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Methanol is primarily produced from surplus coal and natural gas and used to produce methyl tertiary butyl ether (MTBE), acetic acid, and formaldehyde. It has many general solvent and antifreeze applications and can be used to fuel internal combustion engines, although it is usually blended with gasoline.

Formaldehyde is used in pressed wood products, disinfectants and adhesives. It is also used to make chemicals for construction, automotive, healthcare and consumer products and applications. The Asia-Pacific region accounts for more than 60% of global consumption of formaldehyde and the construction industry is the largest global consumer by sector.

Market growth is propelled by growing demand for alternative fuel applications and methanol-to-olefins (MTO) technology, but hampered by fluctuating methanol prices.

ICIS provides actionable market news in real time including weekly price updates (daily for Asia). We cover pricing trends, market news, and market fundamentals in each region and our editors in China, Singapore, London, and Houston provide a comprehensive view of the global market.

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2024 and beyond: global chemicals outlook

The global landscape for chemicals has changed significantly, with a lower demand growth expected to persist, however within these challenges and changes lies opportunity for those who adapt.

Methanol news

China petrochemical futures track crude gains on upbeat March factory data

SINGAPORE (ICIS)–China’s petrochemical futures markets were tracking gains in crude prices on Monday, with Brent trading at above $87/bbl, on bullish sentiment following a return of the world’s second-biggest economy into manufacturing expansion mode. Official, Caixin March manufacturing PMIs at above 50 China methanol, SM futures prices lead gains External demand picking up for selected goods At the close of morning trade, futures prices of major petrochemicals in Chinese commodity exchanges were up by 0.2% to 1.7%. China petrochemical futures markets Prices as of 03:30 GMT (CNY/tonne) % change vs 29 March Linear low density polyethylene (LLDPE) 8,279 0.60% Polyvinyl chloride (PVC) 5,803 0.20% Ethylene glycol (EG) 4,499 0.50% Polypropylene (PP) 7,542 0.80% Styrene monomer (SM) 9,451 1.40% Paraxylene* 8,534 0.70% Purified terephthalic acid (PTA) * 6,016 1.30% Methanol* 2,518 1.70% Sources: Dalian Commodity Exchange, *Zhengzhou Commodity Exchange At midday, Brent crude was up 30 cents at $87.30/bbl, while US crude gained 31 cents at $83.48/bbl. Crude futures were also supported by expectations of tighter supply amid output cuts by OPEC and its allies, which include Russia. Manufacturing activity in China expanded for the first time in six months, based on official data in March, generating a purchasing managers’ index (PMI) reading of 50.8, as companies accelerated production following the Lunar New Year holiday in the previous month. A separate reading by Chinese media group Caixin was more upbeat, with a higher March PMI reading of 51.1, the highest recorded since February 2023. In Caixin’s data, factory output continued to expand for the fifth straight month. The Caixin PMI surveys small and medium-sized enterprises (SMEs) and export-oriented enterprises located in eastern coastal regions, while the official PMI is tilted toward larger state-owned enterprises. A reading above 50 indicates expansion, while a reading below denotes contraction. “Both supply and demand expanded at a faster pace amid the market upturn. In March, growth in manufacturers’ output and total new orders accelerated, with the former hitting a 10-month high,” Caixin Insight Group senior economist Wang Zhe said. “External demand also picked up pace thanks to the recovery in the global economy, pushing the gauge for new export orders to its highest level since February 2023,” the economist added. “Overall, the manufacturing sector continued to improve in March, with expansion in supply and demand accelerating, and overseas demand picking up,” Wang said. “Manufacturers increased purchases and raw material inventories amid continued improvement in business optimism. However, employment remained in contraction and a depressed price level worsened,” Wang added Besides the seasonal effect, firming overseas demand also helped to push up Chinese factory activities, local brokerage Haitong Securities wrote in a note, citing that furniture, transportation equipment and electronics were enjoying strong demand. China is projected to post around a 5% GDP growth this year, slower than the 5.2% pace recorded in 2023, with a slumping property sector posing a major drag on overall economic prospects. Property and other related sectors account for about a fifth of China’s GDP. While the property slump may persist, other sectors such as electric vehicles, new energy and digital economy are posting healthy growth, said Zhang Junfeng, senior analyst at Shenzhen-based brokerage China Merchant Securities. Focus article by Fanny Zhang ($1 = CNY7.23) Additional reporting by Nurluqman Suratman Thumbnail image: At Lianyungang Port in east China's Jiangsu Province, 26 March 2024. (Shutterstock)

01-Apr-2024

TOPIC PAGE: Sustainability in the fertilizers industry

Updated on 27 March. On this topic page, we gather the latest news, analysis and resources, to help you to keep track of developments in the area of sustainability in the fertilizers industry. LATEST NEWS HEADLINES New urea application rules to be implemented in England from 1 April By Deepika Thapliyal 27-Mar-24 LONDON (ICIS)–In England, famers will only be able to apply solid or liquid urea that is treated with an inhibitor from 1 April, according to new regulations from the Department for Environment, Food & Rural Affairs (Defra) that come into force next month. UPM Biochemicals launches new range of bio-based plant stimulants By Sylvia Traganida 27-Mar-24 LONDON (ICIS)–UPM Biochemicals has launched a new range of bio-based plant stimulants which is an alternative to fossil raw materials-based products, the Finnish paper and renewable chemicals firm said on Tuesday. Mabanaft signs letter of intent for supply of green ammonia from Canada By Sylvia Traganida 19-Mar-24 LONDON (ICIS)–Germany-headquartered energy firm Mabanaft has signed a letter of intent (LOI) with US-based Pattern Energy for the supply of green ammonia to Mabanaft. Yara Growth Ventures invests in electrolysis technology for low-cost renewable hydrogen By Sylvia Traganida 08-Mar-24 LONDON (ICIS)–Norwegian fertilizer major Yara has invested in Danish electrolysis technology company Dynelectro through its corporate venture capital team Yara Growth Ventures. Yara signs agreement with Acme Cleantech subsidiary on green ammonia By Sylvia Traganida 01-Mar-24 LONDON (ICIS)–Norwegian fertilizer major Yara has signed an agreement with GHC SAOC for supply of ammonia with reduced carbon emissions from Acme to Yara on a long-term basis. Idemitsu to join US clean ammonia project By Stefan Baumgarten 27-Feb-24 LONDON (ICIS)–Idemitsu Kosan has agreed to join a 1.2 million tonne/year clean ammonia project that Mitsubishi Corp and Proman plan to develop at Lake Charles, Louisiana, US, it said on Tuesday. Germany’s Heraeus invests in Japanese ammonia tech company By Stefan Baumgarten 22-Feb-24 LONDON (ICIS)–German technology group Heraeus has invested an undisclosed amount in Tsubame BHB, a Japanese company that has developed a precious metal-based technology for decentralized ammonia production. Malaysia’s PCG, Sarawak Petchem agree to study low-carbon ammonia and urea plant By Nurluqman Suratman 21-Feb-24 SINGAPORE (ICIS)–Malaysia’s PETRONAS Chemicals Group (PCG) and methanol producer Sarawak Petchem on Wednesday signed an agreement for a joint feasibility study aimed at establishing a low-carbon ammonia and urea production facility in Bintulu, Sarawak. Egypt’s Helwan signs agreement to produce black urea By Deepika Thapliyal 20-Feb-24 LONDON (ICIS)–In Egypt, Helwan has signed an agreement with SML-INNO UK Ltd to set up the world's first vertical integrated unit to produce black urea, with a capacity of 130,000 tonnes annually, the company said today. EU eases climate proposals after widespread farmer protests By Chris Vlachopoulos 07-Feb-24 LONDON (ICIS)–European Commission President Ursula von der Leyen announced on Tuesday that the EU has agreed to ease key demands in its climate proposal plans, following intense protests from farmers. Tecnimont awarded engineering contract for Portugal green hydrogen, ammonia plant By Graeme Paterson 05-Feb-24 LONDON (ICIS)–Tecnimont has been awarded an engineering contract to develop an integrated green hydrogen and green ammonia plant at Sines, Portugal, its parent company Maire said. EU CARBON BORDER ADJUSTMENT MECHANISM (CBAM) EXPLAINED What is it? The risk of carbon leakage frustrates the EU’s efforts to meet climate objectives. It occurs when companies transfer production to countries that are less strict on emissions, or when EU products are replaced by more carbon-intensive imports. This new mechanism would counteract this risk by putting a carbon price on imports of certain goods from outside of the EU. How will it work? EU importers will buy carbon certificates corresponding to the carbon price that would have been paid, had the goods been produced under the EU's carbon pricing rules. Conversely, once a non-EU producer can show that they have already paid a price for the carbon used in the production of the imported goods, the corresponding cost can be fully deducted for the EU importer. This will help reduce the risk of carbon leakage by encouraging producers in non-EU countries to make their production processes greener. A reporting system will apply from 2023 with the objective of facilitating a smooth roll out and to facilitate dialogue with non-EU countries. Importers will start paying a financial adjustment in 2026. How is the fertilizer industry affected? The fertilizer industry is one of the sectors to fall under the CBAM. The more energy-intensive nitrogen fertilizers will be affected most in the sector by the mechanism. NEW UREA APPLICATION NORMS IN ENGLAND The UK’s Department for Environment, Food & Rural Affairs (DEFRA) has imposed new regulations on urea application in England. Famers will only be able to apply solid or liquid urea that is treated with an inhibitor from 1 April. The move is aimed to reduce ammonia emissions, and would increase costs for farmers by an estimated £40/tonne. The new rules apply to any fertilizer that contains 1% or more of urea nitrogen, with applications of solid urea or liquid (urea ammonium nitrate) fertilizer from 1 April having to include a urease inhibitor Untreated solid urea or liquid UAN fertilizer can be applied between 15 January to 31 March each year. Untreated liquid UAN fertiliser can be applied after 1 April if agronomic justification is provided by a certified fertilizers advisor, mentioning ammonia losses will be at or below the level of when a urease inhibitor is included. Foliar urea applications targeting the crop, using normal spray nozzles do not require a urease inhibitor. The implementation of the Defra regulations was delayed by two years due to higher fertilizer prices and lack of supply following the covid pandemic and the Ukraine war. PREVIOUS  NEWS HEADLINES EU proposes relaxation in policy following farmer protests Biden Administration invests $207m in domestic fertilizer and clean energy endeavours Brazil’s state of Ceara, Bp sign MoU for green hydrogen site  Atome Energy in talks with buyers for green fertilizer from Paraguay unit Sweden's Cinis targets Asia potash market with Itochu partnership Helwan selects Eurotecnica's Euromel G5 technology for new melamine facility in Egypt India’s Adani Group plans $24bn green energy park; RIL to commission giga complex INPEX and LSB pick technology for US ammonia project Bayer partners with energy firms on hydrogen cluster in Germany S Korean group picks KBR tech for Malaysian green ammonia project Abu Qir signs MoU for green ammonia project in Egypt Yara aims to launch first container ship to run off clean ammonia India’s Odisha state approves green hydrogen, ammonia, methanol projects ADM announces launch of regenerative agriculture program in Brazil Fertiglobe completes first renewable ammonia shipment with carbon certification Allied Green Ammonia picks Topsoe’s tech for Australia project Germany’s VNG looks to secure offtake from Norwegian low carbon ammonia plant Gentari enters into agreement with AM Green to invest into a green ammonia delivery platform ITOCHU Corporation, Orascom Construction sign MOU for development of ammonia bunkering in Suez Canal India developing port infrastructure for green hydrogen exports S Korea, Saudi Arabia firms sign 46 pacts, includes blue ammonia project INSIGHT: CBAM reporting begins, fertilizer exporters to EU challenged to account for carbon KBR to supply green ammonia tech to Madoqua Power2X site in Portugal Germany’s SOM to build green hydrogen, ammonia facility in Brazil’s Piaui state US ADM and Syngenta sign MoU to collaborate on low carbon oilseeds to meet biofuel demand Tecnicas Reunidas, Allied Green Ammonia to build green hydrogen and green ammonia plant in Australia Australian fertilizer producer Orica accelerates climate change targets Nestle, Cargill and CCm Technologies launch joint UK trial on sustainable fertilizer EnBW acquires stake in planned Norwegian ammonia plant  Yara Germany signs agreement for decarbonisation of cereal cultivation using green fertilizers Hyphen, ITOCHU ink MoU to explore potential Namibia hydrogen collaboration  INSIGHT: BASF grapples with demand trough, slow road back SABIC AN ships low-carbon urea to New Zealand US Cargill and John Deere collaborate to enable revenue for farmers adopting sustainability Canada’s Lucent Bio announces approval of biodegradable nutrient delivery patent Aker, Statkraft’s 10-year PPA to spur European renewable ammonia push further BASF, Yara Clean Ammonia to evaluate low-carbon blue ammonia production facility in US Gulf Coast Yara Clean Ammonia, Cepsa to launch clean hydrogen maritime corridor EU details CBAM reporting obligations Saudi Arabia’s Ma’aden exports its first low-carbon blue ammonia shipments to China US Bunge and Nutrien Ag announce alliance to support sustainable farming practices Maire subsidiary Stamicarbon wins US green ammonia engineering contract India’s IFFCO launches liquid nano-DAP fertilizer EU Parliament backs CBAM, emissions trading measures OCP granted €100m green loan to build solar plants at Morocco facilities EU unveils plans to tackle greenwashing India’s IFFCO and CIL to manufacture nano DAP for three years USDA awards Ostara funds to boost sustainable phosphate fertilizer output Canadian prime minister confirms fertilizer emission goal is voluntary US fertilizers industry increases carbon capture in 2021 – TFI Indian president calls for reduction in chemical fertilizer use IFFCO plans to export nano urea to 25 countries Amman selects Elessent Clean Technologies for Indonesia sulphuric acid plant Lotte Chemical forms clean ammonia consultative body with RWE and Mitsubishi Corporation Global 2020-2021 specialty fertilizer demand growth led by north America, Asia BASF and Cargill extend enzymes business and distribution to US Saudi Aramco awards sulphur facilities overhaul contract to Technip India sets green hydrogen targets for shipping, oil & gas, fertilizer sectors Germany misses climate target despite lower energy consumption TFI reacts to US Congress passing the Water Resources Development ActHelm becomes a shareholder in UK bio-fertilizer company Unium Bioscience Yara inks deal to deliver fossil-free green fertilizers to Argentina Canadian firms plan fuel cell generator pilot using green ammonia Deepak Fertilizers awards contract to reduce emissions, increase productivity Saudi Aramco launches $1.5bn sustainability fund to support net zero ambition CF Industries and ExxonMobil plan CCS project in Louisiana Canada’s plan to cut fertilizer emissions is voluntary – minister Canada’s fertilizer emission goal raises food production concerns Uniper, Vesta to cooperate on renewable ammonia site in the Netherlands German Uniper to work with Japan’s JERA on US clean ammonia projects ADNOC ships first cargo of low-carbon ammonia to Germany US Mosaic and BioConsortia expand collaboration to microbial biostimulant IMO deems Mediterranean Sea area for sulphur oxides emissions control Canada's Soilgenic launches new enhanced efficiency fertilizers technology for retail Austria's Borealis aims to produce 1.8m tonnes/year of circular products by 2030 European Parliament rejects proposed carbon market reform IFA ’22: southern Africa looks to bio-fertilizer as cheaper, sustainable option IFA '22: Indian farmers will struggle to embrace specialty fertilizers – producer Canadian Nutrien plans to build world’s largest clean ammonia facility in Louisiana Japan's JGC Holdings awards green ammonia plant contract to KBR Bayer to partner with Ginkgo to produce sustainable fertilizers Australia Orica and H2U Group partner on Gladstone green ammonia project Canada sets tax credit of up to 60% for carbon capture projects UK delays urea restrictions to support farmers as fertilizer costs at record high EU states agree to back carbon border tax Yara to develop novel green fertilizer from recycled nutrients USDA announces plans for $250m grant programme to support American-made fertilizer Canada seeks guidance to achieve fertilizer emissions target Fertilizer titan Pupuk Indonesia develops hydrogen/blue ammonia business India launches green hydrogen/ammonia policy, targets exports Canada AmmPower to develop green hydrogen and ammonia facility in Louisiana US DOE awards grant to project to recover rare earth elements from phosphate production Fertiglobe, Masdar, Engie to develop green hydrogen for ammonia production Czech Republic’s Spolana enhances granular AS production India’s Reliance to invest $80bn in green energy projects Yara, Sweden’s Lantmannen aim to commercialise green ammonia by 2023 Novatek and Uniper target Russia to Germany blue-ammonia supply chain Fertz giant Yara goes green with electrification of Norwegian factoryCanada Arianne Phosphate exploring use of phosphate for hydrogen technology FAO and IFA renew MoU to promote sustainable fertilizer use Sumitomo Chemical, Yara to explore clean ammonia collaboration Sri Lanka revokes ban on imports Tokyo scientists convert bioplastic into nitrogen fertilizer Aramco plans Saudi green hydrogen, ammonia project China announces action plan for carbon peaking & neutrality Saudi Aramco targets net zero emissions from operations by 2050 Fertiglobe goes green with Red Sea zero-carbon ammonia pro Australian fertilizer major Incitec Pivot teams up for green ammonia study INTERVIEW: BASF to scale up new decarbonisation tech in second half of decade – CEO India asks fertilizer companies to speed up production of nano DAP Japan's Itochu set to receive first cargo of blue ammonia for fertilizer use Norway's Yara acquires recycled fertilizers maker Ecolan Bayer Funds US start-up aims to cut nitrogen fertilizer use by 30% BP: Green ammonia production in Australia feasible, but needs huge investment Origin and MOL explore shipping green ammonia from Australia India’s IFFCO seeks to export nano urea fertilizer Sri Lanka reinstates ban on import of chemical fertilizers Nutrien to cut greenhouse gas emissions 30% by 2030 RESOURCES IFA – Fertilizers and climate change  TFI – Sustainability report 

27-Mar-2024

Dow, ExxonMobil among chems picked in US $6 billion CO2 cutting program

HOUSTON (ICIS)–A $6 billion industrial decarbonization program by the US will fund many chemical projects being developed by Dow, ExxonMobil and other companies, featuring projects as diverse as using carbon dioxide (CO2) as a feedstock, recycling plastic and burning hydrogen as a fuel, the Department of Energy (DOE) said on Monday. The following describes the seven chemical projects chosen by the US. ExxonMobil is developing the Baytown Olefins Plant Carbon Reduction Project in Texas. The project will use new burner technologies to combust hydrogen instead of natural gas for ethylene production. The project should cut more 2.5 million tonnes/year of carbon emissions, or more than 50% of the cracker's total emissions. The project will receive up to $331.9 million from the government. A subsidiary of Orsted plans to build a 300,000 tonne/year e-methanol plant on the Gulf Coast in Texas. The subsidiary, Orsted P2X US Holding, expects the e-methanol will be used as fuel for marine shipping and transportation. E-methanol is made with CO2 with green hydrogen. Orsted is already developing such a project in Sweden. The Texas project will receive up to $100 million from the government. BASF plans to develop a project in Freeport, Texas, that will convert liquid byproducts into synthesis gas (syngas) using plasma gasification and renewable power. Syngas is a mixture of hydrogen and carbon monoxide (CO). BASF will use the syngas as feedstock for its operations in Freeport. The project will receive up to $75 million from the government. LanzaTech and T.EN Stone & Webster Process Technology plan to develop a project on the US Gulf Coast that will capture CO2 emissions from crackers. It will then use green hydrogen and a biotech-based process to convert the captured CO2 into ethanol and ethylene. LanzaTech has developed strains of bacteria that ferment CO2 using hydrogen as an energy source. The name of the project is Sustainable Ethylene from CO2 Utilization with Renewable Energy (SECURE), and it will receive up to $200 million from the government. Ashland's subsidiary, ISP Chemicals, plans to replace natural gas boilers with electric heat delivered by a thermal battery at its plant in Calvert City, Kentucky. Other partners in the project include the Tennessee Valley Authority (TVA) and Electrified Thermal Solutions (ETS), which is supplying its Joule Hive system. The project will receive up to $35.2 million from the government. Dow's project will be developed on the US Gulf Coast and it will capture up to 100,000 tonnes/year of CO2 from ethylene oxide (EO) production. The project will then use the CO2 to produce chemicals used in electrolyte solutions to make domestic lithium-ion batteries. The project will receive up to $95 million from the government. Eastman is building a chemical recycling plant in Longview, Texas, that will use its methanolysis technology to break down waste polyethylene terephthalate (PET) into dimethyl terephthalate (DMT) and monoethylene glycol (MEG). The plant plans to use thermal energy storage combined with on-site solar power to reduce the carbon intensity of its process heating operations. It will receive up to $375 million from the government. DETAILS ABOUT THE US PROGRAMThe US expects the program will cut more than 14 million tonnes/year of emissions of CO2 from 33 projects. On average, each of the projects will cut carbon emissions by 77%. Out of the $6 billion, $489 million will come from the Bipartisan Infrastructure Law, and $5.47 billion will come from the Inflation Reduction Act (IRA). The fund will target the following: Seven chemical and refining projects. Six cement and concrete projects. Six iron and steel projects. Five aluminium and metals projects. Three food and beverage projects. Three glass projects. Two process heat-focused projects. One pulp and paper project.

25-Mar-2024

INSIGHT: Indorama flags peak oil demand in possible plant closures

HOUSTON (ICIS)–While Indorama Ventures reviews six sites for possible closure, it will consider signs that oil demand will continue growing in emerging Asia while peaking in Europe and North America – a trend that would alter the regional costs of a principal polyester feedstock, making it more attractive to import it from Asia than make it in the West. Benzene, toluene and mixed xylenes (MX) are produced in refineries, and they are among the fundamental building blocks for the chemical industry. If oil demand peaks in the West, that would discourage refiners from expanding capacity or making the expensive investments needed to maintain existing production levels. That would tighten supplies for these building blocks, affecting costs for chemicals as varies as phenol, styrene and paraxylene (PX). By contrast, oil demand has yet to peak among emerging economies in Asia. There, refiners will continue to increase capacity to meet growing demand for diesel and gasoline. Supplies of aromatics should continue growing in those regions. Indorama is taking the prospect of peak oil seriously because a key polyester feedstock, purified terephthalic acid (PTA), is made from PX, and PX is extracted from MX. If Western PTA prices become too expensive, then it would make more sense for Indorama to shut down its high-cost plants in the West and purchase the feedstock from producers in Asia that can sell material at a lower price. Indorama did not specify which plants it could close. PEAK OIL IN WEST SPELLS END OF NEW REFINERIESIndorama expects oil demand in the West will soon peak, perhaps in 2025 or 2026, said Aloke Lohia, Group CEO of Indorama. He made his comments in an interview with ICIS. His comments are backed by statistics from the Energy Information (EIA). Outside of the post-COVID rebound in 2021, gasoline demand in the US has been running below pre-pandemic levels. In 2023, it reached a summertime peak of nearly 9.60 million bbl/day. That is more in line with summer levels in 2015. Given the outlook for oil demand in the West, Indorama is betting that refiners will unlikely make the pricey investments necessary to increase capacity. "No one is looking to build a new refinery," Lohia said. Refiners could even shirk from making the investments needed to maintain existing capacity. "We believe there will be de-growth in refineries in the West and hence high cost for crude oil derivatives that has hurt our competitiveness, especially in Europe," Lohia said in prepared remarks. Actions by refiners are bearing this out. LyondellBasell plans to shut down its Houston refinery because it cannot justify the capital expenditures needed to keep the 100+ year old complex running. Although ExxonMobil recently expanded its refinery in Beaumont, Texas, the last time a refiner made a comparable investment was in 2012, when Motiva expanded its refinery in Port Arthur, Texas. Several refiners have converted existing units to process vegetable oils and similar feedstock to produce renewable diesel and sustainable aviation fuel (SAF). LyondellBasell could convert its Houston refinery into a sustainability hub. OIL DEMAND TO CONTINUE GROWING IN EMERGING ASIAUnlike the West, Indorama expects oil demand to continue growing in emerging Asia. Governments in this part of the world have less aggressive schedules for reducing carbon emissions, with net-zero goals further out in the future, Lohia said. Reducing carbon emissions boils down to renewable electricity. Instead of producing power by burning coal and natural gas, countries would do so with renewable sources such as solar panels, wind turbines and hydropower. Renewable electricity could also be used to generate heat. Emerging economies have limited power production, and they want to use that electricity to rapidly industrialize, according to Indorama. De-carbonization and industrialization will compete for limited power generation. That will place a limit on the expansion of charging stations needed for electric vehicles (EVs). Until emerging markets build out electrical infrastructure, they will still need petroleum-based fuels. Consequently, emerging markets are giving themselves more time to reduce carbon emissions. In China in particular, some companies could rush to complete new expansion projects before decarbonization deadlines take effect, Lohia said. China already has too much capacity, so this building spree will worsen the supply glut. As it stands, crude oil processing in China reached 14.8 million bbl/day in 2023, an all-time high, according to the EIA. Growing refining capacity should increase supplies of aromatics such as PX, the feedstock used to make purified terephthalic acid (PTA). That should depress PTA production costs. INDORAMA'S PLANGiven the global outlook for chemical feedstock produced at refineries, Indorama is considering a plan that would reduce consumption of these feedstocks at its Western operations. Instead of producing feedstock at high-cost plants, Indorama would import the material from Asia. Production lost from any closures would be offset by increasing utilization rates at Indorama's low-cost plants. The move would significantly increase Indorama's overall operating rates and lead to double-digit returns on capital employed (ROCE) for the two businesses most exposed to MX, Combined PET (CPET) and Fibers. US SHALE MAY SPARE DOMESTIC PLANTSThe calculus is less straightforward for Indorama's US operations. Critically, these operations include methyl tertiary butyl ether (MTBE), an octane-boosting gasoline blendstock that is made with methanol and isobutylene. In the US, both of these chemicals are made from shale-based feedstock, giving Indorama a substantial cost advantage. When gasoline prices rise, Indorama's MTBE operations can earn the company very attractive margins. Those fat MTBE margins would offset the higher costs involved with producing PTA from PX extracted from MX. MX is another octane-boosting blendstock, so its price tends to rise and fall with that for gasoline. In effect, MTBE provides Indorama with a hedge against higher MX costs for its US PET operations. MX is not the only feedstock used to make PET. The other is monoethylene glycol (MEG), a chemical made from ethylene. US ethylene producers predominantly on ethane as a feedstock, giving them a cost advantage. For Indorama's PET operations in the US, shale gas gives the company a cost advantage on the MEG side and a hedge on the PTA side. Thumbnail shows bottle made of PET. Image by monticello/imageBROKER/Shutterstock Insight article by Al Greenwood

05-Mar-2024

Commercial production at Methanex's Geismar 3 in Louisiana delayed until late Q3

LONDON (ICIS)–Commercial production at Methanex's newly constructed 1.8 million tonne/year methanol plant, Geismar 3, has been delayed, potentially until the end of Q3, the Canadian producer announced. During the plant's initial start-up, there were complications with the unit's autothermal reformer (ATR). In a press release, Methanex said that following inspections, there was significant damage to a large number of supporting refractory bricks in the ATR which needed replacing. It is estimated that the total capital cost will not significantly exceed the upper end of the capital cost guidance of $1.30bn. Gesimar 3 is located in Louisiana and was originally scheduled to start up in Q4 2023. In Methanex's Q4 earnings report last month, it said the plant was in the process of starting up and was expected to reach full rates in February. The producer said, "Based on the preliminary findings of its root cause analysis, management believes that this issue relates to complications in the initial start-up process and is not a plant design or construction issue." Methanol is primarily used to produce formaldehyde, methyl tertiary butyl ether (MTBE) and acetic acid. Smaller amounts go into production of dimethyl terephthalate (DMT), methyl methacrylate (MMA), chloromethanes, methylamines, glycol methyl ethers, and fuels applications such dimethyl ether (DME), biodiesel and the direct blending into gasoline.

20-Feb-2024

New US methanol plant planned for US Louisiana

HOUSTON (ICIS)–Lake Charles Methanol II announced plans to build a 3.6m tons/year methanol plant in southwest Louisiana, with the final investment decision (FID) expected in mid-2024. The proposed facility will reform natural gas and renewable feedstock into hydrogen, which will be converted to methanol, and capture the carbon dioxide from the process at the port of Lake Charles. The project is currently undergoing a front-end engineering design (FEED) study and regulatory permitting. Following the FID, construction would start in mid-2024, with operations to begin in late 2027.

14-Feb-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 9 February 2024. India methanol gains on lower Iran volumes amid plant outagesBy Keven Zhang 09-Feb-24 14:38 SINGAPORE (ICIS)–Indian methanol spot market continued to be driven by supply outages in Iran, with a trade concluded higher than the previous week. INSIGHT: Asia benzene remains profitable supported by demand in 2024 By Jenny Yi 08-Feb-24 22:27 SINGAPORE (ICIS)–Asia benzene supply growth will moderate in 2024 compared with last year, which saw the the peak of the latest capacity expansion cycle. The downstream market still maintains rapid capacity growth, however, which exceeds the supply growth rate of benzene. Asia adipic acid struggles to keep up with cost pressure ahead of holidays By Josh Quah 08-Feb-24 13:44 SINGAPORE (ICIS)–Adipic acid (ADA) prices in Asia have been on a general upward trend since around mid-December 2023 for China-origin cargoes. INSIGHT: Asia ABS supply length will intensify amid China expansions By May Hu 08-Feb-24 10:00 SINGAPORE (ICIS)–ABS (acrylonitrile butadiene styrene) capacity growth in Asia peaked in 2023 and will be sustained in 2024 on massive new capacities coming on stream in China. China petrochemical demand may stay muted post-holiday By Yvonne Shi 07-Feb-24 15:09 SINGAPORE (ICIS)–Low market confidence has kept petrochemical restocking in China tepid before the Lunar New Year holiday, with players refraining from building up inventory given uncertain demand recovery in March. China Jan petrochemical markets gain on restocking; Feb holidays to hit demand By Yvonne Shi 06-Feb-24 14:58 SINGAPORE(ICIS)–China’s domestic petrochemical markets gained in end-January on the back firm crude prices and some restocking ahead of the Lunar New Year holiday, with demand in February likely to weaken. Asia titanium dioxide spot market may be fuelled by bullish sentiment By Joson Ng 05-Feb-24 16:56 SINGAPORE (ICIS)–The titanium dioxide (TiO2) spot market in Asia is likely to see supply factors driving the market in February. India hikes infrastructure capex for fourth year; Rs11.1tr set for 2024-25 By Priya Jestin 05-Feb-24 14:49 MUMBAI (ICIS)–India’s government has announced plans to increase its capital expenditure on infrastructure projects to rupees (Rs) 11.1trn ($134bn) in its interim budget for 2024-2025, up 11% from the previous fiscal year, boosting the funds available for the sector for the fourth consecutive year.

13-Feb-2024

Mitsubishi may make FID on new US MMA plant in Q2

HOUSTON (ICIS)–Mitsubishi Chemical America could make a final investment decision (FID) on a new methyl methacrylate (MMA) plant in the US in the second quarter, with start-up possible in 2028, the company said on Thursday. The plant, called the MCA Geismar Site, is proposed to be built in Ascension Parish in Louisiana state, and it will produce 350,000 tonnes/year using the company’s Alpha process technology. The site will also include a carbon monoxide (CO) plant, a methanol plant and a formalin plant. This will be the third plant that features the Alpha process, which uses ethylene, methanol and CO to make MMA. If Mitsubishi Chemical decides to move forward on the project, then construction could start in the second half of 2024, the company said in a statement. It should end in 2028, with operations starting later that year. The project already has achieved some regulatory milestones. The Louisiana Department of Environmental Quality (LDEQ) had scheduled a public hearing for the project for 1 February. In 2023, the regulator made a preliminary determination to approve construction of the project. Mitsubishi Chemical expects the department to approve its air permit application in March or April 2024, it said in a statement. ETHYLENE-BASED MMA MAY UPEND MARKETMMA is typically made from acetone, which is a co-product of phenol production. Mitsubishi as well as Roehm are building MMA plants that use ethylene and methanol instead of acetone as a feedstock. Roehm calls its process technology LiMA, and it will be used in a 250,000 tonne/year plant it is building on the Gulf Coast. If these new technologies proliferate, then they would create a new end-use for ethylene, and they could slow down the growth for a traditional outlet for acetone. Not only could that have ramifications for acetone, but the new MMA technologies could affect phenol markets. Phenol and acetone are co-products and are ultimately derived from benzene and propylene via cumene. Thumbnail shows an item made of polymethyl methacrylate (PMMA), which is made from MMA. Image by Shutterstock.

08-Feb-2024

Mitsubishi's proposed US MMA plant reaches regulatory milestones

HOUSTON (ICIS)–A proposed methyl methacrylate (MMA) plant that Mitsubishi Chemical America plans to build in Louisiana has reached a couple of regulatory milestones, although the company has yet to announce a final investment decision (FID). The Louisiana Department of Environmental Quality (LDEQ) scheduled a public hearing for the project for 1 February. Earlier in 2023, the regulator made a preliminary determination to approve construction of the project. The plant, called the MCA Geismar Site, is proposed to be built in Ascension parish, and it will produce 350,000 tonnes/year using the company's Alpha process technology. The site will also include a carbon monoxide (CO) plant, a methanol plant and a formalin plant. This will be the third plant that features the Alpha process, which uses ethylene, methanol and CO to make MMA. ETHYLENE BASED MMA MAY UPEND MARKETMMA is typically made from acetone, which was a co-product of phenol production. Mitsubishi as well as Roehm are building MMA plants that use ethylene and methanol instead of acetone as a feedstock. Roehm calls its process technology LiMA, and it will be used in a 250,000 tonne/year plant it is building on the Gulf Coast. If these new technologies proliferate, then they would create a new end-use for ethylene, and they could slow down the growth for a traditional outlet for acetone. Not only could that have ramifications for acetone, but the new MMA technologies could also affect phenol markets. Phenol and acetone are both coproducts and are ultimately derived from benzene and propylene via cumene. Thumbnail shows polymethyl methacrylate (PMMA), which is made with MMA. Image by Shutterstock. 

06-Feb-2024

INSIGHT: Pre-holiday Asia petrochemicals mixed on cost pressures, bleak demand outlook

SINGAPORE (ICIS)–Petrochemical markets in Asia are showing a mixed trend ahead of the Lunar New Year holiday, with some product prices rising on a combination of pre-holiday restocking and supply constraints despite general weakness in underlying demand. Red Sea crisis weighs on business decisions amid rising freight costs Pre-holiday restocking muted in most markets Demand recovery post holiday uncertain Prevailing concerns about the global economic outlook, compounded by rising freight costs and supply chain issues continue to weigh on sentiment. In China’s domestic market, pre-holiday restocking has been muted overall as downstream buyers fret over high prices of some products. The Lunar New Year, which falls on 10 February, is celebrated in most parts of northeast and southeast Asia. China will be on holiday for a full week on 10-17 February. COST PRESSURES DRIVE GAINS Some markets in Asia are experiencing an uptick in activity ahead of the holiday amid tight supply conditions. For ethyl acetate (etac), spot negotiations have surged along with market activity as end-users stock up on feedstock. The demand spike, particularly in northeast and southeast Asia, was triggered by concerns over limited vessel space and higher freight costs which were causing delays in cargo deliveries. “The tightness of vessel [availability] becomes a common problem for liquid chemicals at the moment,” said a regional-based market source. In the benzene market, buyers have been restocking throughout January, with a notable increase in demand compared with the previous year, ICIS analyst Jenny Yi said. Supply in Asia is expected to be stable amid limited planned turnarounds in the region in the first quarter, Yi said. In addition, the arbitrage window between Asia and the US has opened given reduced production in North America caused by prevailing frigid temperatures, she added. In the isocyanates market, demand is strong in India as downstream polyurethane (PU) producers are restocking for methylene diphenyl diisocyanate (MDI) and toluene diisocyanate (TDI to gear up for peak production season in the first few months of the new year. Import prices are bolstered by tight northeast Asian supply, with major Chinese producers offline for turnarounds. However, post-Lunar New Year demand remains uncertain, particularly in China and southeast Asia, as downstream PU sector recovery is sluggish. For polyols, import prices in southeast Asia and India are rising, tracking upstream propylene oxide (PO) gains. India’s domestic and import prices for polyols are rising on a combination of strong demand and high freight costs. Southeast Asia's market, on the other hand, is quieter but prices were being supported by higher feedstock cost. Adjusting polyols prices to match upstream costs is challenging due to weak downstream demand. In the fatty alcohols market, Chinese buyers have secured their needs until March, leaving Indian buyers more active in the market. “We sell two or three months forward on a CIF [cost, insurance & freight] basis … and the sudden increase in ocean freight will definitely affect our margins,” an oleochemicals trader said. HIGH PRICES DAMPEN DEMAND; SUPPLY TIGHT FOR SOME MARKETS Post-Lunar New Year recovery in demand is uncertain, with little optimism for significant improvement. For methanol, domestic activity in China was tepid with downstream factories likely to shut weeks ahead of the holiday, while those seeking cargoes face higher prices given low availability of supply in the market. The country’s methanol imports in January plunged month on month with plants in the Middle East running at reduced rates during the month. In the plasticizers market, spot import prices in Asia were dragged down by upstream losses and weak buying momentum. Based on ICIS’ Plasticizers forecast, prices are expected to fall in February as the market activity slows down during the Lunar New Year holiday. For 2-ethylhexanol (2-EH), import prices in east Asia were stable amid limited discussions due to a lack of available spot material. Downstream diisononyl phthalate (DINP) spot market is having some support from limited supply of feedstock isononyl alcohol (INA). INA cargo movement from Europe to Asia is being affected by ongoing logistics issues in the Red Sea. WEAK DOWNSTREAM MARKETS TO PERSIST For monoethylene glycol (MEG), slowing textile demand ahead of the Lunar New Year could halt the market uptrend. “Limited restocking activities are seen as buyers and end-users prefer not building high stocks amid concerns on the demand recovery after the holiday. As you know, the global economic outlook seems not rosy,” a regional trader said. In the recycled polyethylene terephthalate (R-PET) and recycled polyethylene (R-PE) markets, demand for pellets has been tepid as downstream plants still working through backlogs from last year's purchases. The recycled polymers market has generally struggled throughout 2023, with trade impacted by poor economics. In the PE market, initial spot February import offers in southeast Asia were firmer this week as Middle East suppliers flagged reduced spot allocation and low stocks. Middle East offers to Vietnam – which will celebrate the Lunar New Year from 8-14 February – spiked due to reduced availability of spot export cargoes. The Red Sea crisis has also likely affected some shipments from Saudi Arabia, but this could not be confirmed with the producers. Supporting PE demand is downstream application in packaging, which accounts for 60% of total consumption of the material. “The outlook for packaging is expected to be positive given the anticipation of holiday demand. However, downstream demand destruction in the industry is forecast at 15-20% lower year to date,” ICIS analyst Jincy Varghese said. For acrylonitrile butadiene rubber (NBR), China’s import prices have softened this week, as more local end-users retreated to wind down and prepare for the holidays. “The pre-holiday restocking exercise ended just barely weeks after it started,” a regional NBR maker said, adding that “it was so lame, compared to the previous years”. Insight article by Nurluqman Suratman With contributions from Melanie Wee, Julia Tan, Izham Ahmad, Helen Yan, Judith Wang, Shannen Ng, Keven Zhang, Arianne Perez and Ai Teng Lim Thumbnail image: China's 2024 Year of the Dragon celebrations preparations in Beijing – 25 Jan 2024  (WU HAO/EPA-EFE/Shutterstock)

26-Jan-2024

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