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Demand and supply chain challenges have the potential to cause shortages in the epoxy resins market. Scarcity of supply can be caused by plant closures, extreme weather conditions, logistics issues, and increases in crude oil prices can all force downstream manufacturers to delay production or find alternatives.
The main applications for epoxy resins include adhesives, high-performance coatings into construction, protective industrial and marine coatings, electrical/electronic laminates and adhesives, and structural parts for the automotive, aerospace, and aircraft industries. They are high-performance thermosetting resins with excellent adhesion, chemical and heat resistance, plus electrical insulating properties.
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Americas top stories: weekly summary
HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 23 February. LyondellBasell to lease California plant to produce recycled resins from waste LyondellBasell has acquired a recycling plant in California from PreZero in which it plans to produce post-consumer recycled resins from plastic waste, the US chemicals major said on Tuesday. Brazil’s Unigel gets green light from creditors for debt restructuring Unigel has agreed a Brazilian reais (R) 3.9 billion ($791 million) debt restructuring with its creditors, which has saved the beleaguered styrenics, acrylics and fertilizer producer from filing for bankruptcy for the time being. Mexico's Orbia to pause PVC investments after weak Q4 results Orbia will be pausing polyvinyl chloride (PVC) capacity expansion due to weak market economics which weighed on its 2023 earnings, the Mexico-based producer said. US Huntsman expects gradual recovery, seeks to boost prices and volume Huntsman expects a gradual recovery to take hold in 2024, in which the company will attempt to pursue higher prices and recover share, the CEO said on Thursday. Pembina to supply Dow Canada net-zero petchem project with ethane Canadian midstream energy firm Pembina Pipeline has entered into long-term agreements to supply Dow’s upcoming net-zero petrochemicals project at Fort Saskatchewan in Alberta province with 50,000 bbl/day of ethane.
Latin America stories: weekly summary
SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 23 February. NEWS Argentina manufacturing output falls 12% in December Argentina’s recession is hitting the petrochemicals-intensive manufacturing sectors hard, with output down 11.9% in December, year on year, the country’s statistics body Indec said late on Thursday. Mexico’s secondary activities output up 1.2% year on year in December Output in Mexico’s petrochemicals-intensive secondary activities rose in December by 1.2%, year on year, the country’s statistics office Inegi said this week. Pause in PVC projects ‘prudent’ until prices rise to $1,200/tonne – Orbia CEO Depressed global polyvinyl chloride (PVC) prices prompted Orbia to take the “prudent” decision to put new projects on hold, the CEO of the Mexican chemical producer said on Thursday. Petrochemicals margins could worsen in 2024 – Mexico’s Alpek Mexican chemicals producer Alpek’s stock was falling more than 3% on Wednesday afternoon after the company issued a downbeat guidance for 2024 in which petrochemicals margins could worsen from the already weak 2023 averages. Brazil's Braskem Q4 main chemicals, resins sales fall on lower demand Braskem’s main chemicals and resins sales in its domestic market fell by 15% and 9%, respectively, in the fourth quarter, year on year, on the back of persistent poor demand, the Brazilian petrochemicals major said this week. Brazil’s Unigel gets green light from creditors for debt restructuring Unigel has agreed a Brazilian reais (R) 3.9 billion ($791 million) debt restructuring with its creditors, which has saved the beleaguered styrenics, acrylics and fertilizer producer from filing for bankruptcy for the time being. US Stepan recovering LatAm surfactants market share, margins – CEO Stepan is recovering its share in the Latin American surfactants market following supply chain disruptions in the second half of 2022, Scott Behrens, CEO of the US-based company, said on Tuesday. PRICINGLat Am PP domestic prices fall in Colombia on cheaper imports Domestic polypropylene (PP) prices were down in Colombia due to more competitive prices for imported products. In other Latin American countries, prices were steady. Lat Am PE buyers on the sidelines waiting for March prices Domestic, international polyethylene (PE) prices were assessed unchanged this week across Latin American countries. Mexico PET industry expecting stable sales during the upcoming peak bottle season Polyethylene terephthalate (PET) prices in Mexico held steady this week, with weak demand and ample supply in February. Brazil ethanol sales continue to face positive results in 2024 According to Unica, Brazil's ethanol sales grew by 38.22% in January over the same time frame in 2023. With this achievement, sales volume has surpassed its highest point since October 2020.
LyondellBasell to lease California plant to produce recycled resins from waste
SAO PAULO (ICIS)–LyondellBasell has acquired a recycling plant in California from PreZero in which it plans to produce post-consumer recycled resins from plastic waste, the US chemicals major said on Tuesday. Financial details were not disclosed. The plant will be fully taken over by LyondellBasell in 2025. It will have a production capacity of 50 million pounds/year (25,000 tonnes/year) of recycled resins. “The transaction includes leasing the processing facility in Jurupa Valley, California … LYB will offer these recycled polymers under its CirculenRecover brand, part of the company's Circulen portfolio of products that enable the circular economy,” it added. LyondellBasell’s Executive Vice-President for the circular economy, Yvonne van der Laan, added the company was aiming to “build upon our existing experience in plastic recycling in Europe” to meet US’ growing demand for recycled products. In October 2023, LyondellBasell acquired a 25% stake in Cyclyx, a joint venture between energy major ExxonMobil and Agilyx. Additional reporting by Emily Friedman Thumbnail shows bales of recycled plastic. Image by Shutterstock.
INSIGHT: 2023 marks first year as US net plastic scrap importer, driven by PET imports increasing 33% year on year
HOUSTON (ICIS)–2023 was a year of record changes within US plastic scrap trade. While some relationships remain steadfast, such as the plastic scrap trade between North American partners Canada, Mexico and the US, other relationships are growing in strength, such as US importing activity from Asia, particularly for polyethylene terephthalate (PET) plastic scrap. US becomes net importer of plastic scrap for the first time US PET scrap imported increase 33% year on year Canada, Mexico comprise 55% of US scrap exports, 58% of US scrap imports Full year trade data from the US Census Bureau shows US imports of plastic scrap – noted by the HS code 3915- continue to increase, having jumped 5% year on year to a total of 446,778 tonnes in 2023. Plastic scrap imports include items such as used bottles, but also other forms of recycled feedstock such as purge, leftover pairings and now also flake material. This comes at a time when domestic market conditions for recycled plastics are mixed. Many grades of plastic which are used for cost-sensitive applications, such as those which go into construction materials or durable good and packaging, have seen a severe withdrawal of demand, as low cost virgin material continues to flood the market. Even grades of sustainability driven recycled plastics, such as those going into consumer goods applications like beverages and personal care, have seen weaker market conditions domestically, as customers switch to imported recycled resin. Supporting the increase in imported scrap plastic, US recyclers who continue to have strong order volumes were heard to be supplementing their operations with imported feedstock. Several recyclers now purchase cheap spot or imported R-PET flake to process into their food grade pellet product and redirect their internally produced flake from high cost domestic bale feedstock to sell directly to customers. In the long term, the US will seek imports of bale or flake feedstock not just due to the cost driver but to feed growing plastic recycling capacities amid stagnant plastic collection rates domestically. Intra-North American recycled plastic trade relationships continue to show strength, as Canada and Mexico not only dominate as the origin location of plastic scrap import but also as top export destinations for US plastic scrap exports. 58% of the plastic scrap imported by the US came from Canada and Mexico combined, though Mexico's volumes notably dropped year on year, down 35% compared to 2022. Picking up the slack, US plastic scrap imports from Thailand increased by 103% year on year. Thailand is now the third largest country of imported plastic scrap origin. PET imports show tremendous growth The majority of plastic scrap received from Thailand was of the PET subcategory, coming in at 23,346 tonnes, a 157% increase year on year from Thailand alone. PET imports from Thailand now make up 11% of the total US PET plastic scrap imports, trailing Canada at 29%. Thailand's PET scrap export activity to the US has grown significantly, increasing 415% by volume in comparison to 2019. Similarly, Ecuador has step-wise increased the volume of PET scrap being sold to the US market, jumping 63% year on year and 414% since 2019. Market participants confirm they have seen a notable rise in imported recycled polyethylene terephthalate (R-PET) activity from Asia and Latin America, particularly due to their cost-competitive position in light of cheaper ocean freight rates in 2023. Imported PET scrap from Canada also saw a large change, increasing 21% by volume year on year to 59,247 tonnes. When looking at the geographic regions of the top 10 origin countries of US PET scrap imports, Mexico and Canada make up 34% of volume, tied with Asian countries at 34%, then followed by Latin America at 15%, Africa 5% and non-top 10 countries at 12%. In general, PET scrap imports increased substantially in 2023, jumping 33% year on year to a record setting 204,278 tonnes in 2023. When looking at the data by comparing quarters year-on-year, it is clear the market continues to face increased volatility. This is showcased by the wide swings in import volumes since 2020, when prior, quarterly import volumes were much more stable. Polyethylene (PE) also continues to be a leading polymer type for US plastic scrap imports, coming in at 63,206 tonnes in 2023. Of that volume, Canada is by far the largest contributor at 72%. On the other hand, PE scrap exports have fallen 16% year on year, likely due to lessened manufacturing activity amid macroeconomic pressure in 2023. Plastic scrap imports continue historic downward trend Similarly , PET scrap exports fell 14% year on year to 65,556 tonnes, which was mainly driven by decreased export activity to Germany. Volumes of PET scrap sent to Germany dropped 40% year on year, down to 6,156 tonnes. This is likely attributed to the fact that both the US and European recycled plastics markets saw lackluster demand in 2023, paired with fierce competition from lower cost virgin cargoes. Contrary to that trend, exported of PET scrap to Mexico increased 15% year on year, making up 54% of all US PET scrap exports. At present, aggressive buying activity from Mexican recyclers continues to drive up US PET bale prices. Exports to Mexico have always made up a small portion of US PET bale sales from southern California or states like Texas, though the current activity has been notably strong. This is likely due to increased PET recycling capacity now in Mexico within the last year, as well as increased demand in Mexico from brand companies sourcing R-PET locally. Similar to the US, this time of year when the weather is cooler results in lower consumption of beverages and thus a tighter supply of bottles available for collection. In general, US plastic scrap exports continue to follow a downward trend since 2017, dropping another 4% year on year. This trend has resulted in the US becoming a net plastic scrap importer, as total scrap trade is import positive at 26,408 tonnes. To reinforce how significant this change is, as of 2014 the US was net exporting 1,765,917 tonnes. Among the top destination countries for US plastic scrap exports were Canada, Mexico and India, Malaysia and Vietnam, with Canada and Mexico accounting for 55% of the overall volume in 2023.
PODCAST: Sustainability, "cautiously-optimistic" outlook among key takeaways at The Packaging Conference
HOUSTON (ICIS)–Industry giants along the packaging value chain converged at The Packaging Conference this week, hoping to gain better insight into critical issues impacting the packaging space this year. Among the key topics, presenters and attendees continued to discuss innovation in sustainability, advocacy within legislation and market drivers that will steer 2024. Several presentations gave updates on innovative plastic recycling or sustainable solutions including novel recycling technologies as well as ground breaking packaging products which will enhance recyclability. Recycling processes included methanolysis, pyrolysis, enzymatic recycling and many others, including solutions for plastic waste sortation. Both presenters and attendees passionately advocated for more participation from the industry in ongoing policy talks, both at the state level in regards to extended producer legislation (EPR) which has been passed in four states and is proposed in five other states, as well as on the global stage in relation to the rapidly approaching United Nations Environment Programme (UNEP) INC 4 meeting in Ottawa Canada, happening 23-29 April 2024. When talking on market dynamics, attendees shared that they are cautiously optimistic on 2024 packaging demand. Some presenters shared statistics reinforcing the market softness felt last year, such as the fact that both carbonated soft drinks and packaged alcoholic beverage sales volumes were down, though bottled water sales volumes grew, reaching over 16 billion gallons in 2023. This is supported by the continued weakness in consumer purchasing activity when it comes to convenience stores (C-stores), which were 6% down year on year in December and 7.5% down in January year on year, according to the latest US Census data. Though 2023 packaging sales volumes were down, resin volume sales were hit even harder, as many in the chain worked through excess inventory throughout the year. That bsaid, destocking is largely agreed to be finished and so market players see 2024 as a year of similar underlying consumer demand but potentially better sales through the value chain. Tempering these predictions of a stronger year for packaging was the fact that global markets, particularly within the chemical industry, continue to show volatility, added with the fact that freight issues have laid a familiar blanket of uncertainty over the market in terms of material availability and rising costs. For more information on these topics, as well as other insights exchanged during the event, please reach out to Emily Friedman (email@example.com) or Antulio Borneo (Antulio.firstname.lastname@example.org) The Packaging Conference was hosted 12-14 February 2024 at the AT&T Hotel and Conference Center in Austin, Texas.
Avient sees end to destocking, raw material deflation to continue in H1 – execs
HOUSTON (ICIS)–While customers are managing inventories tightly as they monitor demand, Avient sees destocking coming to an end in key markets, with underlying demand starting to improve, the top executives of the US-based polymer materials company said on Wednesday. Demand improving in largest end markets, packaging and consumer, and in defense applications. CEO Ashish Khandpur and chief financial officer Jamie Beggs, speaking during Avient’s Q4 earnings call, said that packaging and consumer already benefited from slowing destocking in Q4 and that destocking “has largely come to an end” in those markets. DEMAND BY SECTOR The two markets account for more than 40% of Avient’s total sales of $3.14 billion in 2023 (Q4: $719 million). Although packaging and consumer sales were down year on year in Q4, they declined at a slower pace than in the previous quarters. Sequentially, packaging sales were down "only" 4% from Q3 and consumer sales were down 3%, despite the typical Q4 seasonality in Avient’s business, Khandpur said. At the same time, the pace of destocking in the healthcare end market has also started to slow, although Q4 sales into that market were down 9% year on year. Sequentially, Avient’s sales in healthcare were up 3% from Q3 as underlying demand from consumers in that sector remained steady, and Avient expects to see further improvements in demand in 2024. In building & construction and industrial, Avient sees continued softness. Those sectors are capital intensive and interest-rate sensitive. Telecommunications, which was the weakest end market for Avient in Q4, will likely remain soft through the first half of 2024. Meanwhile, Avient’s sales into the defense market continue to be strong, “in light of continued geopolitical tensions”, Khandpur said. DEMAND BY REGION Regionally, markets in the US and Canada, which account for 41% of Avient’s total sales, should continue to improve as consumer sentiment appears to be resilient, despite the higher interest rates. However, Avient has slightly more exposure to healthcare in the US and Canada than elsewhere, which could imply “potentially sluggish growth” in the near term, the CEO said. In the US telecommunications market, Avient expects to see stronger sales because of the $42 billion Broadband Equity Access and Deployment Program (BEAD) to expand high-speed Internet access. The boost in demand from telecoms should begin in the second half of 2024 and become more significant in 2025. Meanwhile, in the Europe, Middle East and Africa (EMEA) region (36% of Avient sales) demand is affected by consumers being cautious because of the geopolitical issues, high interest rates, and the lack of government stimulus and infrastructure spending, compared with the US. However, defense is a “bright spot” in EMEA, and destocking in packaging in the region seems to have ended. Packaging is Avient’s largest EMEA end market. For Asia (18% of Avient sales) the company has a cautious outlook due to the uncertainties in China. The company is waiting to see the effect on the economy of China’s government stimulus measures. Latin America, which currently accounts for only 5% of Avient's sales, is an important region as the company's customers are shifting production to Mexico and other countries amid the reshoring/near-shoring trend. Avient will follow its customers and if Latin America becomes a bigger manufacturing hub, the company will scale up is operations there, Khandpur said. Packaging is Avient’s largest end market in Latin America. Those sales were up year on year in Q4 and the company expects further sales growth in 2024. RAW MATERIALS Beggs noted that raw material price deflation, which supported margins in Q4, should continue to provide a benefit in the first half of 2024. The primary raw materials used in the company's segments – Color, Additives and Inks; and Specialty Engineered Materials – include polyolefin and other thermoplastic resins, titanium dioxide (TiO2), inorganic and organic pigments, specialty additives and ethylene. NO BIG M&A Meanwhile, Avient will focus on organic growth and is not likely to engage in big acquisitions as it still works to fully integrate two acquisitions. However, Khandpur would not rule out smaller, bolt-on deals. Three months ended 31 December: Q4 2023 Q4 2022 +/- % Sales 719.0 790.4 -9.0% Cost of goods sold 510.1 618.4 -17.5% Gross margin 208.9 172.0 21.5% Income/loss from continuing operations 27.6 -16.6 Net income 28.6 544.5 -94.7% Net income fell as Q4 2022 included a gain from discontinued operations of $561.5 million related to the sale of Avient’s distribution business. Thumbnail photo of Ashish Khandpur, who took over as Avient's CEO and president on 1 December 2023; photo source: Avient
US Trinseo expects another net loss in Q1, may take more actions
HOUSTON (ICIS)–Trinseo expects another quarterly net loss in the first quarter after reporting one on Monday for its fourth-quarter results. The company has already shutdown some manufacturing capacity, and the company will continue to assess whether it should do more to "increase our manufacturing network flexibility", said Frank Bozich, CEO. Any such actions would allow the company to take advantage of cost differences among different regions while also improving profitability, lowering capital expenditures and optimizing working capital, Bozich said. At the same time, the moves would allow Trinseo to continue investing in higher-value products as well as sustainable ones. The following table compares the company's Q1 guidance to its Q4 and Q1 performance during 2023. Figures are in millions of dollars. Q1 '24 Q4 '23 Q1 '23 Net loss from continuing operations 77-67 265 49 Adjusted EBITDA 40-50 20 36 Source: Trinseo “The unprecedented drop in demand we saw starting in the third quarter of 2022 has persisted, and a great deal of macroeconomic uncertainty remains," Bozich said. “We are seeing stronger order loads to begin the year following the challenges we faced in the fourth quarter, and therefore, we expect significantly higher sequential profitability in the first quarter of 2024," he said. However, the first quarter should be the one with the lowest profitability because volumes are typically lower during that time of the year and because of plant turnaounds, Trinseo said. Also, the timing of newly awarded business will contribute to lower profitability. For all of 2024, Trinseo expects a similar constrained demand environment to 2023. Shares of Trinseo rose by 1.63% in afterhours trading. Q4 PERFORMANCEThe following table shows Trinseo's Q4 performance. Figures are in millions of dollars. Q4 23 Q4 22 % Change Net sales 837.5 975.2 -14.1% Cost of sales 817.2 978.4 -16.5% Gross profit 20.3 -3.2 – Net loss * 265.0 364.3 -27.3% Adjusted EBITDA 20.2 6.3 – *from continuing operations Source: Trinseo Trinseo makes styrenics and engineered materials. Thumbnail shows spoons made of acrylonitrile butadiene styrene (ABS), one of the resins made by Trinseo. Image by ICIS.
PODCAST: Red Sea issues dominate Europe phenol, acetone and derivatives markets
LONDON (ICIS)–Red Sea shipping issues have been the hot topic in Q1, with import delays opening up domestic demand opportunities and leading to a firmer price sentiment in some markets. There has been some increase in buying in January, but underlying demand is yet to recover in a shaky macro-economic climate. Europe ICIS editors Jane Gibson (acetone and phenol), Heidi Finch (bisphenol A and epoxy resins), Mathew Jolin-Beech (methyl methacrylate) and Meeta Ramnani (polycarbonate) discuss the impact of rising sea freight and feedstock costs in the acetone, phenol and derivatives markets. Phenol and acetone markets look to downstream demand pull for support Red Sea crisis set to continue impacting MMA supply for remainder of Q1 Europe epoxy and BPA markets exposed to Red Sea issues/import delays, tendency firmer European PC suppliers benefiting from the unavailability of Asian imports Podcast editing by Meeta Ramnani
INEOS Aromatics closes one of two PX units at Texas City, Texas site
HOUSTON (ICIS)–INEOS Aromatics has closed one of its two paraxylene (PX) units at its Texas City, Texas site, according to a company spokesperson. The Texas City site houses two PX units, which are both capable of producing a total of 925,000 tonnes per year, according to an INEOS Investor Day presentation. This accounts for close to 30% of total North American PX capacity. Demand for PX has been lackluster since the beginning of Q3 last year, as downstream polyethylene terephthalate (PET) and purified terephthalic acid (PTA) demand fell following peak bottled beverage season during the summer months. Additionally, imports of PX surged in Q3 as price margins widened between domestic PX and Asia PX, as Asia PX prices dropped, incentivizing players to purchase more imported material. PX is predominantly used as a feedstock to produce PTA. Other outlets include dimethyl terephthalate (DMT), di-paraxylene, herbicides and solvents. Both PTA and DMT are used to make PET. Around 98% of PX is used to produce polyester via PTA or DMT. DMT is also used to manufacture polybutylene terephthalate (PBT) resin. Major producers of US PX are ExxonMobil, Flint Hills Resources, Indorama and INEOS Aromatics. Thumbnail shows bottles made with PET, which is produced with PX. Image by Shutterstock.
PODCAST: Europe, US epoxy markets start to firm amid shipping crisis, margin struggles
LONDON (ICIS)–After a prolonged period of stagnation in Europe and the US, epoxy resins markets are showing signs of firming. Domestic demand potential has increased, driven in part by shipping issues limiting Asian imports. ICIS senior editors for Europe and the US Heidi Finch and Tarun Raizada analyse the latest trends, including: Europe price talks firmer for February US sentiment mixed for February in a still competitive market Supply no concern, but closely watched Podcast edited by Meeta Ramnani
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