecast for next year amid rising risks in global financial conditions. INSIGHT: Europe chemicals must wait until 2026/7 for gas cost relief By Will Beacham 11-Apr-23 22:58 BARCELONA (ICIS)–Although record inflows of liquefied natural gas (LNG) have helped European gas prices fall, a cold winter could see them soar, with relief from volatility only in prospect for petrochemical customers by 2026/7 when major new sources come onstream globally. INSIGHT: Vietnam economy sputters as first petrochemical complex about to start up By Pearl Bantillo 06-Apr-23 11:00 SINGAPORE (ICIS)–Vietnam hopes to stem deteriorating manufacturing conditions, borne of weak external demand, by cutting the cost of borrowing to spur domestic activity as it gears toward commercial operations of its first petrochemicals complex. US auto sector faces economic headwinds on rising interest rates, higher prices By Adam Yanelli 05-Apr-23 05:05 HOUSTON (ICIS)–US March auto sales ticked lower from February as economic headwinds have replaced supply chain issues as obstacles facing the industry that relies heavily on chemicals. Developing Asia 2023 GDP to grow faster at 4.8% but downside risks remain – ADB By Nurluqman Suratman 04-Apr-23 12:10 SINGAPORE (ICIS)–Developing economies in the Asia Pacific region are projected to grow at a faster pace of 4.8% this year and in 2024 on the back of higher consumption, tourism and investments due to continued easing of pandemic restrictions, but downside risks remain, the Asian Development Bank (ADB) said. INSIGHT: Europe chems look to tough Q2 as economic indicators remain choppy By Tom Brown 03-Apr-23 21:47 LONDON (ICIS)–With expectations growing for some of the headwinds buffeting the chemicals sector to ease in the second half of the year, conditions remain challenging for the second quarter, while economic indicators point to a continuing “volatile phase” according to an analyst. Oil surges after surprise OPEC+ output cut, lifting Asia naphtha, benzene By Nurluqman Suratman 03-Apr-23 12:57 SINGAPORE (ICIS)–Oil prices rose by more than $6/bbl on Monday after the OPEC and its allies unexpectedly announced further production cuts of about 1.16m barrels per day on Sunday. Hungary unlikely to reach EU intermediate gas storage targets By Irina Breilean 29-Mar-23 12:53 LONDON (ICIS)–Hungary may not reach the next EU intermediate storage fullness target on 1 May, ICIS analysis indicates. EU intermediate targets have been in place since November 2022, in preparation for the start of the 2023 gas winter. The targets apply to all member states with underground gas storage sites on their territories and directly interconnected to their market areas. Intermediate targets are in force for 1 February, 1 May, 1 July, and 1 September, two months ahead of the beginning of the gas year. ICIS data shows storage sites across Hungary were 33.2% full on 27 March, a 26.2 percentage point increase compared to last year. However, this still stands 3.8 percentage points short of the upcoming May target of 37%. Joint gas purchasing uptake may be slow as buyers locked into contracts By Gretchen Ransow 28-Mar-23 23:20 LONDON (ICIS)–Uptake of the EU’s joint purchasing model may be limited in its first year, as companies were already locked into contracts due to “huge panic” about prices in 2022, European Commission vice-president Maros Sefcovic told the European Parliament’s Committee on Industry, Research and Energy (ITRE) on 28 March. However, if the platform does prove successful the EU wants to extend the model beyond gas to other strategic commodities such as hydrogen, critical raw materials or technologies linked to the energy transition. Sefcovic told ITRE on 28 March that there was still much work to do but joint gas purchasing would give valuable experience for the future. Ukraine's new policy proposals to 'revolutionise' energy sector By Aura Sabadus 28-Mar-23 00:22 LONDON (ICIS)–Ukraine is preparing a raft of wide-ranging regulations that could pave the way for the complete overhaul of its energy sector. The step is a priority for the mid-term, a senior Kyiv-based lawyer told ICIS. Maksym Sysoiev, partner at global law firm Dentons, said the reconstruction of the energy sector is deemed a priority for Ukraine and added that if all regulations that are now under discussion are implemented, they would trigger a “revolution” in the energy sector. Russia to extend export restrictions on fertilizers until November By Deepika Thapliyal 27-Mar-23 22:39 LONDON (ICIS)–Russia is planning to extend restrictions on fertilizer exports until November to guarantee availability in the domestic market, according to the country’s agriculture minister Dmitry Patrushev. Current restrictions on exports are valid until end-May. To curb inflation and to ensure that there was a reliable supply of fertilizers to its farmers, the government imposed export quotas in December 2021. The restrictions have continued since the war with Ukraine broke out in February 2022, although they have not had a significant impact on the availability of Russian fertilizer exports – apart from nitrates. Asia petrochemicals demand tepid on macroeconomy, oversupply concerns By Nurluqman Suratman 24-Mar-23 14:16 SINGAPORE (ICIS)–Asia's petrochemical markets continue to face tepid demand as economic recovery in regional bellwether China remains slower than initially expected, with new production capacities adding to oversupply concerns. European acrylates subdued with underwhelming demand By Mathew Jolin-Beech 24-Mar-23 01:26 LONDON (ICIS)–The European acrylates markets are all currently subdued with demand described as “soft." CDI Economic Summary: US regional banking crisis lowers odds of soft landing By Joseph Chang 23-Mar-23 22:21 NEW YORK (ICIS)–The failure of two sizeable banks (Silicon Valley Bank and Signature Bank) in the US and the crisis of confidence contagion spreading to other regional banks and now European financial institutions threatens to significantly tighten lending conditions at the very least, further slowing economic growth and potentially tipping US and European economies into recession. Asia PMDI import markets bearish on poor downstream demand By Shannen Ng 23-Mar-23 15:12 SINGAPORE (ICIS)–Asian import markets for polymeric methylene diphenyl diisocyanate (PMDI) were dominated by largely bearish sentiment in the week ended 22 March. PODCAST: Asia, Mideast PS demand tepid on competitive imports, feedstock volatility By Damini Dabholkar 23-Mar-23 11:14 SINGAPORE (ICIS)–Asian and Middle Eastern polystyrene (PS) markets are seeing slow demand with regional supply remaining relatively unchanged. INSIGHT: US Fed undeterred from 2% inflation goal means more tough times ahead for chemicals By Joseph Chang 23-Mar-23 05:34 NEW YORK (ICIS)–Even amid a regional banking crisis, the US Federal Reserve remains undeterred in its goal of bringing inflation down to its 2% target. This was evidenced by another 0.25 percentage point rate hike and will mean weakening economic conditions, a lower chance of a soft landing and a more challenging demand environment for chemicals going forward. Phenol energy surcharges will start to disappear on lower TTF, but no demand improvement seen By Jane Gibson 23-Mar-23 00:57 LONDON (ICIS)–Falling upstream gas prices may offer chemical sellers and buyers some relief but the impact on demand levels has yet to be significant. PODCAST: Plunging shipping rates point to normalising global logistics, Europe under pressure By Will Beacham 22-Mar-23 22:58 BARCELONA (ICIS)–Steep falls in container shipping rates indicate that the pandemic-induced logistics crisis may be drawing to a close, but this now makes Europe more vulnerable to a flood of cheap imports from Asia. US R-PET buying sentiment weakens in wake of banking crisis By Arianne Perez 22-Mar-23 20:11 SINGAPORE (ICIS)–Asian exporters of recycled polyethylene terephthalate (R-PET) cargoes are expected to continue to see cautious buying from converters in the US following the banking crisis. INSIGHT: New PE/PP capacities risk derailing nascent Asia polyolefin recovery By Izham Ahmad 22-Mar-23 17:28 SINGAPORE (ICIS)–A wave of new polyethylene (PE) and polypropylene (PP) supply in Asia is threatening to upend the tentative demand recovery the region has been experiencing since the end of the Lunar New Year holidays as new suppliers fight to establish market share in an increasingly crowded market. Asia polyamide 6,6 Q2 mood darkened by fiscal year closing, demand outlook By Josh Quah 22-Mar-23 13:12 SINGAPORE (ICIS)–Asia’s nylon polyamide 6,6 (PA66) markets remain weak, ahead of turnarounds coming up for some producers in northeast Asia. China PP prices fall to nearly three-year low amid increasing supply, lower-than-expected demand By Lucy Shuai 22-Mar-23 12:44 SINGAPORE (ICIS)–China polypropylene (PP) prices fell to a nearly three-year-low amid increasing supply and lower-than-expected demand, and the market may remain under pressure in Q2. Asia naphtha swings to multi-month lows on volatile crude By Melanie Wee 21-Mar-23 13:42 SINGAPORE (ICIS)–Asia’s naphtha markets can expect heightened volatility, largely tracking crude oil futures movement, as demand prospects are being weighed down by market jitters over the health of the global banking system. PODCAST: Subdued spot trading activity in Europe's oxo-alcohols and derivatives markets By Marion Boakye 21-Mar-23 03:35 LONDON (ICIS)–Throughout March – the oxo-alcohols and derivative markets in Europe have experienced weak spot demand, ample supply, and thin import opportunities. INSIGHT: Constrained consumer budgets limit demand for major chemicals consuming sectors By Nigel Davis 21-Mar-23 00:49 LONDON (ICIS)–This is by no means an easy time for chemical producers as the industry’s major downstream markets continue to be influenced by the impact on demand of rising costs and higher interest rates. Europe's chemical sector shrinks – battered by high costs, poor demand and cheaper imports By Will Beacham 20-Mar-23 23:10 BARCELONA (ICIS)–Collapsing Q4 profits and losses for European chemical majors, together with low expectations for 2023, show just how badly the sector is still suffering. Europe markets firm after emergency UBS Credit Suisse purchase By Tom Brown 20-Mar-23 20:15 LONDON (ICIS)–European markets firmed on Monday after Switzerland-based banking group UBS announced plans to acquire embattled rival Credit Suisse, raising market hopes that banking sector contagion may be limited. Global weekly spot IPEX down on price declines across regions By Will Beacham 20-Mar-23 19:11 LONDON (ICIS)–The global weekly spot ICIS Petrochemical Index (IPEX) fell by 2.0% week on week on the back of lower index values across regions. PODCAST: Asian PP markets grapple with increased supply, lower-than-expected demand in 2023 By Damini Dabholkar 20-Mar-23 19:06 SINGAPORE (ICIS)–Asian polypropylene (PP) markets are being challenged by increasing capacity in 2023, especially in the China market, while demand continues to recover more slowly than expected. Crude dips to lowest since December 2021 on banking sector turmoil By James Dennis 20-Mar-23 17:52 SINGAPORE (ICIS)–Crude prices declined on Monday to their lowest levels since December 2021 before recovering on growing financial concerns following equity market losses and instability in the banking sector in Asian trading. Asia petrochemical shares, oil prices weaken after UBS rescue of Credit Suisse By Nurluqman Suratman 20-Mar-23 12:43 SINGAPORE (ICIS)–Shares of petrochemical companies in Asia were mostly weaker and crude futures fell on Monday on fears of a banking crisis contagion, as troubled Credit Suisse was rescued by its Swiss rival UBS in a government-backed deal. INSIGHT: European TiO2 operations at risk, but China may not be the answer By Heidi Finch 17-Mar-23 17:53 LONDON (ICIS)–While energy costs in Europe are more relaxed compared with 2022 peaks, the TiO2 marketand the wider chemical industry in Europe are still facing residual economic and demand headwinds. European production is at risk, while China/Asia capacity is increasing. Asia glycerine demand weighed down by caution after US bank collapse and turmoil By Helen Yan 17-Mar-23 11:48 SINGAPORE (ICIS)–Asia’s glycerine spot demand has been weighed down by prevailing caution following the collapse of two mid-sized banks in the US and plunging bank stocks in Europe. INSIGHT: Banking contagion threatens to spread, hit chemicals demand hard By Joseph Chang 17-Mar-23 05:47 NEW YORK (ICIS)–The failure of two sizeable banks (Silicon Valley Bank, Signature Bank) in the US and the crisis of confidence contagion spreading to other US regional banks and now European financial institutions threatens to significantly tighten lending conditions at the very least, further slowing economic growth and potentially tipping the US and European economies into recession. Asia naphtha tumbles on tepid demand; crude oil losses By Melanie Wee 16-Mar-23 12:56 SINGAPORE (ICIS)–Asia naphtha markets are under pressure on the back of fragile demand, while taking cues from global crude oil futures. INSIGHT: Banking woes rattle US chem shares By Al Greenwood 16-Mar-23 05:03 HOUSTON (ICIS)–Shares of US-listed chemical companies fell on Wednesday amid concerns about the implications of a string of bank failures. Topic Page by Aura Sabadus and Will Beacham. Additional reporting by Richard Ewing and Sophie Udubasceanu. Maps and graphs by Yashas Mudumbai.
Summary of 2024 Americas Outlook stories
HOUSTON (ICIS)–Here are the '24 Americas Outlook stories which ran on ICIS news throughout December and January. Click on a headline to read the full story. OUTLOOK '24: US economy poised for soft landing – will chemicals see a restocking bump? A year ago, just about every economist called for a US recession, and for good reason. Inflation was out of control, interest rates were headed higher and growth was slowing dramatically. But 2023 was a year of resilience, driven by the strong labor market and US consumer. OUTLOOK '24: US ABS, PC demand weakness lingers The 1.5-year demand decline in US acrylonitrile butadiene styrene (ABS) and polycarbonate (PC) markets may bottom out in 2024. OUTLOOK '24: US BDO starts new year amid weak derivative demand US 1,4 butanediol (BDO) is set to start 2024 after a year of suppressed demand and five straight quarters of contract price declines. OUTLOOK ’24: Global oversupply to pressure PE margins, US to remain advantaged The global polyethylene (PE) industry will continue to face a significant supply overhang in 2024, as recent capacity additions have well exceeded demand growth. Demand from emerging Asian economies, especially, has failed to keep pace with expectations, although most major global PE markets faced recessionary or near recessionary conditions in 2023. OUTLOOK '24: Lat Am PE to remain oversupplied, demand recovery pushed back Polyethylene (PE) markets in Latin America are set to continue being oversupplied in 2024 while demand is expected to grow at a slower rate than expected. OUTLOOK ’24: Demand likely to be lukewarm for US IPA, MEK amid weak housing sector Demand for methyl ethyl ketone (MEK) and isopropanol (IPA) is likely to be lukewarm amid a soft housing construction market and with lower GDP growth forecasts, but with destocking largely over, some restocking could be forthcoming. OUTLOOK ’24: US PP margins to face pressure amid global oversupply US polypropylene (PP) margins are likely to face pressure in 2024 as a global oversupply in the PP industry is likely to keep pricing and margins depressed globally. According to the ICIS Supply and Demand Database, global PP capacity has increased by 26.1% over the past five years while PP demand rose by 15.2% over the same time period, resulting in a significant supply overhang. OUTLOOK '24: Lat Am’s PP demand to remain sluggish, imports to keep rising Demand for polypropylene (PP) in Latin America is unlikely to recover in the first half of 2024, with market participants expecting demand to be low in the first quarter. OUTLOOK '24: US acrylonitrile demand weakness to continue The two-year demand decline in US acrylonitrile (ACN) markets may continue well into 2024. OUTLOOK '24: US chem tanker market tight into H1; headwinds from Panama drought, Middle East tensions The US liquid chemical tanker shipping market is expected to remain tight into the first half of the year, container rates are likely to be steady at near-pre-pandemic levels, and drought conditions in Panama and geopolitical unrest in the Middle East are likely to create additional headwinds for shippers in the coming year. OUTLOOK '24: US benzene to face softness in derivative demand; lowered crude oil forecasts US benzene is experiencing soft demand in Q4 '23, as derivative demand remains weak. OUTLOOK '24: US toluene, MX demand and premiums over RBOB to remain strong US toluene and mixed xylenes (MX) demand is expected to remain strong in 2024 due to a combination of supply shortages and ongoing strength in octane demand. OUTLOOK ’24: US PX consumption could improve in Q2 2024 on bottle-grade PET summer demand US paraxylene (PX) consumption will likely remain poor through Q1 of 2024, however, the market is expected to experience an uptick in consumption in Q2 as downstream bottle-grade polyethylene terephthalate (PET) prepares for the peak summer season. OUTLOOK ’24: Melamine restocking may take place in H1 depending on the US economy performance The just-in-time purchasing strategy implemented this year caused the ICIS market prices for US melamine contracts to decline in the first and second quarters, before stabilizing in the third quarter due to a rollover. OUTLOOK '24: Chem shares start new year on high note US-listed shares of chemical companies will start the new year on a high note after rallying in the final weeks of 2023 with the rest of the nation's stock market on the expectations that inflation is getting under control and that the Federal Reserve could start lowering interest rates. OUTLOOK ’24: US ethylene market to navigate challenging start to new year The US ethylene market is expected to remain long throughout the first half of 2024, facing headwinds from weak demand, ample supply and a sluggish economy. While unit maintenance will tighten supply some, significant improvement in supply/demand is not anticipated until at least the second half of next year. OUTLOOK '24: Soft housing market to weigh on US etac demand Demand for US ethyl acetate (etac) in 2024 could face headwinds from a slow residential construction market, but steady demand from adhesives, packaging, and printing inks could be enough to maintain a floor. OUTLOOK '24: US R-PET market split by impact of imports, despite ratable consumer goods PCR content progress Despite the beginning of a new year, the US recycled polyethylene terephthalate (R-PET) market is bracing for a continuation of lackluster demand, responding to the pressure from global economic weakness and increasing import competition. OUTLOOK '24: US epoxy resins at critical point as weak demand erodes margins US epoxy resins players are turning their attention to 2024 with hope that overall demand will improve, but most are unable to point to any factors that can drive growth. OUTLOOK '24: Feedstock and demand headwinds weighing on US MMA US methyl methacrylate (MMA) players are wondering how feedstocks and demand will shape up going into 2024, but sentiment is not particularly positive. OUTLOOK ’24: US propylene market unsettled on tight supply The US propylene market faces supply constraints entering the new year that threaten to keep prices volatile. But demand is expected to continue to be tepid, which will add some stability to the tight market. OUTLOOK '24: After lackluster 2023, US glycol ethers, butac demand may benefit from potential rate cuts Both US butyl acetate (butac) and glycol ethers have experienced lukewarm demand in 2023 due to headwinds facing key end-use markets. OUTLOOK '24: US acrylate demand expected to face more favorable conditions After facing soft demand for much of 2023, US glacial acrylic acid (GAA) and acrylate esters prices rose following a Q4 increase in propylene prices. Though demand remains lackluster in December, it could be gradually boosted in 2024. OUTLOOK '24: US aromatic, aliphatic solvents sentiment moderately optimistic In line with a somewhat tepid view a year ago, the outlook for US aromatic and aliphatic solvents for H1 2024 is guardedly optimistic. OUTLOOK ’24: US PS demand likely to remain subdued in 2024 Demand for US polystyrene (PS) is expected to remain subdued into the next year amid expectations of another year of sluggish GDP growth along with interpolymer substitution pressures. OUTLOOK '24: Lat Am PS pressured by slow manufacturing, single-use plastics regulations The Latin American polystyrene (PS) market will continue to face challenges in 2024 as manufacturing in most countries remains slow and regulations against single-use plastics increase. OUTLOOK '24: US EPS market to face continued weakness in new year The outlook for expandable polystyrene (EPS) in the new year is weak, at least in first half of the year, as the same issues that challenged the market in 2023 will continue. OUTLOOK '24: US nylon demand weak amid manufacturing contraction Demand decline in US nylon markets which started in Q3, 2022 will continue in H1 2024. ICIS economists are forecasting a soft landing of US economy with recovery starting in H2 2024. OUTLOOK '24: US caustic soda starts New Year with sentiment of slimmer demand, price increase nominations US liquid caustic soda starts 2024 with producers taking action to address the threat of oversupply amid weak demand and price declines. OUTLOOK ’24: Latin America caustic soda market focusing on new initiatives in H1 Latin American countries are poised to sustain a strong dependence on exports from the United States in H1. Anticipating a challenging domestic market, US producers plan to prioritize exports in 2024 based on the prevailing economic outlook. OUTLOOK '24: US acetic acid, VAM supply tightness to improve in H1 US acetic acid and derivative vinyl acetate monomer (VAM) supply remains limited, but the tightness should continue to improve throughout H1. OUTLOOK ’24: US styrene expected to face continued headwinds The US styrene market is expected to continue to see weak demand and sufficient supply into the new year and will generally follow current macroeconomic trends. OUTLOOK ‘24: After slow 2023, US TiO2 demand demand hinges on rate cuts North American titanium dioxide (TiO2) demand has been weak for much of the past year, with a soft housing market amid elevated interest rates. However, the US Federal Reserve has recently signaled there could be multiple rate cuts in 2024, which could boost demand for key consumer sectors involving paints and coatings. OUTLOOK '24: US soda ash sees growing supply, slower demand and lower contract prices US soda ash enters 2024 with hopes of a rebalancing of supply and demand and a more stable market and lower prices following three years of supply and demand surges and retreats and record price increases for the once staid and mature commodity. OUTLOOK '24: Feedstock concerns, margin compression to underpin US fatty acids, alcohols markets Feedstock concerns and margin compression will continue to underpin US fatty acids and fatty alcohols markets in 2024 as demand headwinds persist in the first half of the year. OUTLOOK '24: US phenol demand to stay weak, pressuring acetone supply US phenol demand will likely remain weak and weigh on acetone supply in H1 2024 as no major factors are evident that could drive growth. OUTLOOK ’24: US polyurethane demand outlook to remain subdued into 2024 Demand for polyurethane systems in the US is expected to remain subdued moving into the new year as the US and global economies are expected to continue to struggle with macroeconomic headwinds. OUTLOOK '24: US HCl heads into 2024 with slowing oilfield demand and gloomy economic outlook US hydrochloric acid (HCl) ends 2023 with recent slimmer supply and slightly firming prices, but enters 2024 in a more balanced market with wavering demand. OUTLOOK '24: After weak demand for much of '23, US MPG pressured by rising feedstocks After declining for much of the past year, mono propylene glycol (MPG) contract prices have risen in consecutive months, with several rounds of separate price increase nominations emerging in Q4 ‘23. OUTLOOK '24: US base oils markets look for return of demand US base oils markets appear poised for ample supplies with buyers continued focus on just-in-time procurement as trade flows adjust to new legislation in 2024. OUTLOOK ’24: US paraffin wax market may continue to face demand challenges along with ample supply in H1 2024 A certain amount of demand and feedstock cost volatility could cause some price fluctuations for US slack wax in H1 2024. OUTLOOK '24: US fuels demand to soften amid poor macroeconomic conditions US demand for gasoline, diesel and jet fuel is expected to fall in 2024 due to the likelihood of recessionary economic conditions. OUTLOOK '24: Ample supply of US fuel, industrial ethanol expected in H1 on increased production US fuel and industrial ethanol markets are likely to be well supplied in 2024 on increased production and record corn crops, with pricing likely to be determined based on upstream costs and economic conditions. OUTLOOK ’24: Brazil fuel parity fluctuating in H1 on crude oil price trend Brazil expectations point to a slight decline in hydrous ethanol prices during the first half, aiming to boost competition with gasoline, as the parity remains more favorable to biofuel in Q4. OUTLOOK ’24: LatAm petchems to remain at mercy of China amid slowing economies Latin American petrochemicals are to remain ‘price takers’ in the global market and dependent on China’s overcapacities and that country’s success in reviving its own manufacturing sectors. OUTLOOK '24: INSIGHT: Regulatory surge, CFATS, EV incentives in play for US chems In 2024, the US chemical industry could see an attempt to revive the industry's main anti-terrorism program, an attempt at further permit reform and a last-ditch effort by the president to push through regulations before the elections in November. OUTLOOK '24: US BD import needs decrease as demand shifts, SBR stays weak The US is expected to have limited need for imported butadiene (BD) in 2024 and exports to Asia are likely to continue, especially if demand for derivatives such as styrene butadiene rubber (SBR) remains weak. OUTLOOK '24: US R-PE battles direct and indirect demand destruction from long virgin PE market The US recycled polyethylene (R-PE) market braces for continued weakness in order volumes across both sustainability-driven and cost-sensitive demand for both post-consumer and post-industrial recycled high-density polyethylene (R-HDPE) and recycled low-density polyethylene (R-LDPE) in 2024. OUTLOOK '24: US MA cautiously pessimistic amid lackluster demand US maleic anhydride (MA) is cautiously pessimistic going into 2024 amid lackluster demand and economic uncertainty. OUTLOOK '24: US methanol discounts reach unprecedented levels US methanol supply is expected to remain ample into the new year as the demand side remains seasonally slower. OUTLOOK ’24: Low water levels on Mississippi River unlikely to negatively impact PA, OX supply Low water levels along the Mississippi River are unlikely to negatively impact phthalic anhydride (PA) and orthoxylene (OX) supply due to low demand as a result of seasonality, coupled with economic headwinds, including elevated interest and mortgage rates, as well as lingering high inflation. OUTLOOK ’24: US plasticizers stay focused despite varying demand in H1 The market outlook for plasticizers in H1 2024 remains somewhat gloomy due to the ongoing effects of inflation and interest rates in industries in the niches of electronics, construction, automotive, and packaging. OUTLOOK '24: US PVC starts new year with bullish stance, pending capacity expansions US polyvinyl chloride (PVC) starts the new year with an abrupt exit from one of the worst years for demand and value preservation since the credit market wreckage of 2009. OUTLOOK ’24: Latin America PVC production exceeding local demand in H1 The complete recovery of polyvinyl chloride (PVC) demand in Latin America is not anticipated in the first half of 2024. OUTLOOK '24: US feedstocks to face headwinds Overall demand for US feedstocks is relatively low heading into 2024 amid falling ethane demand and potential macroeconomic headwinds. OUTLOOK '24: US glycerine supplies to remain ample in H1 despite mixed biofuels landscape US glycerine supplies are largely expected to remain ample in H1 2024, despite a structural decrease in installed US biodiesel capacity, as sustained strong biodiesel production in Indonesia and lackluster demand in China threaten to once again flood the US with excess supplies from southeast Asia. OUTLOOK ’24: US EG export volumes, production rates could be negatively impacted by Panama Canal backlog US ethylene glycol (EG) exports and production rates could be negatively impacted by the disruptions at the Panama Canal. Recently, the Panama Canal Authority (PCA) announced it would slash the number of vessels allowed to transit the waterway daily through 1 February 2024, as recent drought persists. OUTLOOK ’24: PET, PTA demand could pick up in Q2 ahead of peak summer season Bottle grade US polyethylene terephthalate (PET) and purified terephthalic acid (PTA) demand could pick up in the second quarter of 2024 as the market expects to begin preparing for peak bottled beverage season during the summer months. OUTLOOK ’24: Weather, Asia offers in H1 continue to have direct impact on PET prices in Latin America Increased import tariffs and economic uncertainties persist in influencing the quantities of PET exported from Asia to Latin America in 2023 and this trend will continue in 2024. Asia will remain committed to the global market to align with supply and demand dynamics, with ample materials accessible in H1, predominantly directed towards the west coast of South America. Despite the existence of import tariffs on Chinese resin in Mexico and Brazil, Asia's offerings continue to exert pressure on prices in Latin America in the short term.
Summary of 2024 Asia Outlook Stories
SINGAPORE (ICIS)–Here are the 2024 Asia Outlook stories which ran on ICIS news throughout December and January. Click on a headline to read the full story. OUTLOOK ‘24: China acrylic acid to see shifts in focus, limited supply-demand changes New acrylic acid plants in China are mostly scheduled to start up in the second half of 2024, with the timeline remaining uncertain. Apart from expansions of supplementary acrylic esters plants, new capacities are also seen in other downstream industries such as water treatment. OUTLOOK ’24: Asia ethylene dour sentiment may undermine derivative expansion While Asia ethylene markets are likely to see demand in some regions being able to keep pace with new planned capacity, a bearish outlook for the coming year threatens to dampen further recovery hopes for the commodity. OUTLOOK ‘24: Asia etac, butac demand to stay limited amid China economic woes Asia’s ethyl acetate (etac) demand may remain limited in Q1 2024 amid challenging macroeconomic conditions and concerns of China’s frail demand. OUTLOOK ‘24: Macroeconomic headwinds to continue to impact Asia R-PET Sustainability targets will remain insufficient to bolster downstream demand for Asian recycled polyethylene terephthalate (R-PET) in the first half of 2024. OUTLOOK ‘24: China propylene supply to be driven by PDH run rates China's domestic propylene market will continue to see expanding capacities in 2024. Spot supply is expected to depend more on the operating rates of propane dehydrogenation (PDH) units as PDH will become the largest production route in the new year. OUTLOOK ’24: Asia acrylic acid and acrylates face strong economic headwinds, ample supply Asian acrylic acid and acrylate esters faced a turbulent 2023, with hopes of a recovery dented by multiple setbacks. OUTLOOK '24: Asia ECH, LER recovery hampered by supply overhang, tepid demand The recovery in Asia’s epichlorohydrin (ECH) and liquid epoxy resins (LER) markets, which hinges on the primary end-use market of the construction industries, will be hampered by continued demand headwinds and increases in ECH and LER capacities. OUTLOOK '24: Asia propylene braces for volatility, downstream demand growth to slow Asia’s propylene import market is set to face increased volatility in 2024 as market participants opt to lower term volumes in favour of higher spot allocations. Beyond this, uncertainties in upstream markets also continue to compound expectations that 2024 spot markets will see more volatility. OUTLOOK ’24: Asia BD to wrestle between tight supply and muted downstream demand Asia's spot butadiene (BD) market has been gripped by supply constraints for some time now. A respite seems to be quite unlikely in the near term, or at least for Q1 2024, so long as operations at regional crackers remain sub-optimal. OUTLOOK ’24: Asia glycol ethers await demand rebound, BG supply to contract Demand for Asia glycol ethers may stay sluggish in Q1 2024, while the butyl glycol (BG) market will grapple with tighter supply in Q1 2024. OUTLOOK '24: Oversupplied China PP market to face obstacles for export growth Faced with trade barriers from multiple countries and uncompetitive raw material costs, China PP market is expected to face rising capacity and saturated demand in 2024. OUTLOOK '24: SE Asia PP overshadowed by oversupply; new import regulations add uncertainties Southeast Asia's polypropylene (PP) market remains overshadowed by an oversupply situation that may worsen further with additional production capacities coming on stream in China and some major southeast Asian producers ramping up their commercial operations. OUTLOOK ’24: China ACN demand growth to trail behind new capacity additions China's acrylonitrile (ACN) market is set to see a concurrent rise in both supply and demand in 2024. OUTLOOK '24: China benzene supply to tighten in H1 on demand pick-up China’s benzene market will remain tightly balanced in 2024 on the back of slowing capacity expansions from large integrated refining and petrochemical facilities, amid new downstream plant start-ups. OUTLOOK '24: Asia melamine could see demand support, stable costs China's melamine makers have hopes to see steady buying interest on the domestic and external fronts going into 2024, even as the market could continue to face some pressure from high run rates in China. OUTLOOK ’24: Supply overhang, slow derivative to blunt Asia adipic acid recovery While most of the year seemed lacklustre for Asia adipic acid markets, ICIS data showed that adipic acid did see an 8.69% year-on-year improvement in exports from northeast Asia from January to October*, indicating a year of recovery overall for the commodity in spite of the pessimistic climate. OUTLOOK ‘24: Mideast conflict to keep regional PE, PP demand weak in Q1 Demand for polypropylene (PP) and polyethylene (PE) in the Middle East is expected to remain weak throughout the first quarter of 2024, weighed down by a prolonged Israel-Hamas conflict and amid fears it would spread to neighbouring countries. OUTLOOK ’24: China PE supply-demand to rebalance on capacity rise China’s PE capacity expansion shows an overall slowdown in 2024. However, competitive pressures persist for high-density polyethylene (HDPE), while demand is poised for a steady and modest increase. OUTLOOK ’24: SE Asia PE face challenges from China, Vietnam demand weakness The southeast Asian polyethylene (PE) market is expected to see a sluggish start to the new year, with demand from China showing little sign of any improvement while demand in Vietnam also stagnates amid an increasingly competitive price environment. OUTLOOK '24: Asia PX looks to gasoline markets, downstream for direction The paraxylene (PX) markets in Asia will look towards the gasoline markets as well as the downstream purified terephthalic acid (PTA) and polyester sectors for direction in 2024. OUTLOOK ’24: Asia MEK facing strong upstream pressure; demand outlook mixed Heading into 2024, market players are divided about demand in the Asia methyl ethyl ketone (MEK) markets. The main driver of the market in early 2024 could likely be the strong feedstock naphtha market. OUTLOOK ’24: Asia IPA braces for upstream-driven volatility, rising capacity In 2024, Asian isopropanol (IPA) makers are likely to face pressures from the acetone volatility which plagued the market in 2023, as well as increased supply when new capacities in China come on stream in Q1 2024. OUTLOOK ‘24: China demand recovery to play major role in India PE, PP sentiment Demand for polypropylene (PP) and polyethylene (PE) in the Indian market during the first half of 2024 will be tightly linked to an expected demand recovery in China after the Lunar New Year Holidays in February. OUTLOOK ‘24: Asia toluene pins hopes on demand recovery Asia’s toluene markets are heading into a traditional slowdown, with the winter season weighing on gasoline-blending demand, while solvent-sector buying may only see a pick-up in early 2024. OUTLOOK ’24: Asia benzene-naphtha spread to stay healthy, derivative additions outweigh production Asia benzene players expressed mixed projections for 2024, amid planned nameplate capacity additions down the benzene chain. OUTLOOK ’24: Asia ACN market sees low chance of improvement The acrylonitrile (ACN) market in Asia has endured a difficult 2023, with promises of a strong COVID-19 recovery hitherto unfulfilled. OUTLOOK '24: Asia's naphtha supply crunch to persist Asia’s naphtha market is expected to stay well supported in the short-term as political tensions, bad weather conditions and Middle Eastern refinery maintenance will limit supplies coming to this region. OUTLOOK ’24: Asia MX growth subdued, downstream expansions to support demand Asia mixed xylenes (MX) of both isomer grades will observe slowdown in capacity expansions in 2024, but new downstream paraxylene (PX) and purified terephthalic acid (PTA) start-ups are prompting cautious expectations of demand support among some regional market players. OUTLOOK '24: East and south Asia ethanolamines faces soft demand, ample supply The ethanolamines markets in east and south Asia are expected to be mired in weakness into the first quarter of 2024. The plant outages in Europe and Asia in the latter half of Q4 2023 did little to bolster the market, with demand largely in a low ebb. OUTLOOK ’24: Asia PBT to face increased competition, weak demand The Asian polybutylene terephthalate (PBT) market ended 2023 on a softer note with concerns that the weak demand would continue into Q1 2024. OUTLOOK ’24: China BD market supply still tight, downstream expansion provides support In 2024, China’s butadiene (BD) capacity expansion will slow, but downstream ABS and others may continue to launch new facilities, and so downstream sectors will still have room to accept overseas BD supply. OUTLOOK '24: China BDO faces high-speed capacity expansion, low utilization China’s 1,4-butanediol (BDO) capacities will rise at a quicker pace in 2024, after kicking off a new expansion cycle since 2023, but plant utilization rates may stay low amid a potential supply surplus. OUTLOOK ’24: Asia ABS, SAN run rates to be reduced, capacity additions outweigh demand Asia acrylonitrile-butadiene-styrene (ABS) and styrene acrylonitrile (SAN) players largely expect production to be mitigated to factor in recent and upcoming capacity additions, with some sellers readjusting their focus to emerging Asian markets and beyond. OUTLOOK '24: East, south Asia LAB in seasonal lull while China soldiers on The linear alkylbenzene (LAB) markets in east and south Asia have entered a slower year-end season, with demand likely to stay tepid in the near term. OUTLOOK ’24: Asia BDO faces greater oversupply, lacklustre downstream performance The Asia 1,4-butanediol (BDO) market had already faced the first round of new capacities in China, with even more to follow. OUTLOOK ’24: Asia synthetic rubber braces for soft demand; hopes pinned on China Soft downstream demand, underscored by lingering macroeconomic headwinds, is expected to weigh on Asian’s spot import market for various synthetic rubber grades – from styrene-butadiene-rubber (SBR), polybutadiene rubber (PBR) to acrylonitrile-butadiene-rubber (NBR). OUTLOOK ’24: Mideast, S Asia PS to remain dull, potential restocking ahead of Lunar New Year Polystyrene (PS) markets in both South Asia and the Middle East struggled to show any momentum in the last quarter of 2023, as evidenced by the poor demand and sales. OUTLOOK ’24: Asia PS market to face competition, macro uncertainties After struggling with feedstock styrene monomer (SM) market uncertainties and shallow margins for a year, Asia’s polystyrene (PS) market players appear to have a mostly conservative market outlook for 2024. OUTLOOK ’24: Asia caustic soda demand likely mixed; producers grapple with costs Asia's caustic soda spot market is likely to see uneven demand, while producers are likely to struggle with squeezed margins amid higher operating costs. OUTLOOK '24: Asia nylon markets to meet tougher challenges in 2024 The nylon markets in Asia saw obstacles in 2023 which have mostly yet to be overcome. Macroeconomic factors and increased frugality among consumers of end-use products, such as textiles and clothing, have driven down demand, especially with ramped-up recycling and upcycling efforts. OUTLOOK ‘24: China n-butanol to see ample supply on capacity expansions Supply will likely remain sufficient in the first half of 2024 due to few turnarounds for n-butanol (NBA) despite the switch to 2-ethylhexanol (2-EH) production at some oxo-alcohols plants. OUTLOOK ’24: Asia styrene players eye changing trade landscape, recovery may stay slow Asia's styrene market players faced a challenging year in 2023 amid slow demand and shallow production margins. OUTLOOK ’24: China SM capacity growth to slow, competition to intensify China’s styrene monomer (SM) capacity growth is expected to slow down significantly in 2024, after rapid expansions in 2020-2023, with only Chambroad Petrochemical’s 600,000 tonne/year and Luoyang Petrochemical’s 120,000 tonne/year plants likely to come on stream. Despite the slowing capacity additions, competition will intensify as the industry is in the process of seeking a dynamic balance. OUTLOOK ’24: China acetic acid may face pressure from capacity expansion China’s acetic acid market may face pressure from imbalanced fundamentals in 2024. A number of new units are scheduled to start up while there are many uncertainties on the demand side. OUTLOOK '24: Asia fatty acids demand tepid in Q1, with pick up from Q2 Asia fatty acids demand for the first quarter of 2024 is likely to be tepid but is expected to strengthen from the second quarter onwards if there is an ease in the macro-economic headwinds which have battered the global economy. OUTLOOK '24: Asia fatty alcohols subdued in Q1 but CPKO rally may bolster demand Asia fatty alcohols market is likely to be subdued in the first quarter of 2024, but a rally in the feedstock crude palm kernel oil (CPKO) price will bolster demand. OUTLOOK ‘24: Asia EVA supply overhang clouds Summer Olympics optimism Asia’s ethylene vinyl acetate (EVA) market outlook in the near-term faces supply length and slow demand pressures, as the downstream footwear and photovoltaic (PV) industries focus on destocking activities hence clouding optimism from the 2024 Summer Olympics multiplier effect. OUTLOOK ‘24: TiO2 trend could mirror 2023, but potential ADD may be a game changer Spot titanium dioxide (TiO2) prices could continue to trend similarly to 2023 while Chinese makers are bracing for potential antidumping duties (ADDs) on Chinese products to Europe. OUTLOOK’24: Asia’s phenol market faces rationalisation as China’s capacity growth threatens Phenol and acetone market rationalisation in Asia is underway as output cuts in 2023 failed to safeguard margins amid capacity growth in China. Leading producers will push for a benzene cost-based approach in the 2024 contract pricing. OUTLOOK ’24: Asia’s PO markets likely to remain subdued, minimal downstream support Asia’s propylene oxide (PO) markets will likely continue grappling with weak demand in 2024, with supply mixed across the region, and the downstream sectors unlikely to provide significant support to demand. OUTLOOK ’24: Asia polyols demand outlooks mixed across region Asia’s import markets for slabstock polyols were in the doldrums for most of 2023, and the demand outlooks for 2024 are mixed across the region. OUTLOOK ’24: China phenol to wrestle between supply surge and demand China’s phenol capacity expansions in 2024 may be slower than in 2023, but the market will continue to feel supply-side pressure as a number of new plants coming on stream around the end of 2023 are likely to release output in 2024. Whether downstream producers could digest the supply additions and whether exports will increase in 2024 are a key concern for the market. OUTLOOK '24: Asia chemical freight rates may remain elevated Charterers have advanced discussions for chemical shipments in Asia amid expectations that tanker supply may remain tight into the new year. OUTLOOK ‘24: China BPA imports to drop further on new start-ups The expected surge in 2024 domestic supply following start-ups of more capacities in end-2023 will further erode demand for overseas cargoes. OUTLOOK ’24: Mideast polyether polyols market to see supply outstrip demand in 2024 Middle East polyols markets are expected are facing excess supply and tepid demand next year on additional capacities for both polyols and their feedstock, propylene oxide (PO). OUTLOOK ’24: Asia’s acetone market braced for higher term prices on reduced output outside China Asia’s acetone market players were braced for higher 2024 term prices as global supply shortages in 2023 – due to planned and unplanned output cuts and outages at phenol/acetone plants – supported pricing discussions. OUTLOOK '24: Asian BPA sellers brace for tough times as China cuts imports Asian bisphenol A (BPA) makers will continue to have a challenging time in most of the first quarter as China is likely to keep its import volume low due to growing domestic supplies and weak downstream demand. OUTLOOK ‘24: Asia Group I base oils supply to stay tight, Group II supply to rise Asia’s Group I base oils supply is expected to remain tight in Q1 2024 due to a refinery turnaround and production cuts in southeast Asia. OUTLOOK '24: Asia caprolactam market anticipates China’s shift from net importer A shift in caprolactam (capro) supply and dynamics throughout 2023, especially in China, has led to expectations that China, once a net importer, could be self-sufficient as soon as 2024 or 2025. OUTLOOK '24: Asia MA mired in demand weakness while supply expands Asia’s maleic anhydride (MA) markets are likely to remain subdued in the first quarter of 2024 amid weak demand and ample supply. OUTLOOK ‘24: Asia oxo-alcohols stalemate to persist amid tight import supply The stalemate in Asia's oxo-alcohol import markets is expected to continue into the first half of the first quarter. OUTLOOK '24: Asia methanol prospects marred by production expansions, stagnant demand Methanol market participants in Asia are maintaining a bearish outlook, weighed by the rise in production capacity expected in 2024 and following a slower-than-expected recovery from last year. OUTLOOK '24: Asia PA near-term demand to remain muted, supply-driven upside capped Asia’s phthalic anhydride (PA) markets are likely to stay subdued in H1 2024, with tepid demand outweighing cost-push factors. OUTLOOK '24: Asia MTBE supply glut persists, demand may improve Trading of methyl tertiary butyl ether (MTBE) in Asia has been active in Asia on ample supply in 2023, while the extent of oversupply could be reduced with potentially improving demand in 2024. OUTLOOK '24: China MTBE capacities to continue growing; exports to SE Asia persist China's methyl tertiary butyl ether (MTBE) capacity expansion will continue into 2024, exacerbating the domestic supply pressure amid expectations of limited local demand as gasoline consumption may have peaked, but southeast Asia may still require some incremental volumes. OUTLOOK '24: Asia’s PVC market enters 2024 in a sombre mood If Asia’s polyvinyl chloride (PVC) spot market performance in 2023 is anything to go by, players are bracing themselves for similar challenges in 2024. OUTLOOK ’24: Mideast, south Asia PVC Q1 uptake expected to be healthy, oversupply remains a challenge Polyvinyl chloride (PVC) markets in both South Asia and the Middle East saw a lot of volatility in 2023, affected by events like the safeguard investigation in India, seasonal factors and economic challenges faced by major economies, like China. OUTLOOK '24: China methanol supply-demand to grow at slower pace; imports to stay high China’s methanol output and demand are expected to grow further in 2024, albeit at a slower pace, while the import volumes may remain at high levels. OUTLOOK '24: Asia plasticizers demand sluggish, 2-EH to remain key market driver The Asian plasticizers market is expected to remain sluggish in H1 2024, as a seasonal lull in demand coincides with weak end-user consumption due to the bearish construction sector in China. OUTLOOK ’24: New capacities to exert further pressure on China PO market China's domestic propylene oxide (PO) market is expected to suffer further supply pressure because of new capacity start-ups in 2024. OUTLOOK ’24: China 2-EH supply to remain tight in H1 2024 China’s 2-ethylhexanol (2-EH) market is likely to experience a tight balance in the first half of 2024 due to limited new capacities. OUTLOOK '24: Easing Asia acetic acid supply may outstrip demand upside in Q1 Asia acetic acid supplies will lengthen during the first half of 2024, offsetting upside from regional plant outage and increased downstream plant utilisation in two key markets. OUTLOOK ’24: Asia glycerine demand to stay tepid in Q1 on bearish sentiment Asia’s glycerine demand is expected to remain soft in the first quarter of 2024 given continued weakness in the global economy. OUTLOOK '24: Asia PET supply expected to outstrip demand on new capacities Asia's polyethylene terephthalate (PET) supply is set to outstrip demand in 2024 on the back of new capacities coming on stream. OUTLOOK '24: Asian PTA capacity expansion continues, downstream demand growth to lag The purified terephthalic acid (PTA) markets in Asia will undergo another challenging year ahead, amid continual expansions of new capacities in China. OUTLOOK ’24 INSIGHT: Asia MEG market could improve in 2024 as capacity build-up eases The Asian mono ethylene glycol (MEG) market is expected to hit the pause button in 2024 after aggressively expanding capacity over the past few years. The market is expected to brace for some improvement in prices to help ease poor or even negative margins. OUTLOOK '24: GCC PET supply to recover, demand to rise in 2024 Supply of polyethylene terephthalate (PET) spot cargoes from the Gulf Cooperation Council (GCC) is expected to be healthy going into 2024, while domestic demand is expected to be flat. Demand from key export markets, however, is expected to see some slight increase going into 2024. OUTLOOK ‘24: China’s MEG supply-demand to improve on slower capacity growth The capacity boom since 2020, driven by the start-ups of multiple large refining and chemical projects, will ease in 2024, which will give a relief to the pressurized monoethylene glycol (MEG) market and improve the supply-demand fundamentals. OUTLOOK ’24: China slated to transform into net exporter for MIBK Asia’s methyl isobutyl ketone (MIBK) import demand looks set to contract in 2024 as China dramatically increases its production capacity from as early as the first half of next year. OUTLOOK ’24: Reduced supply may support China’s DEG market As a by-product, the output of diethylene glycol (DEG) has been significantly squeezed in recent years by the low operating rates at monoethylene glycol (MEG) units. MEG producers in various regions based on different routes are facing competition amid persistently thin margins. OUTLOOK '24: Asia soap noodles to remain soft in Q1 on macro headwinds Asia’s soap noodles market is expected to remain soft in the first quarter of 2024 as regional economies grapple with inflationary pressures and global recession fears amid a global economic downturn. OUTLOOK '24: Asia FAE tepid in Q1 on weak demand and bearish sentiment Asia’s fatty alcohol ethoxylates (FAE) market is expected to remain tepid in the first quarter of 2024 amid a slowdown in activities during the Lunar New Year holidays. OUTLOOK ’24: Solar glass demand, supply disruption fuel China’s soda ash market China’s soda ash market may continue to find support in the first quarter of 2024 amid domestic output disruptions on the back of capacity additions in the downstream solar glass sector in 2023 while stock buffering interest among buyers in southeast Asia may stimulate spot market liquidity. OUTLOOK ‘24: Costs to drive China PTA market amid capacity mismatch with upstream PX The domestic purified terephthalic acid (PTA) market is likely to be cost-driven in 2024, as its capacity expansion – albeit slowing down – may lead to a mismatch compared with upstream paraxylene (PX), which may not see any capacity additions next year. OUTLOOK '24: Tight VAM supplies in Asia may persist into Q1 Asia’s vinyl acetate monomer (VAM) prices for prompt imports have risen on signs that bulk cargo availability may remain tight into the first quarter, contrary to previous expectations. OUTLOOK ‘24: China VAM supply may tighten in Q1 despite new capacities China’s domestic vinyl acetate monomer (VAM) production capacity is poised for a consistent upswing in 2024, with the continuous expansion of downstream China's ethylene vinyl acetate (EVA) production capacity in recent years.
OUTLOOK '24: Europe mixed plastic waste demand weakness to continue
LONDON (ICIS)–Demand for mixed plastic waste in Europe from the mechanical recycling and burn-for-energy sectors is expected to remain weak into 2024 amid ongoing challenging macroeconomic conditions. This has resulted in reduced industrial output which has blunted demand for burn-for-energy volumes, and from key mechanical recycling end-use sectors such as construction. For burn-for-energy markets, only the defence sector has seen robust demand in 2023 owing to ongoing geopolitical tensions. For mechanical recyclers, the low price of mono-material bales and falling prices for most finished recycled polyolefin flake and pellet grades in 2023 have removed the economic incentive to produce from mixed polyolefin bales that had been seen in 2022. This is expected to continue to be the case while bearish conditions persist across mechanical recycling markets. Estimations of how long this will be vary from player to player, although some sources expect that demand will remain limited at least through H1 2024. Buying interest from chemical recyclers has remained firm throughout 2023, but the market remains too small to impact the overall supply/demand balance for mixed plastic waste. Nevertheless, the sector's market share of mixed plastic waste – and mixed polyolefins in particular – is expected to increase in the mid-term as additional capacity comes on stream. While chemical recycling can process waste types that it would be difficult or impossible for mechanical recyclers to use, it is a myth that there is no link between the input waste quality and output quality of chemical recyclers, and that chemical recyclers can use any form of waste. For example, pyrolysis-based processes typically aim to limit chlorine content in bales due to corrosion risks; polyethylene terephthalate (PET) content in bales because it doesn’t pyrolyse and it creates oxygenation; and nylon and flame retardants, which also oxygenate the process. Pyrolysis is the dominant form of chemical recycling in Europe. They also typically aim to minimise moisture content, because loose water molecules in the reactor can cause changes to pressure values. The production of pyrolysis oil requires an inert atmosphere (i.e. heating in the absence of oxygen). Any sorting that needs to be done to remove the presence of these materials in the input bale adds additional cost and slows throughput. As a result, pyrolysis-based chemical recyclers typically opt for mixed polyolefin bales (with a typical minimum 80% polyolefin content, and often a minimum 90% polyolefin content) as an input source. Coupled with this, the quality of the input waste has a direct impact on the quantity and type of impurities present in the pyrolysis oil output and the boiling point of the pyrolysis oil. Boiling point, chlorine content, sulphur, fluorine, nitrogen and oxygen are among the key determiners of pyrolysis oil prices. Pyrolysis oil can be – and often is – run through an upgrader or purifier to enhance its properties, but the quality of input waste has an impact both on yield and quality – and therefore profitability – throughout the pyrolysis chain that is often under-discussed. Because of the link between input and output quality in pyrolysis oil, 2023 had begun to see the emergence of new grades of mixed polyolefins – trading at a premium to standard grades – specifically targeting the needs of pyrolysis-based chemical recyclers. Multiple waste managers have confirmed in Q4 2023 that they are developing projects to provide bespoke mixes. This is in response to some of the challenges chemical recyclers have found with pre-treatment and sorting on site, particularly connected to the need to continuously adapt processes to account for continually shifting feedstock mixes. Pre-treating and sorting at waste manager level creates economies of scale and prevents the slowdown in throughput sometimes associated with chemical recyclers sorting on site. Chemical recycling players continue to explore the use of pellets and agglomerates because they help: Limit the impurities such as sulphur, fluoride, oxygen, chlorine and nitrogen in finished pyrolysis oil Enable placing feedstock straight into the reactor and thereby save on capital expenditure Avoid slowing throughput and the expense of onsite sorting Avoid degradation and allow players to stockpile material ahead of plant scale-ups This is a trend expected to increase in the mid-term, alongside the underlying growth of the chemical recycling sector, and which has the potential to radically reshape the market in the mid-term. Focus article by Mark Victory The introduction of three new pyrolysis oil spot price quotes in to its recently renamed Mixed Plastic Waste Europe and Pyrolysis Oil Europe pricing service has made ICIS the first market information service to price chemical recycling outputs. With our pre-existing mechanical recycling, waste bales, and virgin price coverage, ICIS gives you the complete picture across the value chain. For more information on the new prices please contact Mark Victory at email@example.com. Image credit: Shutterstock
Big Three US automakers eye return to full production after union ratifies new contracts
HOUSTON (ICIS)–The Big Three automakers in the US said they are ready to move forward and reach full production schedules in the coming days now that membership in the United Auto Workers (UAW) union have ratified new contracts and ended a six-week strike. The Big Three – General Motors (GM), Ford, and Chrysler parent Stellantis – combine to produce almost 43% of new vehicles in the US. The auto sector is important to the chemicals industry as a typical vehicle contains nearly $3,950 of chemistry including chemical products and chemical processing. Virtually every component of a light vehicle, from the front bumper to the rear taillights, features some chemistry, according to Kevin Swift, ICIS senior economist for global chemicals. The UAW, representing a combined 150,000 autoworkers at the Big Three, said on Monday that 64% of voting members voted in favor of the agreements. The new contracts include significant wage increases of at least 33% and faster progression to top pay, shortening the time it takes to reach top pay levels to three years from eight years. Stellantis agreed to reopen its Belvidere, Illinois, plant, which was shut down in February, and committed to building a $3.2bn battery plant on the site. The UAW won commitments from all three automakers to bring electric vehicle (EV) and battery jobs under the union’s national agreements. GM chairman and CEO Mary Barra said she was pleased with the ratification. “We can now move forward as one team doing what we do best – delivering great products for our customers and winning together,” Barra said. Mark Stewart, COO of Stellantis North America, said the company will now focus on executing its 2030 strategic plan. Ford president and CEO Jim Farley said the company is on track to reach full production schedules in the coming days at its assembly plants in Michigan, Kentucky and Illinois that were affected during the strike. IMPACT ON CHEMICALS Ramesh Iyer, director, engineering plastics at Chemical Data (CDI) said the ratification is good news for the industry and that the impact was not as drastic as it could have been because strike only shut down high-volume vehicle production for a couple of weeks. An analysis of industry data obtained by ICIS at the start of the strike showed monthly polymer demand likely fell by 26,000 tonnes for polypropylene (PP), 11,000 tonnes each for polyurethanes (PU) and nylon, and 5,000 tonnes each for acrylonitrile-butadiene-styrene (ABS) and polyvinyl chloride (PVC), based on H1 2023 volumes. At the height of the strike, about 36% of the Big Three’s North American auto production was offline and associated plants had to cope with layoffs because of disruptions to supply chains related to the strike. The National Automobile Dealers Association (NADA) said preliminary estimates from Wards Intelligence is that sales losses related to the strike totaled about 35,000 units, and that sales losses do not appear to have been made up by other original equipment manufacturers (OEMs). Production losses were higher, NADA said, at about 200,000 units, but the loss did not significantly affect total industry inventory levels. New light-vehicle inventory on the ground and in transit at the beginning of October totaled 2.06m units and October’s month-end inventory totaled 2.15m units, an increase of 4.4%. “We believe that inventory levels will continue to build throughout the remaining two months of the year,” NADA Chief Economist Patrick Manzi said. NADA is projecting new light vehicle sales to come in at 15.4m units for full year 2023. Focus story by Adam Yanelli Additional reporting by Al Greenwood Visit the ICIS coronavirus topic page for analysis of the impact on chemical markets and links to latest news.
US UAW unions at Ford, Stellantis approve contracts
HOUSTON (ICIS)–US union members at Ford and Stellantis approved new labor contracts, according to vote tallies published on Friday. "It is good news that the union ratified the contract," said Ramesh Iyer, director, engineering plastics at Chemical Data (CDI). "The impact was minimized as the high-volume vehicle production were shut down only for a couple of weeks." The members of the United Auto Workers (UAW) unions join those at General Motors (GM), who approved the contract earlier. The tallies are calculated by adding up the votes of each local at the individual plants. Although some locals rejected the contracts, these votes were more than offset by those that approved them. The tally at Stellantis is 69.6% in favor of the contract and 30.4% against. The tally at Ford is 68.2% in favor and 31.8% against. The Big Three automakers – Ford, GM and Chrysler parent Stellantis – reached tentative agreements late last month with the union leadership to end the six-week strike. The members of the union later voted on those agreements. IMPACT ON CHEMICALS The petrochemical industry is closely monitoring the situation as the auto and truck sector is a major consumer of petrochemicals that make up more than one-third of the raw material costs of an average vehicle. US motor vehicle and parts output fell by 10% month on month in October because of the UAW strikes against the Detroit Big Three automakers, according to the US Federal Reserve on Thursday. The automotive sector drives demand for chemicals such as polypropylene (PP), along with nylon, polystyrene (PS), styrene butadiene rubber (SBR), polyurethane (PU), methyl methacrylate (MMA) and polymethyl methacrylate (PMMA). Additional reporting by Stefan Baumgarten Please also visit the ICIS automotive topic page Thumbnail shows automobiles like those made by Ford and Stellantis. Image by Shutterstock.
With GM vote secured, UAW eyes ratification from US automakers Ford, Stellantis
HOUSTON–With nearly 55% of unionised General Motors (GM) workers voting to ratify the new labour contract this week, the United Auto Workers (UAW) union now shifts its attention to Ford and Stellantis, with current vote totals indicating the deal should pass comfortably. According to vote trackers on the UAW website, Ford hourly employees have voted 67% to 33% in favor of ratification, and almost 70% of Stellantis hourly workers have voted to ratify the deal. Salaried union workers at both companies, which are a much smaller percentage of total employees than the hourly workers, have voted in even higher numbers to accept the deal. Some union locals voted against ratification, but while each individual local votes on the tentative deal, it is the total combined vote from membership across all locals that determines if it is accepted or not. The Big Three automakers – Ford, GM and Chrysler parent Stellantis – reached tentative agreements late last month with the union to end the six-week strike. IMPACT ON CHEMICALS The petrochemical industry is closely monitoring the situation as the auto and truck sector is a major consumer of petrochemicals that make up more than one-third of the raw material costs of an average vehicle. US motor vehicle and parts output fell by 10% month on month in October because of the UAW strikes against the Detroit Big Three automakers, according to the US Federal Reserve on Thursday. The automotive sector drives demand for chemicals such as polypropylene (PP), along with nylon, polystyrene (PS), styrene butadiene rubber (SBR), polyurethane (PU), methyl methacrylate (MMA) and polymethyl methacrylate (PMMA). Additional reporting by Stefan Baumgarten Please also visit the ICIS automotive topic page
Some UAW locals reject US Big Three contract offer, but leadership says still on track for approval
HOUSTON (ICIS)–Membership at another United Auto Workers (UAW) local voted against ratifying a recent agreement between the union and the US Big Three automakers on Tuesday, but the union president said the deal remains on track for approval. The Big Three automakers – Ford, General Motors (GM) and Stellantis – reached tentative agreements with the union recently to end the six-week strike, but the deal needs to be approved by the rank-and-file membership before it becomes final. Union workers at GM’s Spring Hill plant in Tennessee joined membership at Local 862 in Louisville, Kentucky, and Local 598 in Flint, Michigan, in voting against ratification. UAW President Shawn Fain told reporters in Washington, DC, on Tuesday that the agreement remains on track for approval. While each individual local votes on the tentative deal, it is the total combined vote from membership across all locals that determines if it is accepted or not. The UAW is keeping a vote tracker to follow progress of ratification votes at the 49 locals across the country. As of Tuesday afternoon, the tracker shows the overall vote at 52% for ratification and 48% against. Results have yet to be recorded for 22 of the 49 locals, according to the tracker. IMPACT ON CHEMICALS The petrochemical industry is closely monitoring the situation because an extended strike would massively disrupt demand for polymers as a typical vehicle contains nearly $3,950 of chemistry including chemical products and chemical processing. The UAW strike likely slashed monthly polymers demand from the Big Three by 26,000 tonnes for polypropylene (PP), 11,000 tonnes each for polyurethanes (PU) and nylon, and 5,000 tonnes each for acrylonitrile-butadiene-styrene (ABS) and polyvinyl chloride (PVC), based on H1 2023 volumes, according to an analysis of industry data obtained by ICIS. Virtually every component of a light vehicle, from the front bumper to the rear taillights, features some chemistry, according to Kevin Swift, ICIS senior economist for global chemicals. The latest data indicate that polymer use is about 437lb (198kg) per vehicle, Swift said. Please also visit the ICIS automotive topic page.
Hyundai starts building $1.5bn electric vehicle plant in South Korea
SINGAPORE (ICIS)–Hyundai Motor Co has started construction of a new electric vehicle (EV) manufacturing plant in Ulsan, South Korea, whose total project cost is Korean won (W) 2tr ($1.5bn). Construction of the plant, which will be able to produce 200,000 units annually, will be completed in 2025, with mass production due to begin in the first quarter of 2026, South Korea’s top carmaker said on 13 November. The new EV plant is being built at Hyundai’s Ulsan complex, which is currently the largest single automobile manufacturing plant in the world with an annual capacity of 1.4m units, including EVs. EVS ATTRACT HEAVY INVESTMENTS Hyundai intends to invest a total of W24tr in the domestic EV industry through to 2030 amid the rapid market growth around the world, fuelled by increasingly strict regulations on emissions. Consumer demand for EVs is also growing as these as environment-friendly and deemed to perform better than vehicles that run on combustion engines. In April, its affiliate carmarker Kia Corp started construction of a W1tr EV-only plant in Hwaseong in Gyeonggi province with an annual production capacity of 150,000 units. Start-up is slated in 2025. Hyundai Motor is also venturing overseas to expand its EV business. In Saudi Arabia, the Korean carmaker intends to build a manufacturing plant in joint venture with the Middle Eastern country’s Public Investment Fund (PIF). The proposed plant will manufacture both internal combustion engines and electric vehicles, with total investment cost expected to exceed $500m. In the US, the company broke ground in June at a $5.5bn project to build an EV and battery plants in Georgia. Hyundai Motor has a $7.3bn investment plan to develop EV batteries over the next decade. CHEMICAL PLAYERS TAP INTO GROWING EV MARKET The batteries and EV markets are important growth opportunities for the chemical industry, whose growing number of players are developing battery materials, as well as specialty polymers and adhesives for EVs. At the same time, the automotive industry is a major global consumer of petrochemicals, which account for more than a third of an average vehicle’s raw material costs. The automotive sector drives demand for chemicals such as polypropylene (PP), along with nylon, polystyrene (PS), styrene butadiene rubber (SBR), polyurethane (PU), methyl methacrylate (MMA) and polymethyl methacrylate (PMMA). South Korean chemical producers such as LG Chem and SK Group in recent years split off their lithium-ion (Li-ion) battery production businesses into separate entities to capitalise in the growing EV battery market. ($1 = W1,326) Focus article by Nurluqman Suratman Click here to view the Automotive – impact on chemicals topic page
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