Ethylene vinyl acetate (EVA)

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Discover the factors influencing ethylene vinyl acetate (EVA) markets

Ethylene vinyl acetate (EVA) has a wide range of foaming and packaging applications. It can also be used in hoses and tubes, adhesives, wire and cable insulation, as a coating for heat sealing and for encapsulation in solar cells, according to the ratio of ethylene to VA.

With coverage of Asia-Pacific, Europe and the US, alongside multiple Chinese quotes, ICIS became the first company to provide global EVA pricing in 2022. Gain an in-depth, comprehensive view of the EVA market and its drivers, including a weekly outlook for polyethylene (PE), acetic acid and vinyl acetate monomer (VAM).

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Ethylene vinyl acetate (EVA) news

UPDATE: SCG invests $700 million in Vietnam’s LSP ethane enhancement project

SINGAPORE (ICIS)–Thailand’s Siam Cement Group (SCG) will invest $700 million to pave the way for Vietnam’s first integrated petrochemical complex to use US ethane as feedstock for production. Project completion slated in end-2027 Ethane to account for as much as two-thirds of LSP cracker feedstock Bulk of investments go toward handling/storage of ethane The project, which will mean increased feedstock diversification for its wholly owned Vietnamese subsidiary Long Son Petrochemicals (LSP), is expected to be completed by the end of 2027, SCG said in a bourse filing on 30 October. LSP is currently working with Vietnamese authorities to acquire necessary certificates and permits to build storage and supporting facilities at the complex in Bah Ria-Vung Tao province in southeastern Vietnam. The cracker at the site can produce 950,000 tonnes/year of ethylene, 400,000 tonnes/year of propylene, and 100,000 tonnes/year of butadiene (BD). Once the ethane enhancement project is completed, LSP will be able to utilize ethane for as much as two thirds of its total feedstock, in addition to propane and naphtha. By utilizing imported ethane from the US as raw material, “LSP can significantly enhance its competitiveness through lower feedstock cost and flexibility, while also lowering carbon emissions”, SCG said. Majority of the investment will go toward handling and storage of the ethane feedstock, which requires temperature as low as minus 90-degree Celsius, it said. LSP was completed at a cost of $5.2 billion whose commercial operations began on 30 September 2024 "following a comprehensive test period", SCG said. The Thai conglomerate first announced the plan to use US ethane as feedstock for LSP in September, noting that over the past three years, its average price has been lowered by around 40% compared with those of naphtha and propane. Most crackers in Asia use naphtha as feedstock whose prices track highly volatile upstream crude movement. “In light of the existing petrochemical trough with historical low margin, and current volatile global economic environment, LSP is closely monitoring the market situation and will adjust the run rate of its operation during this challenging period for petrochemical business,” SCG said. Focus article by Pearl Bantillo (adds details throughout) Initial reporting by Fanny Zhang Thumbnail image: Container cargo ships unload at a port in Hai Phong, Vietnam on 25 May 2015. (Minh Hoang/EPA/Shutterstock)

31-Oct-2024

UPDATE: Japan's Sumitomo Chemical trims fiscal H1 net loss; eyes LDPE output cut

SINGAPORE (ICIS)–Sumitomo Chemical trimmed its fiscal H1 to September 2024 net loss to Japanese yen (Y) 6.5 billion ($42 million), aided by sales growth of about 5%, while it seeks to rationalize operations to boost profitability. Return to profit expected for year-to-March 2025 IT-related chemicals' fiscal H1 core operating profit more than doubles Chiba Works LDPE output to fall by 20,000 tonne/year in billion yen (Y) Apr-Sept 2024 Apr-Sept 2023 % change Yr-to-March 2025 (revised forecast) Yr-to-March 2024 (actual) Sales revenue     1,241.4     1,186.9             4.6 2,600.0 2,446.9 Core operating profit           29.5        -96.7 – 100.0 -149.0 Operating income         121.2      -133.7 – 180.0 -488.8 Net income           -6.5         -76.3 – -25.0 -311.8 Revenues for the period increased on higher selling prices of synthetic resins,  methyl methacrylate (MMA) and various industrial chemicals due to higher raw material prices, the company said in a statement. Sumitomo Chemical's Essential Chemicals & Plastics segment posted a lower core operating loss of Y36.7 billion, with sales up by 3.3% year on year to Y403 billion, it said. However, it noted that earnings were weighed down by a deterioration in the financial performance of its 37.5%-owned affiliate Saudi Arabia's Rabigh Refining and Petrochemical Co. Meanwhile, IT-related chemicals posted a 10% increase in sales to Y224.3 billion, with core operating income more than doubling to Y37.5 billion, on the back of strong demand for display-related materials and processing materials for semiconductors, it said. For the whole of fiscal year ending March 2025, Sumitomo Chemical lowered its sales forecast by Y70 billion to Y2.6 trillion, but raised its net profit forecast by Y5 billion to Y25 billion. The forecast marks a return to profitability for Sumitomo Chemicals, which incurred a Y312 billion net loss in the previous fiscal year. LDPE OUTPUT CUT BY END-MARCH 2025In a separate statement on 29 October, the company announced plans to reduce its low density polyethylene (LDPE) production at Chiba Works by 20,000 tonnes/year, citing declining domestic demand. Operations at a portion of the company’s LDPE facilities at the site will be suspended by March 2025 – the end of its current fiscal year. Sumitomo Chemical has an LDPE plant in Chiba prefecture with a 172,000 tonne/year capacity, according to ICIS Supply and Demand Database. “The company expects this measure, combined with the various rationalization efforts that it has implemented thus far, to lead to improving the overall operating rate of the remaining facilities,” Sumitomo Chemical said. Japan’s LDPE demand “is not anticipated to have significant future growth”, it said, citing a declining population and an ageing society with a low birth rate. Sumitomo Chemical said that it is “accelerating business restructuring as part of its short-term intensive performance improvement measures”. Other measures include improving the company’s product portfolio “to cater to high value-added areas”, as well as working on fixed cost reduction at its remaining facilities, including a joint study with Maruzen Petrochemical to optimize operations of their joint venture Keiyo Ethylene. The Japanese producer said that it “will steadily advance these measures to ensure a V-shaped recovery in fiscal 2024, while also carrying out fundamental structural reforms”. Focus article by Pearl Bantillo ($1 = Y153.3) (adds paragraphs 8-15 with recasts throughout)

30-Oct-2024

PODCAST: Europe oxo-alcohols, derivatives endure weak demand amid economic woes, geopolitical tensions

LONDON (ICIS)–Throughout October, demand in the European oxo-alcohols and derivatives markets has been slow-paced and below initial expectations. Sluggishness is expected to persist throughout the remainder of Q4, influenced by various factors including wider economic weakness, geopolitical tensions, and end-of-year destocking. Butyl acetate reporter Marion Boakye speaks to oxo-alcohols reporter Nicole Simpson, glycol ethers reporter Cameron Birch and acrylate esters reporter Mathew Jolin-Beech about market dynamics down the oxo-alcohols value chain.  

29-Oct-2024

Americas top stories: weekly summary

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 25 October. Earlier unplanned outages contributing to tight US MEG, DEG supply in Q4 US monoethylene glycol (MEG) and diethylene glycol (DEG) spot availability is expected to remain snug through Q4, while concerns are growing for triethylene glycol (TEG) supply as peak season begins. US Sherwin-Williams expects choppy H1, sees signs of consumer weakness Sherwin-Williams expects demand during the first half of 2025 will remain choppy while the company waits for what it expects will be an inevitable inflexion point for demand for its products, the US-based paints and coatings producer said on Tuesday. Mexico's Orbia lowers 2024 guidance, PVC group reports flat Q3 income Orbia's vinyls business reported on Wednesday that Q3 operating income was flat year on year amid lower costs for ethylene and electricity as well lower volumes and prices. Styrolution to permanently shutter Sarnia styrene plant next year INEOS Styrolution has decided not to restart its 445,000 tonnes/year styrene production plant in Sarnia, Ontario, Canada, and will permanently shut it down by early Q4 2025, the company announced Thursday. Chlor-alkali demand benefited from hurricanes, new pulp plants – OlinDemand for chlorine derivatives and caustic soda benefited from US hurricanes and two new pulp and paper plants that opened in South America, which provided some bright spots in what has otherwise been a challenging market due to the slowdown in home building and durable goods, US-based Olin said on Friday.

28-Oct-2024

Mexico's Orbia lowers 2024 guidance, PVC group reports flat Q3 income

HOUSTON (ICIS)–Orbia's vinyls business reported on Wednesday that Q3 operating income was flat year on year amid lower costs for ethylene and electricity as well lower volumes and prices. The following shows the financial performance of the company's Polymer Solutions segment, which includes the Vestolit and Alphagary businesses. Figures are in millions of dollars. Q3 24 Q3 23 % Change total sales 634 677 -6% Operating income 23 23 0 EBITDA 90 86 5% Source: Orbia Orbia attributed the rise in the segment's EBITDA to lower costs as well as the company's efforts to optimize production and fixed costs. Orbia attributed the declines in volumes to challenging business conditions. COMPANY LOWERS GUIDANCEFor Orbia as a whole, the company expects to report $1.10 billion to $1.15 billion in earnings before interest, tax, depreciation and amortization (EBITDA), down from its earlier guidance of $1.30 billion. Orbia lowered its guidance because the market had not recovered as the company had expected. The company's other segments include the following: Building & Infrastructure, which includes the Wavin business. It makes pipes and fittings. Connectivity Solutions, which includes the Dura-Line business. It makes telecommunications conduit, cable-in conduit and similar products. Precision Agriculture, which includes the Netafim business. It makes irrigation systems. Fluor & Energy, which includes the Koura business. It mines fluorspar and makes fluorine derivatives. Thumbnail shows PVC pipe. Image by Shutterstock.

23-Oct-2024

US Sherwin-Williams expects choppy H1, sees signs of consumer weakness

HOUSTON (ICIS)–Sherwin-Williams expects demand during the first half of 2025 will remain choppy while the company waits for what it expects will be an inevitable inflexion point for demand for its products, the US-based paints and coatings producer said on Tuesday. "The single largest variable heading into next year is the timing and pacing of a true inflexion in the demand environment," said Heidi Petz, CEO. She made her comments during an earnings conference call. "It is only a question of when, not if." Until that inflexion comes, Sherwin-Williams expects demand will remain choppy. During the third quarter, demand from consumers undertaking do-it-yourself (DIY) improvement projects remained soft, a trend also noted by RPM International, a company that makes coatings, adhesives and sealants. Sherwin-Williams attributed the softness for its DIY products to weaken existing home sales and inflation. For auto refinish products, insurance claims have fallen because consumers are reluctant to pay deductibles to get their vehicles repaired after accidents, Petz said. PPG also noted a decline in insurance claims. Near term, Sherwin-Williams warned about the possibility that its industrial customers could undergo extend holiday shutdowns. The company did not provide more details. However, US-based paints and coatings producer PPG did note that automobile original equipment manufacturers (OEMs) started taking unscheduled and prolonged downtime in the third quarter, and the trend should continue in the fourth quarter. DEMAND FROM HURRICANE REPAIRSHurricanes initially lower demand because they shut down paint stores and customers cannot immediately return to work. Ultimately, demand does rise after customers assess damage and pursue insurance claims. After about four weeks, demand for primers increases, Sherwin-Williams said. Sundries and paint then follow. Forecasting the effects of Hurricanes Helene and Milton are difficult because they hit weeks apart in the third and fourth quarters. TALK OF RENOVATION RESURGENCELonger term, the US could see a resurgence of home renovation projects, said Jim Jaye, senior vice president of investor relations. One of the economic indicators tracked by Sherwin-Williams is the Leading Indicator of Remodeling Activity (LIRA), which is published by the Joint Center for Housing Studies of Harvard University. According to LIRA, spending for improvements and repairs on homes should expand once again by the middle of 2025. Economic growth, expected declines in inflation and higher home equity could encourage homeowners to undertake repairs and remodeling, he said. Paints and coatings are important end markets for many petrochemicals and resins. Titanium dioxide (TiO2) is used as a white pigment and to make paints opaque. Solvents used in paints and coatings include ethyl acetate (etac), butyl acetate (butac) and methyl ethyl ketone (MEK). Polyurethane coatings are made with polyols and isocyanates such as methyl diphenyl diisocyanate (MDI). Acrylic based coatings are made with methyl methacrylate (MMA), and epoxy coatings are made with epoxy resins. Other chemicals used in paints and coatings include isopropanol (IPA) and vinyl acetate monomer (VAM). Thumbnail shows paint, one of the products made by Sherwin-Williams. Image by Oleksandr Latkun/imageBROKER/Shutterstock.

22-Oct-2024

Asia top stories – weekly summary

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 18 October. China VAM exports may slow throughout October By Hwee Hwee Tan 14-Oct-24 16:55 SINGAPORE (ICIS)–Persistent increases in China’s vinyl acetate monomer (VAM) domestic prices have pushed up spot export offers, dampening buying interest for Chinese cargoes in Asia this month. China Sept crude imports dips 0.6 on year; down 7.4% on month By Fanny Zhang 14-Oct-24 17:51 SINGAPORE (ICIS)–China’s crude oil imports in September totaled 45.5 million tonnes, down by 0.6% year on year and lower by 7.4% from the previous month, official data showed on Monday. India Sept inflation at nine-month high; Aug industrial output shrinks By Priya Jestin 14-Oct-24 22:46 MUMBAI (ICIS)–India’s retail inflation hit a nine-month high of 5.49% in September, mainly on firmer food prices, while the country’s industrial output in August shrank for the first time in 22 months. Oil prices fall by more than $3/barrel on abating Mideast tensions By Nurluqman Suratman 15-Oct-24 14:57 SINGAPORE (ICIS)–Oil prices fell by over $3/barrel on 15 October on moderating concerns over potential supply disruptions, following news that Israel may refrain from targeting oil facilities in Iran. Asia fatty alcohols demand to remain firm near term despite proposed EUDR delay By Helen Yan 15-Oct-24 16:41 SINGAPORE (ICIS)–Asia’s fatty alcohol mid-cuts demand is expected to remain firm in the near term despite the proposed one-year delay in the implementation of the EU Deforestation Regulation (EUDR). Asian synthetic rubber discussions in limbo as buy-sell differences deepen By Ai Teng Lim 16-Oct-24 13:28 SINGAPORE (ICIS)–Spot trade liquidity for Asian spot imports of various synthetic rubbers, from styrene-butadiene-rubber (SBR), polybutadiene rubber (PBR) and acrylonitrile-butadiene-rubber (NBR), are tapering amid widening differences in near-term pricing outlook between buyers and sellers. Asia BG demand expected to stay weak in Q4 By Joy Foo 17-Oct-24 13:22 SINGAPORE (ICIS)–The gap between China and southeast Asia butyl glycol (BG) import markets narrowed in October as lackluster demand has weighed down southeast Asia's import discussions. India petrochemicals demand subdued pre-Diwali; weak rupee effects unclear By Jonathan Yee 18-Oct-24 13:00 SINGAPORE (ICIS)–India's petrochemicals demand is losing momentum, hindered by the prolonged monsoon season, economic uncertainty, and volatile crude prices.

21-Oct-2024

PODCAST: Asia C2 players kick off 2025 contract talks in China

XIAMEN, China (ICIS)–With 2025 contract discussions underway for Asia ethylene (C2), ICIS markets editor Josh Quah outlines the top concerns of industry players as they look ahead to the coming year. Players may take steps to hedge against unpredictability of deep-sea cargoes China’s long domestic supply may not yet boost exports by much Producers keen on ethane to be part of cracker feedstock slate

18-Oct-2024

Florida power outages approach 3.4 million after Hurricane Milton

HOUSTON (ICIS)–Nearly 3.4 million outages have been reported in Florida in the aftermath of Hurricane Milton, which made landfall as a powerful Category 3 hurricane near Sarasota, Florida, south of the important fertilizer hub of Tampa. Milton may have caused more damage had it passed over Tampa, according to CoreLogic, an insurance data company. RAIL UPDATERailroad company CSX said it has relocated all of its locomotives and cars from low-lying areas in Tampa and rerouted them. CSX operations will continue in and out of Waycross from the north, east and west directions. It will continue operating into and out of the intermodal ramps at Jacksonville, Florida. On 8 October, CSX said it had taken the following steps. Closed the Central Florida ILC intermodal gate. Closed the Tampa, FL intermodal gate. Closed the TRANSFLO terminals at Tampa, Tampa Port and Sanford. Another railroad company, Norfolk Southern, has not updated its notice from 7 October, when it said it was monitoring and preparing for Hurricane Milton. FLORIDA PORTS REMAIN CLOSEDMany ports in Florida have maintained their Zulu port conditions, which means they are closed to inbound and outbound vessels. The following table summarizes the conditions among the major ports in Florida. Port Status Condition Port of Pensacola Open Normal Port Panama City Open Draft restrictions Port St Joe Open Normal Port Tampa Bay Closed Zulu SeaPort Manatee Closed Zulu PortMiami Open Yankee Port Everglades Open Yankee Port of Palm Beach Closed Zulu Fort Pierce Closed Zulu Port Canaveral Closed Zulu Jaxport Closed Zulu Port of Fernandina Closed Zulu Source: US Coast Guard. IMPACT ON FERTILIZERS, PHOSPHATES, CHEMSFor chemicals, there is some epoxy resin, phenolic resin and unsaturated polyester resin (UPR) production in Lakeland and Kathleen, Florida. Milton will make landfall far from Pensacola, Florida, which has plants that make nylon and thermoset resins. Tampa is an important hub for the US fertilizer industry, hosting corporate offices, trading, product storage, shipping and other logistical operations. Fertilizer producer Mosaic has its headquarters in Tampa. The company has not issued any statements regarding its corporate operations. A source at the fertilizer company Yara said it was shutting down its Tampa offices to comply with the evacuation orders. Near Tampa is Florida's phosphate mining operations in Bone Valley, which covers parts of Hardee, Hillsborough, Manatee and Polk counties. In all, Florida has 27 phosphate mines, of which nine are active, according to the Florida Department of Environmental Protection. Canadian fertilizer producer Nutrien has yet to restart its White Springs phosphate operations following Helene, an earlier hurricane that made landfall farther north in Florida’s Big Bend region. On 30 September, Mosaic said its Riverview operations were off line following water intrusion from a storm surge caused by Hurricane Helene. POSSIBLE DAMAGEHurricane Milton could be extremely destructive because of its winds, rainfall and storm surge. It will pass over the following metropolitan statistical areas. Region Population Tampa 3,342,963 Orlando 2,817,933 Jacksonville 1,713,240 Sarasota 910,108 Source: US Census Bureau CoreLogic, the insurance data company, said Milton’s shift to the south of Tampa could limit the magnitude of insured losses. CHEMS AND RECONSTRUCTIONFor hurricanes in general, reconstruction can translate into increased demand for many chemicals and polymers. The white pigment titanium dioxide (TiO2) is used in paints. Solvents used in paints and coatings include butyl acetate (butac), butyl acrylate (butyl-A), ethyl acetate (etac), glycol ethers, methyl ethyl ketone (MEK) and isopropanol (IPA). Blends of aliphatic and aromatic solvents are also used to make paints and coatings. For polymers, expandable polystyrene (EPS) and polyurethane (PU) foam are used in insulation. PUs are made of methylene diphenyl diisocyanate (MDI), toluene diisocyanate (TDI) and polyols. High-density polyethylene (HDPE) is used in pipes. Polyvinyl chloride (PVC) is used to make cladding, window frames, wires and cables, flooring and roofing membranes. Unsaturated polyester resins (UPRs) are used to make coatings and composites. Vinyl acetate monomer (VAM) is used to make paints and adhesives.

10-Oct-2024

INSIGHT: After Milton, global chems face future of rapidly intensifying hurricanes

HOUSTON (ICIS)–Warmer waters in the Atlantic Basin could make record-setting hurricanes like Milton and Beryl more common, which strengthened rapidly to become major storms that caused significant damage. Most of the petrochemical and refining capacity of the US is along the Gulf of Mexico, making the plants vulnerable to the disruptions caused by more powerful hurricanes that could become more common in the future. Rising exports of energy, chemical feedstock and plastics from the US Gulf Coast have caused local hurricanes to have global consequences. If wind shear becomes more common, then it could offset some of the strengthening effects that warmer water will have on hurricane development. RECORD-SETTING HURRICANE SEASONWarm water is like rocket fuel for tropical storms and hurricanes, and that led to the rapid intensification of Milton, which strengthened from a tropical storm into a Category 5 hurricane in less than two days. By midday on Monday, the rapid strengthening of Milton placed it among the top three Atlantic hurricanes, behind only 2005's Hurricane Wilma and 2007's Hurricane Felix, said Alex DaSilva, lead hurricane expert at the meteorology company AccuWeather. Milton had set another record as the strongest hurricane to occur in the Gulf of Mexico, according to Levi Silvers, research scientist at the Department of Atmospheric Sciences at Colorado State University, which publishes regular hurricane forecasts. Milton was also the Gulf's strongest hurricane since Rita in 2005, Silvers said. Milton would weaken to a Category 3 hurricane before making landfall on Wednesday night. AccuWeather estimates that Milton could cause more than $200 billion in damage and economic loss. Earlier on July 2, Beryl set its own record by becoming the earliest Category 5 hurricane to form in the Atlantic basin, beating the previous record holder by an astounding two weeks, DaSilva said. According to Silvers, Beryl also accumulated more cyclone energy than any other storm occurring before August. "Basically, it was the strongest early storm we have had by several measures." After forming in the Atlantic Beryl weakened after passing over Mexico's Yucatan peninsula before making landfall in Texas and disrupting operations at several petrochemical plants. AccuWeather estimated that total damage and economic loss caused by Beryl was $28 billion to $32 billion. Hurricane Helene set a record for the amount of available atmospheric moisture, also known as precipitable rain, according to AccuWeather. Such extreme amounts of moisture allowed Helene to carry it far inland, leading to rapidly rising river levels and flash flooding. AccuWeather estimates that Helene caused $225 billion to $250 billion in damage and economic loss in Florida, Georgia and the Carolinas. WARM WATER THREATSIf the planet continues to warm, one of the consequences would be elevated water temperatures. Warmer waters contributed to the strength and rapid intensification of these three hurricanes, DaSilva said. The danger is not just the surface temperature of the Atlantic but also something that meteorologists call ocean heat content, DaSilva said. Ocean heat content reflects water temperatures below the surface. A warmer planet will also heat up the atmosphere, allowing the air to hold more moisture. That would lead to more rainfall and greater risks of floods. "I am concerned that we are going to be seeing more episodes of rapid intensification," DaSilva said. "The tie between sea surface temperatures and rapid intensification – we are pretty confident about that." Silvers also expressed concern about the threat posed by elevated water temperatures. WIND SHEAR REMAINS UNKNOWN VARIABLEMeteorologists are less sure if wind shear could become more common in a warmer planet, DaSilva said. Wind shear usually discourages the formation of tropical weather. If wind shear does become more common, it could partially offset the effects of warmer water. In a world with more wind shear, it might not generate more hurricanes, but those that do form will strengthen rapidly into more powerful storms, DaSilva said. The length of the Atlantic hurricane season could also expand by starting sooner than the current June 1 date, DaSilva said. DaSilva doubts that the Atlantic season would last beyond its November 30 end date, because wind shear becomes more common during the final months of the year. Silvers, though, said it is difficult to determine if the timing of Atlantic storms will change in the future. "This season is a perfect example, with record breaking storms before and after the peak of the season, but almost nothing during the historical peak," Silvers said. MORE DISRUPTIONS FOR US, GLOBAL CHEMICALSMost of the petrochemical plants and refineries in the US are on the Gulf Coast, so more powerful hurricanes would leave them more vulnerable to damage and shutdowns. The US now exports significant amounts of polyethylene (PE), polyvinyl chloride (PVC), vinyl chloride monomer (VCM) and other chemicals. Hurricanes disrupt port operations, so those exports could be delayed, increasing the risk of global shortages. DISRUPTIONS TO WORLD'S CHEMICAL FEEDSTOCKSIn addition, the US is increasingly relying on exports to take away excess ethane and liquefied petroleum gas (LPG) produced from its oil fields. These petrochemical feedstocks are being imported by an increasing number of crackers and propane dehydrogenation (PDH) units, with GAIL (India) became the latest to announce plans to build an ethane cracker. Nearly all of the terminals that handle these exports of ethane and LPG are on the Gulf Coast, and all of the expansion projects are in the region. Hurricanes could disrupt operations at these terminals and interrupt the supply of these feedstocks to crackers and PDH units throughout the world. HURRICANES DISRUPT US LNG TERMINALSThe majority of US LNG capacity is on the Gulf Coast and its preponderance will only increase as the country starts up more terminals. This will have effects on US and global energy prices. Disruptions in global shipments could raise LNG costs. In the US, extended shutdowns of LNG terminals would increase supplies of natural gas, pushing prices lower for it and ethane. Lower ethane prices in the US could increase margins for ethylene derivatives. DISRUPTIONS TO US OIL EXPORTSThe Gulf Coast is a large exporter of oil, with major terminals in Corpus Christi, Houston and Nederland in Texas. In addition, the Gulf Coast is home to the Louisiana Offshore Oil Port (LOOP), the only deepwater crude port in the US. Companies are planning more offshore ports. Enterprise Products received a deepwater port license for its Sea Port Oil Terminal (SPOT), which could load 2 million bbl/day of crude oil. If built, it would be built 30 nautical miles off the Texas coast. In 2020, Phillips 66 and Trafigura Group announced that they created a 50/50 joint venture called Bluewater Texas Terminal to develop an offshore deepwater oil port 21 nautical miles east of the port of Corpus Christi. Energy Transfer is proposing its Blue Marlin Offshore Port, which could load up to one very large crude carrier (VLCC) per day. Texas GulfLink, a subsidiary of Sentinal Midstream, is developing a deepwater oil terminal off the Gulf Coast. If built, these offshore oil ports would be vulnerable to hurricanes, along with the onshore terminals on the Gulf Coast. That could restrict global oil supplies and push prices higher. Higher prices would increase costs for crackers that use naphtha as a feedstock. Insight article by Al Greenwood Thumbnail shows damage caused by Hurricane Milton. Image by Chris Urso/Tampa Bay Times/ZUMA Press Wire/Shutterstock

10-Oct-2024

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